Over the past several weeks, institutional investors around the world have slowly started to report their year-end holdings. While there are still many more funds slated to report, a number of the world’s best value investing firms have already disclosed their holdings, so I thought it would be interesting to put together a roundup of what these investment advisors are buying, selling and holding in the current environment.
Long-term value
The first firm, which reported only a few days ago, is Kahn Brothers (Trades, Portfolio) Advisors.
Founded by the legendary Irving Kahn, Kahn Brothers has long-term value investing in its blood. Kahn was not only one of history’s best value investors, but he was also the world’s oldest investor for a period. He died in 2015 at the age of 109. He lived through the 1929 Wall Street crash, which he managed to come out of relatively unscathed.
You could sum up Kahn’s investment strategy in a few words: He liked to buy undervalued stocks for the long term that had minimal risk of total loss.The firm's management today likely holds the same mentality.
During the fourth quarter, no new positions were added to the portfolio. The most substantial positions, Citigroup Inc. (C, Financial) (11.5% of the portfolio), BP PLC (BP, Financial) (9.3%) and New York Times Co. (NYT, Financial) (8.5%), were tweaked, but this just seems to be portfolio rebalancing. The largest position increases were GlaxoSmithKline (GSK, Financial) (up 11.6% to 1.14 million shares) and Assured Guaranty Ltd. (AGO, Financial) (up 18% to 1.06 million shares).
Working with Graham's broker
 Tweedy Browne (Trades, Portfolio) Co.’s Tweedy, Browne Global Value Fund has a history that’s almost as illustrious as that of the Kahn family business. Benjamin Graham’s Graham--Newman Corp. was one of its primary brokerage clients in the 1930s, 1940s and 1950s. From here, the team at Tweedy was able to learn from some of the best value investors of all time, including Warren Buffett (Trades, Portfolio) and Walter Schloss.
With such a rich history, Tweedy, Browne’s portfolio is certainly worth taking a look at to try and gain some idea of what top value investors might be buying today.
Of the 40 holdings in the Tweedy, Browne Value portfolio, only one new addition was made during the fourth quarter and 16 holdings were reduced -- a reflection, I believe, of the current market environment. Heineken Holding NV (XAMS:HEI), which makes up 5.3% of the portfolio, was reduced by 9.6%. Wells Fargo (WFC, Financial) was reduced by 15.6%, Total SA (TOT, Financial) by 4.9%, Diageo Plc (DEO, Financial) by 4.9%, Royal Dutch Shell (RDS.B, Financial) by 22.5% and Novartis AG (NVS, Financial) by 10%. The only buy was media agency WPP Group (WPP, Financial), which has seen its shares take a beating over the past 12 months due to concerns about the impact Facebook (FB) and Alphabet's Google (GOOG) are having on its business.
Richard Pzena (Trades, Portfolio)’s Hancock Classic Value Fund was slightly more active than Tweedy, Browne during the quarter, but not by much.
Like Khan Brothers, Pzena’s largest holding is Citigroup, which accounts for 4.2% of his overall portfolio. The second-largest holding is Hewlett Packard Enterprise (HPE, Financial) at 4.2%, which he increased by 22% during the quarter, followed by Royal Dutch Shell (4%), which was increased marginally by 1.5% during the quarter. A 2 million-share position in struggling generic drug producer Mylan (MYL) was reduced by 15.2%. The largest position increase was a 155% increase in Interpublic Group (IPG, Financial) to 3.2 million shares.
The last fund I’m going to review is Wallace Weitz (Trades, Portfolio)’s Weitz Value Fund. Again, there was not much activity here in the fourth quarter. The most substantial change was a 56% increase in the Allergan (AGN) position, which now accounts for 6.5% of the overall portfolio.
Mastercard (MA) and Twenty-First Century Fox (FOX), which together account for around 9% of the overall equity portfolio, were reduced by approximately 12.5%. A small, 4,700-share position in Priceline Group Inc. (PCLN) was added during the quarter.
Disclosure: The author owns no stocks mentioned.
