Ruane Cunniff (Trades, Portfolio) & Goldfarb, which manages the famed Sequoia Fund, invested in five stocks in the first quarter, a portfolio update last week revealed.
Founded in 1969 by Bill Ruane and Rick Cunniff, the firm approaches investing with a classic value philosophy, selecting high-quality businesses at discounted prices and holding for the long term. Since its start in 1970, the Sequoia Fund has garnered a return of 13.6% versus a 10.92% return in the S&P 500.
Ruane Cunniff (Trades, Portfolio) has the distinction of being recommended by Warren Buffett (Trades, Portfolio) when he closed down his partnership in the 1960s. More recently, its returns faltered due to a large position in Valeant Pharmaceuticals (VRX, Financial) before its share price imploded in 2015. The misstep prompted the resignation of Robert Goldfarb, and Ruane Cunniff (Trades, Portfolio) dissolved Valeant as its top position in favor of Berkshire Hathaway (BRK.A, Financial).
In the first quarter, their largest new positions were: Liberty Broadband Corp. (LBRDK, Financial), Altaba Inc. (AABA, Financial), Liberty Broadband Corp. (LBRDA, Financial), Secoo Holding Ltd. (SECO, Financial) and IRSA Propiedades Comerciales SA (IRCP, Financial).
“As was the case with our portfolio activity during 2017, we think recent changes have improved the attractiveness of our holdings by enhancing the quality and inherent growth rate of their underlying earnings while only modestly increasing their aggregate valuation relative to those earnings,” managers wrote in the first-quarter shareholder letter.
Liberty Broadband Corp. (LBRDK, Financial)
The firm acquired 2,747,777 shares of Liberty Broadband, giving it 2.11% portfolio weight. The stock’s first-quarter price averaged $90.
Liberty Broadband Corp. has a market cap of $12.9 billion; its shares were traded around $71.20 with a P/E ratio of 6.39 and P/S ratio of 592.40.
Ruane Cunniff (Trades, Portfolio)'s managers wrote in their first-quarter letter:
"Liberty Broadband (NASDAQ:LBRDA) is another holding company with essentially one asset: a large interest in leading U.S. cable company Charter Communications. We have long admired the management at Charter and view it as a competitively advantaged provider of what many describe as the essential utility of the 21st century: broadband internet service. Calculating the earning potential of this evolving, capital-intensive business is a complicated exercise, but by our reckoning, we purchased our stake for a low price relative to the cash profit growth we expect in coming years."
The firm bought 3 million shares of Altaba, giving it 2% portfolio weight. The stock’s first-quarter share price averaged $75.
Altaba Inc. has a market cap of $61.92 billion; its shares were traded around $76.45 with and P/S ratio of 17.86.
Liberty Broadband Corp. (LBRDA, Financial)
The firm bought 1,138,018 shares of Liberty Broadband, giving it $90 portfolio weight. The stock’s first-quarter share price averaged $90.
Liberty Broadband Corp. has a market cap of $12.9 billion; its shares were traded around $70.76 with a P/E ratio of 6.39 and P/S ratio of 592.10.
Secoo Holding Ltd. (SECO, Financial)
The firm purchased 1 million shares of Secoo Holding Ltd., giving it 0.09% portfolio weight. The stock’s share price averaged $12.
Secoo Holding Ltd. has a market cap of $501.050 million; its shares were traded around $9.91 with and P/S ratio of 0.71.
IRSA Propiedades Comerciales SA (IRCP, Financial)
The firm purchased 100,000 shares of IRSA Propiedades Comerciales, giving it 0.04% portfolio weight. The stock’s share price averaged $50.
IRSA Propiedades Comerciales SA has a market cap of $1.14 billion; its shares were traded around $33.50 with a P/E ratio of 1.95 and P/S ratio of 8.22. The trailing 12-month dividend yield of IRSA Propiedades Comerciales SA stocks is 5.58%. The forward dividend yield of IRSA Propiedades Comerciales SA stocks is 6.98%.
See Ruane Cunniff (Trades, Portfolio)’s portfolio here.
