The intrinsic value of business is Ruane Cunniff (Trades, Portfolio)’s focus when making investment decisions, and its success is clear. Its Sequoia Fund outperformed the S&P 500 from the time the Fund began in 1970 until September 2007, and its record in recent years hasn’t been bad, either. Last year, the Fund returned 7.55%, but that is a drop in the bucket compared to its returns in 2013 (34.58%).
Ruane Cunniff (Trades, Portfolio)’s most significant second-quarter transaction was its 8,498,547-share reduction of its stake in TJX Companies Inc. (TJX, Financial), a Framingham, Mass.-based apparel and home goods retailer, for an average price of $66.55 per share. The sale had a -2.82% impact on Ruane Cunniff (Trades, Portfolio)’s portfolio.
TJX Companies has a market cap of $47.85 billion and an enterprise value of $47.23 billion. It has a P/E of 21.6, a Price/Book of 11.2 and a Price/Sales of 1.7. With 17,882,436 shares of TJX still in Ruane Cunniff (Trades, Portfolio)’s portfolio, the firm remains TJX’s largest shareholder among the gurus; PRIMECAP Management (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jim Simons (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Chris Davis (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Scott Black (Trades, Portfolio) and John Keeley (Trades, Portfolio) have shares of TJX Companies in their portfolios.
TJX is the third-most valuable stake in Ruane Cunniff (Trades, Portfolio)’s portfolio.
Ruane Cunniff (Trades, Portfolio) reduced its stake in McGraw Hill Financial Inc. (MHFI, Financial), a New York City-based financial information and analytics company. Ruane Cunniff (Trades, Portfolio) sold 500,000 shares of McGraw Hill Financial – more than 99% of its stake – for an average price of $104.49 per share. The transaction had a -0.25% impact on Ruane Cunniff (Trades, Portfolio)’s portfolio.
McGraw Hill Financial has a market cap of $25.9 billion and an enterprise value of $25.72 billion. It has a Price/Book of 34.0 and a Price/Sales of 5.0. Steve Mandel (Trades, Portfolio), Jim Simons (Trades, Portfolio), Chris Davis (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Dodge & Cox, Jeremy Grantham (Trades, Portfolio), First Eagle Investment (Trades, Portfolio), John Burbank (Trades, Portfolio), Murray Stahl (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) have shares of McGraw Hill Financial in their portfolios.
Ruane Cunniff (Trades, Portfolio) also sold part of its stakes in 48 other companies, including Valeant Pharmaceuticals International Inc. (VRX, Financial), Perrigo Co. (PRGO, Financial), Primerica Inc. (PRI, Financial) and Berkshire Hathaway Inc. (BRK.A, Financial).
Ruane Cunniff (Trades, Portfolio) added to 20 existing stakes, the most notable being the firm’s purchase of 73,066 shares of IDEXX Laboratories Inc. (IDXX, Financial), a Westbrook, Maine-based healthcare and diagnostic substances company, for an average price of $69.35 per share. The purchase had a 1.22% impact on Ruane Cunniff (Trades, Portfolio)’s portfolio.
IDEXX Laboratories has a market cap of $7.08 billion and an enterprise value of $7.83 billion. It has a P/E of 41.1, a Price/Book of 854.9 and a Price/Sales of 4.9. Ruane Cunniff (Trades, Portfolio) is IDEXX’s leading shareholder among the gurus; Ron Baron (Trades, Portfolio), Chuck Royce (Trades, Portfolio), Chris Davis (Trades, Portfolio), Meridian Funds (Trades, Portfolio), RS Investment Management (Trades, Portfolio), Jim Simons (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), George Soros (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Ray Dalio (Trades, Portfolio) and Bill Frels (Trades, Portfolio) also have shares of IDEXX Laboratories in their portfolios.
Ruane Cunniff (Trades, Portfolio) also added 946,056 shares to its stake in Monsanto Co. (MON, Financial), a Creve Coeur, Mo.-based agrochemical and agricultural biotechnology corporation, for an average price of $115.96 per share. The acquisition had a 0.48% impact on Ruane Cunniff (Trades, Portfolio)’s portfolio.
Monsanto has a market cap of $42.52 billion and an enterprise value of $50.31 billion. It has a P/E of 16.5, a Price/Book of 5.1 and a Price/Sales of 2.9. Frank Sands (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Larry Robbins (Trades, Portfolio), Manning & Napier Advisors, Inc., Bill Nygren (Trades, Portfolio), Alan Fournier (Trades, Portfolio), Vanguard Health Care Fund (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), George Soros (Trades, Portfolio), Jim Simons (Trades, Portfolio), Wallace Weitz (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Ron Baron (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Kahn Brothers (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Ken Fisher (Trades, Portfolio) have shares of Monsanto in their portfolios.
California’s Environmental Protection office issued a notice of intent on Sept. 15 to label a major ingredient in Monsanto’s “Roundup” herbicide – glyphosate – as a known carcinogen. Consequently, Monsanto will have to add a “clear and reasonable” warning that the ingredient is hazardous to humans.
The World Health Organization concluded in March that glyphosate was “probably” carcinogenic.
The other 18 stakes to which Ruane Cunniff (Trades, Portfolio) added in the second quarter included the firm’s stakes in Berkshire Hathaway Inc. (BRK.B, Financial), Tiffany & Co. (TIF, Financial) and Johnson & Johnson (JNJ, Financial).
Ruane Cunniff (Trades, Portfolio) also bought and sold modest stakes in the second quarter. It sold nine small stakes – Salix Pharmaceuticals Ltd. (SLXP), General Mills Inc. (GIS), Duke Energy Corporation (DUK), TRW Automotive Holdings Corp. (TRW), BlackRock Inc. (BLK), Devon Energy Corp. (DVN), Intel Corp. (INTC), SEI Investments Company (SEIC) and Itau Unibanco Holding SA (ITUB) – and it bought three small ones – Senvest Capital Inc. (SVTCF), Yelp Inc. (YELP) and AT&T Inc. (T).
To view the portfolios of more gurus, visit the List of Gurus page. Not a premium member of GuruFocus? Try it free for 7 days.
