Bill Nygren

Bill Nygren

Last Update: 2014-02-19

Number of Stocks: 55
Number of New Stocks: 2

Total Value: $11,485 Mil
Q/Q Turnover: 4%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Bill Nygren' s Profile & Performance

Profile

Bill Nygren is Portfolio Manager of The Oakmark Fund, The Oakmark Select Fund, and the Oakmark Global Select Fund. Bill has an M.S. in Finance from the University of Wisconsin-Madison, and a B.S. in Accounting from the University of Minnesota.

Web Page:http://www.oakmark.com/

Investing Philosophy

Bill Nygren and his partners are value investors, and they invest in companies that they believe trade at a substantial discount to what they consider to be the true business value. They believe that, over time, the price of a stock will rise to reflect the value of the underlying company. In evaluating potential investments, they focus on the following characteristics: A company's stock price and whether it is a significant discount to their estimate of underlying business value, free cash flows and intelligent investment of excess cash, and a high level of manager ownership. They look at each purchase as if they are buying a piece of a business, and not just a stock certificate.

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of Oakmark Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201337.2931.555.7
201220.9715.45.6
20111.822.08-0.3
3-Year Cumulative69.1 (19.1%/year)55 (15.7%/year)14.1 (3.4%/year)
201012.1815.06-2.9
200944.7726.4618.3
5-Year Cumulative174.6 (22.4%/year)125.5 (17.7%/year)49.1 (4.7%/year)
2008-32.61-374.4
2007-3.645.61-9.3
200618.2615.792.5
2005-1.314.91-6.2
200411.7312-0.3
10-Year Cumulative132.6 (8.8%/year)104.1 (7.4%/year)28.5 (1.4%/year)
200325.328.7-3.4
2002-14.41-22.17.7
200118.29-11.930.2
200011.78-9.120.9
1999-10.4721-31.5
15-Year Cumulative195.2 (7.5%/year)98.3 (4.7%/year)96.9 (2.8%/year)
19983.7328.6-24.9
199732.5933.4-0.8
199616.2123-6.8
199534.4237.6-3.2
19943.311.32.0
20-Year Cumulative555.3 (9.9%/year)483.2 (9.2%/year)72.1 (0.7%/year)
199330.510.120.4
199248.97.641.3

Top Ranked Articles

Gurus On Board: Ask Bill Nygren -- The Answers
Bill Nygren is the portfolio manager of the $5.8 billion Oakmark Fund (10–year average 7.26% ) and more concentrated $5.9 billion Oakmark Select Fund (10-year average 15.16%). Recently our readers got an opportunity to ask him questions, and today we got his answers back. Read more...
Bill Nygren's Investing Answers to GuruFocus Q&A
GuruFocus took reader questions for highly respected and well-known value investor Bill Nygren of the Oakmark Funds (OAKIX)(OAKMX) a few weeks ago. Read more...
JNJ CFO on Synthes Financing
On Tuesday, Dominic Caruso, CFO and VP at Johnson & Johnson (JNJ), presented at the Morgan Stanley Global Healthcare Conference. Most people know the back story on JNJ and where they stand today, so I won’t waste too much time on that topic. The one item that has been a key focal point in investor discussions as of late is the Synthes acquisition. A bit of the background from the press release in April when the deal was announced: Read more...
Kohl's- 20% off for a limited time only!
A while ago I ran a quick screen for cheap stocks with demonstrated earnings growth and a strong financial position. Often, screening for stocks leads me to small or unheard of companies, which sometimes do indeed present valuable opportunities. However, after this particular screen, one company was on my list which I needed no introduction to- Kohl’s. After a cursory analysis, I decided to research the company more thoroughly… Read more...
Bill Nygren on Best Buy (BBY), Capital One Financial (COF), Federal Express (FDX), Home Depot (HD)
Bill Nygren is the portfolio manager of the $5.8 billion Oakmark Fund (10–year average 7.26%) and more concentrated $5.9 billion Oakmark Select Fund (10-year average 15.16%). Read more...
» More Bill Nygren Articles

Commentaries and Stories

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Oakmark's Bill Nygren Discusses Financials, Favorite Stocks Bill Nygren - Oakmark's Bill Nygren Discusses Financials, Favorite Stocks
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Bill Nygren Comments on Franklin Resources
We established a position in Franklin Resources (BEN), one of the world’s largest global mutual fund companies, with leading products in both equities and fixed income. For starters, we believe asset management is an attractive business and Franklin has a history of strong fund performance across various asset classes and geographies. The company is selling for less than 14x our estimate of this year’s EPS and just over 11x adjusting for net cash and securities. In our view, this is a cheap price for a well-run company in such an attractive industry. Management has historically returned capital to shareholders through stock buybacks and dividends, and with insiders owning 35% of outstanding shares, we expect Franklin to continue to be good stewards of shareholders’ capital. More...

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Bill Nygren Comments on TI
We also eliminated the remainder of our investment in TI (TI) as the final tranche of shares went long term. TI offers another example of a management team that we believe puts its shareholders first in a situation where many do not. Since its acquisition of National Semiconductor in 2011, TI has been generously returning excess capital to shareholders while maintaining a prudent, but not lazy, balance sheet. This likely contributed to their shares approaching our estimate of fair value. Many large technology companies today simply grow their already immense cash positions and offer little insight into their plans for distributing that excess capital. We believe TI set a terrific example for other companies in the technology sector. Finally, we also sold Newfield Exploration after we came to believe that its effort to transition the company to liquids was a low-return proposition that would limit its ability to grow per-share value. More...

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Bill Nygren Comments on Forest Laboratories
After returning 40% last quarter, Forest (FRX) returned another 52% in the first quarter as the company agreed to be acquired by Actavis for both cash and stock. We believe the acquisition price was full and fair. While our investment thesis – that Forest’s new drug launches would be successful and leverage the company’s expenses – did not have the chance to transpire, we are more than pleased that the stock price reached our estimated value in short order. It’s not uncommon for the management of companies in transition to resist being acquired before their strategies to create value are fully realized. We applaud the leaders at Forest for their willingness to pull forward this value, even if it denied them the personal satisfaction of seeing their efforts realized in the coming years. We believe this could serve as a lesson for the leadership of other public companies. If someone wants to pay a fair price on a risk-adjusted basis for ‘what could be’ in your business, you owe it to your shareholders to realize this value so that they can recycle their capital into other attractively valued investments. More...

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Bill Nygren's Oakmark Select Fund - First Quarter 2014 Letter
For the quarter, the Oakmark Select Fund gained 5%, compared to 2% for the S&P 500 Index. We are pleased to report the Fund ended the quarter at a new all-time high NAV, meaning that as of 03/31/14, all current Select shareholders have unrealized gains in their holdings. These strong absolute and relative results were due in large part to Forest Laboratories (Forest) agreeing to be acquired by Actavis Plc in the quarter. Our relatively large exposure to auto-related cyclicals and financials continued to benefit our results. The largest detractors were MasterCard, Kennametal and FedEx. As discussed below, we eliminated our positions in Forest, Texas Instruments (TI) and Newfield Exploration, and we established new positions in Franklin Resources and CBRE Group (CBRE). More...

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Bill Nygren and David Herro Comment on FedEx
FedEx (FDX) was another detractor for the quarter, falling 8%. FedEx reported weak third quarter numbers, which were significantly skewed by unusually severe weather and the company’s widely reported difficulties during the holiday season. Despite the issues with inclement weather, FedEx’s ground segment grew nicely; its volume and price grew 8% and 2%, respectively. However, in spite of this performance, the segment’s margins trailed last year’s, primarily because of hub/network expansion costs. In our view, this expansion will allow for rapid growth and share gains and is, therefore, worth the short-term costs. Finally, we believe FedEx remains focused on its shareholders and on returning capital via stock buybacks. During the most recent quarter, it repurchased approximately $2.7 billion of stock, and since its stock-repurchasing program began in October 2013, the company has repurchased 25 million — or 8% — of its outstanding shares. We expect further buybacks with 15 million shares left under the current authorization. More...

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Bill Nygren and David Herro Comment on Daiwa Securities
Daiwa Securities (TSE:8601), Japan’s second-largest broker, was the largest detractor for the quarter, falling 12%. Daiwa’s stock price was negatively impacted by general Japanese market weakness during the first quarter. More...

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Bill Nygren and David Herro Comment on Bank of America
Bank of America (BAC) was the top contributor for the quarter, returning 11%. The company's most recent quarterly earnings report demonstrated continued progress toward achieving management's expense reduction targets, driven in large part by declines in the cost of servicing its "legacy" mortgages. As management executes on its plan, investors have increasingly recognized the normalized earning power of Bank of America. We believe the combination of further operational improvements and the company's plan to return capital to shareholders – through its recently increased dividend and additional repurchase authorization – will lead to continued gains in the stock. More...

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Oakmark Global Select Fund - First Quarter 2014 Commentary
The Oakmark Global Select Fund returned 2% for the quarter ended March 31, 2014, outperforming the MSCI World Index’s 1% return. For the first six months of this fiscal year, the Fund was up 9%, in line with the MSCI World Index. The Fund has returned an average of 9% per year since its inception in October 2006, outperforming the MSCI World Index’s annualized gain of 5% over the same period. More...

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Bill Nygren Comments on Merck
We eliminated our position in Merck (MRK) as the shares appreciated to our estimate of fair value. More...

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Bill Nygren Comments on General Motors
Our worst performer was General Motors (GM), down 15%, due to what we believe was the market’s overreaction to GM’s handling of a recent product recall. More...

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Bill Nygren Comments on Bank of America
Another top performer was our largest position, Bank of America (BAC). We still think the financial services sector is attractively valued, and with Bank of America, we are pleased to see investors recognize better visibility of higher future earnings and an enhanced capacity to return excess capital to shareholders. More...

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Bill Nygren Comments on Forest Laboratories
The best performing stock in the quarter was Forest Laboratories (Forest), up 54%. Forest has been an incredibly successful investment for the Oakmark Fund, and we offer our congratulations to the company’s board and management team for maximizing per-share value for shareholders. It has only been one year since we first wrote about our purchase of Forest, and since then, the share price has increased 149%. Please refer to the Oakmark Select commentary for a more detailed description of our tax-efficient sale strategy for Forest. More...

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Bill Nygren Comments on Sanofi
Sanofi (SNY - $52)(SNY)Sanofi is a pharmaceutical company with a good mix of durable businesses with strong growth characteristics. The company has a strong franchise in diabetes treatments, maintaining dominant market share in this rapidly growing category. Sanofi is a leading player in emerging markets, where sales growth rates are twice that of the overall pharmaceutical market. Sanofi is also a leader in vaccines, and they have a strong footprint in over-the-counter products. We think that margins and profitability should improve as the company leverages fixed R&D spending and enforces good cost controls. The company’s balance sheet has more cash than debt, and the shares sell at a substantial discount to our estimate of intrinsic value. Moreover, Sanofi has a dividend yield of 3.7%. More...

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Bill Nygren Comments on General Mills Inc.
General Mills, Inc. (GIS - $52)(GIS)We believe General Mills is a high quality, well-managed packaged foods company with exposure to fast-growing product categories. The company has an impressive track record of stable earnings growth, and it has consistently returned most of its strong free cash flow to shareholders in the form of share repurchases and dividends. We think revenue and margins will continue to grow, primarily driven by its international business. The company has an attractive global cereal joint venture with Nestle, which often gets overlooked by investors. With consistent profit growth and a shrinking share base, we like its prospects for per-share value growth. In addition, General Mills has a dividend yield of 3.2%. More...

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Bill Nygren Comments on Diageo PLC
Diageo PLC (DEO - $125)(DEO)Diageo is the world’s largest spirits manufacturer. Diageo has a portfolio of spirits brands that is among the best in the industry, including a leading scotch franchise that is nearly impossible to replicate. These strong brands are supported by the company’s global scale, which allows for meaningful efficiencies in manufacturing, distribution and marketing. As a result of these advantages, we believe Diageo will maintain its excellent competitive position. At the same time, revenues have grown consistently for years due to a combination of pricing power and emerging markets exposure, and this growth should continue for the foreseeable future. We believe this well-managed company is selling at a large discount to intrinsic value. Further, Diageo has a dividend yield of 2.5%. More...

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Bill Nygren Comments on Citigroup Inc.
Like its universal bank peers, we think Citigroup is significantly undervalued relative to its normalized earnings power. Unlike its peers, however, it has two hidden sources of value, neither of which is reflected in GAAP earnings: a deferred tax asset and a larger base of excess capital that is growing at a rapid rate. We have long admired Citigroup’s global franchise and its growth potential. One of Citigroup’s key competitive advantages is its unique global reach. Citigroup has more than twice as many country banking licenses and direct local payment network connections as its closest competitor. As a result, we think Citigroup is uniquely positioned to offer corporate clients more visibility into their asset, liability and currency exposures, but requires fewer resources to manage the relationship. We would be remiss not to mention Citigroup’s recent Fed stress test results. Although the qualitative results were disappointing, its quantitative stress test results confirm our analysis that the company has significantly more excess capital than its peers. We expect this capital to eventually benefit shareholders either through capital return or smart balance sheet More...

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Bill Nygren's Oakmark Fund First Quarter 2014 Commentary
The Oakmark Fund increased 2% in the first quarter, fractionally exceeding the S&P 500 gain, which also rounded to 2%. For the first half of our fiscal year Oakmark Fund was up 14%, compared to 13% for the S&P 500. Additionally, the Fund ended the quarter at an all-time high price. Because our goal is to increase the capital of our shareholders, we are always pleased to report new highs. More...

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Buying Back Stock May Help Rebuild the Credibility
Bank of America Corporation (BAC) is a bank and financial holding company. Through its banking and various nonbanking subsidiaries throughout the U.S. and in international markets, the company provides a range of banking and nonbanking financial services and products through five business segments: Consumer & Business Banking, Consumer Real Estate Services, Global Banking, Global Markets and Global Wealth & Investment Management, as well as All Other. More...

LONG, FINANCE, BANKS, BANKING, REAL ESTATE, INVESTMENT


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Oakmark Funds - Finding Quality in Europe
Many investors continue to believe that European stocks are too risky. But in our view, Europe offers a wide variety of investing opportunities. Other investors’ hesitation to invest in the region has provided us with the chance to purchase high quality stocks that are undervalued simply due to geography. More...

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