David Rolfe (Trades, Portfolio) has been managing Wedgewood Partners' portfolio for 18 years. The following were his most heavily weighted trades during the fourth quarter.
Rolfe nearly closed his stake in Coach Inc. (COH), cutting it by 98.90% with an impact of -4.38% on the portfolio.
The company is a New York design house of modern luxury accessories and lifestyle collections. Its product offerings, manufactured by third-party suppliers, include women's and men's bags, women's and men's small leather goods, business cases, footwear, wearables including outerwear, watches, weekend and travel accessories, scarves, sunwear, fragrance, jewelry, travel bags and other lifestyle products. During the second quarter, net sales Increased 7% over prior year in constant currency and grew 4% on a reported basis. Operating margin was 22.4% and gross margin was 67.4%.
GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with strong returns of ROE of 14.55% and ROA of 8.34% that are over performing 73% of the companies in the Global Luxury Goods industry. Financial strength has a rating of 5 out of 10, with a cash-to-debt of 1.51 that is above the industry median of 0.92.
The largest shareholder among the gurus is Dodge & Cox with 6.26% of outstanding shares, followed by Steven Cohen (Trades, Portfolio) with 1.47%, John Rogers (Trades, Portfolio) with 0.47%, Jeremy Grantham (Trades, Portfolio) with 0.15%, Meridian Funds (Trades, Portfolio) with 0.13% and Ken Heebner (Trades, Portfolio) with 0.1%.
Rolfe almost closed his stake in National Oilwell Varco Inc. (NOV) with a decrease of 99.02%, and the deal had an impact of -3.84% on the portfolio.
The company is a provider in the design, manufacture and sale of equipment and components used in oil and gas drilling, completion and production operations, and the provision of oilfield services to the upstream oil and gas industry. Fourth quarter revenues had a decrease of 18% from the third quarter of 2015 and a decrease of 52% from the fourth quarter of 2014. EBITDA was down 40% sequentially and 75% from the prior year.
GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with negative returns of ROE of -4.13% and ROA of -2.50% that are under performing 54% of the companies in the industry. Financial strength has a rating of 4 out of 10, with a cash-to-debt of 0.53 that is above the industry median of 0.44.
Dodge & Cox is the largest shareholder of the company among the gurus with 5.66% of outstanding shares, followed by First Eagle Investment (Trades, Portfolio) with 5.53%, Mason Hawkins (Trades, Portfolio) with 2.88%, Bill Nygren (Trades, Portfolio) with 0.95%, Sarah Ketterer (Trades, Portfolio) with 0.5% and John Rogers (Trades, Portfolio) with 0.45%.
Rolfe raised his stake in Perrigo Co. PLCÂ (PRGO) by 159.08% with an impact of 3.22% on the portfolio.
The company develops, manufactures and distributes over-the-counter and generic prescription pharmaceuticals, nutritional products and active pharmaceutical ingredients.
GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with negative returns of ROE of -0.40% and ROA of -0.23% that are under performing 70% of the companies in the industry. Financial strength has a rating of 4 out of 10, with a cash-to-debt of 0.07 that is far below the industry median of 3.46.
Other notable shareholders among the gurus are John Paulson (Trades, Portfolio) with 1.86% of outstanding shares, followed by Ruane Cunniff (Trades, Portfolio) with 1.01%, Eric Mindich (Trades, Portfolio) with 0.59%, Meridian Funds (Trades, Portfolio) with 0.34%, Ron Baron (Trades, Portfolio) with 0.18% and Ken Fisher (Trades, Portfolio) with 0.15%.
Rolfe reduced his stake in Cummins Inc. (CMI) by 98.96% and the deal had an impact of -2.59% on the portfolio.
The company designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products, including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems and electric power generation systems. During the fourth quarter, revenues decreased 6% from the same quarter in 2014, with the impact of currency, primarily a stronger U.S. dollar, negatively impacting sales by 4%.
GuruFocus gives the stock a profitability and growth rating of 7 out of 10 with strong returns of ROE of 18.19% and ROA of 8.93% that are over performing 86% of the companies in the Global Diversified Industrials industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 1.11 that is few above the industry median of 1.02.
HOTCHKIS & WILEY is the largest shareholder of the company among the gurus with 3.31% of outstanding shares, followed by Bill Nygren (Trades, Portfolio) with 1.72%, First Eagle Investment (Trades, Portfolio) with 0.82%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.44%, Pioneer Investments (Trades, Portfolio) with 0.43%, Joel Greenblatt (Trades, Portfolio) with 0.24%, Louis Moore Bacon (Trades, Portfolio) with 0.12% and Ray Dalio (Trades, Portfolio) with 0.09%.
Rolfe reduced his stake in Varian Medical Systems Inc. (VAR) by 93.37% with an impact of -2.06% on the portfolio.
The company manufactures medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy.
GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with strong returns of ROE of 24.36% and ROA of 11.49% that are over performing 87% of the companies in the Global Medical Devices industry. Financial strength has a rating of 8 out of 10, with a cash-to-debt of 1.31 that is below the industry median of 2.40.
Other notable shareholders among the gurus are First Eagle Investment (Trades, Portfolio) with 1.37% of outstanding shares, followed by Westport Asset Management (Trades, Portfolio) with 0.29%, Jim Simons (Trades, Portfolio) with 0.2%, Charles Brandes (Trades, Portfolio) with 0.19%, CI Can Am Small Cap (Trades, Portfolio) with 0.06% and Ray Dalio (Trades, Portfolio) with 0.05%.
Rolfe raised his stake in Stericycle Inc. (SRCL) by 46.89%, and the deal had an impact of 1.43% on the portfolio.
The company provides regulated and compliance solutions to healthcare and commercial businesses. This includes the collection and processing of specialized waste for disposal, and a variety of training, consulting, recall/return, communication, and compliance services. Fourth quarter AAP gross profit as a percent of revenues was 42.8% compared to 42.1% in the fourth quarter last year, and non-GAAP gross profit as a percent of revenues was 42.9% compared to 42.2% in the last year.
GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with strong returns of ROE of 11.36% and ROA of 5.24% that are over performing 74% of the companies in the Global Waste Management industry. Financial strength has a rating of 8 out of 10, with a cash-to-debt of 0.02 that is far below the industry median of 0.56.
Other notable shareholders among the gurus are Vanguard Health Care Fund (Trades, Portfolio) with 0.79% of outstanding shares, followed by Meridian Funds (Trades, Portfolio) with 0.58%, Manning & Napier Advisors, Inc with 0.15%, Ron Baron (Trades, Portfolio) with 0.13%, RS Investment Management (Trades, Portfolio) with 0.09% and Paul Tudor Jones (Trades, Portfolio) with 0.01%.
Rolfe increased his stake in The Kraft Heinz Co. (KHC) by 32.37% and with an impact of 1.01% on the portfolio.
The company is a consumer packaged food and beverage companies in North America and worldwide. It manufactures and markets food and beverage products, including cheese, meats, refreshment beverages, coffee, packaged dinners, refrigerated meals, snack nuts, dressings, and other grocery products. In the third quarter due to the merger of Kraft and Heinz, GAAP net sales increased 136% and adjusted pro forma EBITDA grew 4.8% on a constant currency basis. The company reported a 2.4% decrease for GAAP operating income.
GuruFocus gives the stock a profitability and growth rating of 6 out of 10 with weak returns of ROE of 3.69% and ROA of 2.40% that are under performing 61% of the companies in the Global Packaged Foods industry. Financial strength has a rating of 6 out of 10, with a cash-to-debt of 0.19 that is below the industry median of 0.62.
Warren Buffett (Trades, Portfolio) is the largest shareholder of the company among the gurus with 26.84% of outstanding shares, followed by John Griffin (Trades, Portfolio) with 0.27%, Andreas Halvorsen (Trades, Portfolio) with 0.17%, Lee Ainslie (Trades, Portfolio) with 0.12%, George Soros (Trades, Portfolio) with 0.06% and Steven Cohen (Trades, Portfolio) with 0.06%.
The investor reduced his stake in Alphabet Inc. (GOOGL) by 23.32% and the deal had an impact of -0.88% on the portfolio.
The company operates through subsidiaries including Google Inc., which is engaged in improving the ways people connect with information. The Google products include Search, Android, YouTube, Apps, Maps and Ads. Driven by mobile search as well as YouTube and programmatic advertising, all areas in which the company been investing for many years, it reported strong revenue growth in the fourth quarter, which reflects the vibrancy of its business.
GuruFocus gives the stock a profitability and growth rating of 8 out of 10 with strong returns of ROE of 14.18% and ROA of 11.84% that are over performing 66% of the companies in the Global Internet Content & Information industry. Financial strength has a rating of 9 out of 10 with a cash-to-debt of 14.
PRIMECAP Management (Trades, Portfolio) is the largest shareholder of the company among the gurus with 0.37% of outstanding shares, followed by Frank Sands (Trades, Portfolio) with 0.29%, Andreas Halvorsen (Trades, Portfolio) with 0.27%, Dodge & Cox with 0.16%, Ken Fisher (Trades, Portfolio) with 0.14% and Chris Davis (Trades, Portfolio) with 0.14%.
