Wedgewood Partners’ David Rolfe (Trades, Portfolio) gained two new holdings and divested another in the final quarter of 2016. He established positions in Tractor Supply Co. (TSCO, Financial) and Fastenal Co. (FAST, Financial). He sold out of Stericycle Inc. (SRCL, Financial).
With over 29 years of portfolio management experience, Rolfe serves as the chief investment officer at Wedgewood. The firm believes significant long-term wealth is created by investing as “owners” in a company. Wedgewood seeks highly profitable companies that offer a dominant product or service, consistently grow earnings, revenues and dividends and have strong management teams that prioritize shareholders. The current portfolio is composed of 36 stocks and is valued at around $4.1 million.
Rolfe purchased 1,556,174 shares of Tractor Supply for an average price of $71 per share, expanding the portfolio 2.88%.
Tractor Supply operates retail farm and ranch supply stores. Headquartered in Brentwood, Tennessee, the company has a market cap of $9.3 billion; its shares were trading around $70.83 on Friday with a price-earnings (P/E) ratio of 21.6, a forward P/E ratio of 20.2, a price-book (P/B) ratio of 6.4 and a price-sales (P/S) ratio of 1.4.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 8 of 10. The trailing 12-month dividend yield is 1.3%, and the forward dividend yield is 1.4%. Over the past five years, Tractor Supply has grown its dividend at an average rate of 32.1% per year.
With this transaction, Rolfe became Tractor Supply’s largest shareholder among the gurus with 1.2% of outstanding shares. Steven Cohen (Trades, Portfolio) has the second-largest holding with 0.6% of outstanding shares. In all, nine gurus hold the stock.
Rolfe bought 2,493,679 shares of Fastenal for an average price of $43.88 per share, giving it 2.86% portfolio space.
Fastenal distributes industrial and construction supplies. The Winona, Minnesota-based company has a market cap of $14.5 billion; its shares were trading around $50.32 on Friday with a P/E ratio of 29.1, a forward P/E ratio of 27.6, a P/B ratio of 7.5 and a P/S ratio of 3.6.
The Peter Lynch chart below shows the stock is trading above its fair value.
GuruFocus ranked the company’s financial strength 7 of 10 and its profitability and growth 8 of 10. The trailing 12-month dividend yield is 2.4%, and the forward dividend yield is 2.5%. Over the past five years, Fastenal has grown its dividend at an average rate of 13.8% per year.
Ruane Cunniff (Trades, Portfolio) is the company’s largest guru shareholder with 3.3% of its outstanding shares. This represents 4.2% of his total assets managed. In total, nine gurus have positions in Fastenal.
Rolfe also exited his stake in Stericycle during the quarter, selling 2,557,466 shares for an average price of $75.51 per share. The trade had an impact of -4.3% on the portfolio.
Industrial stocks have a weight of 7.3% in Rolfe’s portfolio. Consumer cyclical stocks have a weight of 17.5%.
Disclosure: I do not own any stocks mentioned in the article.
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