Wallace Weitz

Wallace Weitz

Last Update: 2014-11-13

Number of Stocks: 65
Number of New Stocks: 6

Total Value: $3,399 Mil
Q/Q Turnover: 8%

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

Wallace Weitz' s Profile & Performance

Profile

Portfolio manager of Weitz Value Fund, Weitz Hickory Fund and Weitz Partners Value Fund, which he started in 1983.

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

Investing Philosophy

Weitz's approach to value investing has evolved over the years. It combines Graham's price sensitivity and insistence on a "margin of safety" with a conviction that qualitative factors that allow a company to have some control over its destiny can be more important than statistical measurements, such as historical book value or reported earnings.

Historical Allocation of Stock, Bonds, Cash

Total Holding History

Performance of Weitz Partners Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201330.8731.55-0.7
201217.9215.42.5
20112.192.080.1
3-Year Cumulative57.7 (16.4%/year)55 (15.7%/year)2.7 (0.7%/year)
201027.4915.0612.4
200931.326.464.8
5-Year Cumulative164 (21.4%/year)125.5 (17.7%/year)38.5 (3.7%/year)
2008-38.06-37-1.1
2007-8.545.61-14.2
200622.5315.796.7
2005-2.424.91-7.3
200414.99123.0
10-Year Cumulative105.6 (7.5%/year)104.1 (7.4%/year)1.5 (0.1%/year)
200325.3828.7-3.3
2002-16.99-22.15.1
2001-0.86-11.911.0
200021.07-9.130.2
199922.02211.0
15-Year Cumulative213.4 (7.9%/year)98.3 (4.7%/year)115.1 (3.2%/year)
199829.1328.60.5
199740.6433.47.2
199619.0423-4.0
199538.6637.61.1
1994-8.971.3-10.3
20-Year Cumulative755.2 (11.3%/year)483.2 (9.2%/year)272 (2.1%/year)
199323.0310.112.9
199215.147.67.5
19912830.5-2.5
1990-6.35-3.1-3.2
198920.2531.7-11.5
25-Year Cumulative1646.3 (12.1%/year)1050.7 (10.3%/year)595.6 (1.8%/year)
198814.9316.6-1.7
19874.255.1-0.8
198611.1618.6-7.4
198540.7231.69.1
198414.436.18.3
30-Year Cumulative3645.2 (12.8%/year)2235.1 (11.1%/year)1410.1 (1.7%/year)

Top Ranked Articles

Wally Weitz on credit problems and corporate buyout financing, Washington Mutual
Wally Weitz, known as the other Oracle of Omaha,explained the current credit mania on Wall Street. This is a recommended reading for all readers. He said that "There are signs that serious credit Read more...
Wally Weitz's Portfolio – Buffett Ratio Guru Portfolio Analysis
The following is an analysis of the most current portfolio of Mr. Wally Weitz. The analysis will use a system that I designed that is based on the ratio that Warren Buffet released to the public in 1986, which he coined “Owner Earnings.” For those new to this type of analysis, I would recommend reading an introduction to my system by clicking here. My goal is ultimately to analyze the portfolios of each guru highlighted here on GuruFocus, and then to subsequently re-analyze them every quarter when possible as changes are made. My purpose in writing these articles is to show the power of Buffett’s ratio in analyzing stocks, ETFs, mutual funds and individual portfolios. If one can fill their portfolios with companies that score high using my system and avoid those which fail, one should be able to increase the probability of becoming a successful investor in my opinion. Read more...
Wally Weitz on Berkshire Hathaway, American International Group, American Express, Redwood Trust, Fannie Mae and Freddie Mac
Like many other value investors, Wally Weitz is having rough times lately. Known as the other Oracle of Omaha, Weitz sees opportunities in the current beaten down market. This is a review of his commentaries on some of his holdings. Read more...
Wallace Weitz: A Quick Glance
As an avid reader and equally devoted investor, I try to read as many investment or financial books as I am able. When nothing new on the book shelves at the local book store has caught my attention, I will often re-read the volumes that enjoy a prominent place in my office. Yes, that includes re-reading the treasures, such as "The Intelligent Investor" and "Security Analysis." I will vouch that they are actually better each time you read them. Read more...
Emotional Arbitrage- Wally Weitz Continues to Outperform
Despite more than 25 years of averaging more than 12% annually, Wally Weitz will always be known as that other guy from Omaha. He doesn’t have any problems be called that though, and credits Warren Buffett for much of his success. He’s owned Berkshire Hathaway continuously since buying the A shares in 1976 for $3,000/share. Read more...
» More Wallace Weitz Articles

Commentaries and Stories

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Wallace Weitz Buys Discovery Communications, Sells Apple in Q3 Wallace Weitz - Wallace Weitz Buys Discovery Communications, Sells Apple In Q3
Wallace Weitz (Trades, Portfolio) entered the investing world at the age of 12 when he purchased his first stock. Since then, he’s made a career in what he’s called his hobby — he spent 10 years as an analyst and portfolio manager at Chiles, Heider & Co. before founding the Omaha, Nebraska-based Weitz Investment Management in 1983. More...

WALLACE WEITZ, WEITZ INVESTMENT MANAGEMENT


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Graham & Doddsville Newsletter Fall 2014 Wallace Weitz - Graham & Doddsville Newsletter Fall 2014
Graham and Doddville is Columbia Business School's student-led investment newsletter, co-sponsored by the Columbia Student Investment Management Association (CSIMA) and the Heilbrunn Center for Graham and Dodd Investing. More...

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Wallace Weitz Comments on Precision Castparts
Precision Castparts (PCP) is a global, diversified manufacturer of complex metal components and products sold primarily to aerospace, power and industrial customers. CEO Mark Donegan is a first-rate operator, sound strategic thinker and highly skilled acquirer / integrator. Concerns over the health of the new commercial aircraft cycle provided us an opportunity to establish an initial position at what we believe is an attractive discount. We have been heartened by management’s more recent decisions to repurchase stock and look forward to the prospect of additional value-accretive M&A in the future. More...

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Wallace Weitz Comments on Discovery Communications
Discovery (DISCA) is a world-class provider of global pay-tv programming including ‘must-carry’ channels (Discovery, TLC and Animal Planet) as well as emerging and niche networks (ID, OWN and Science, among others). Non-fiction content is a wonderful business – it is cheap to produce and portable across geographies, driving excellent margins and cash flows. Discovery is especially well positioned to benefit from the long-tailed wave of increasing pay-tv adoption outside the U.S. The company generally owns the full rights to its content, providing bargaining power as the distribution ecosystem evolves. We project per-share cash flow growth in the high teens over the next several years, fueled by the international business. From today’s price, we think the stock’s return potential is adequate-to-exceptional with solid downside protection. More...

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Wallace Weitz Comments on Microsoft
Microsoft (MSFT) reported strong fiscal fourth quarter results in late July with attractive growth across its core franchises accompanied by sound cost discipline. Investors appear to have finally taken notice of Microsoft’s numerous strengths after several years of disproportionate focus on its flaws. More...

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Wallace Weitz Comments on eBay Inc
On the final day of the quarter, eBay (EBAY) announced its intention to separate into two separate publicly-traded companies – PayPal and “new” eBay – during the second half of 2015. Despite some initial excitement, investor sentiment remains lukewarm and the stock undervalued. More...

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Wallace Weitz Comments on Berkshire Hathaway Inc
Berkshire (BRK.B) enjoyed a relatively strong start to the year operationally with non-insurance operating earnings up 12% during the first half of 2014 despite headwinds at Burlington Northern. Buffett’s willingness to repurchase Berkshire shares at or below 120% of book value continues to provide a nice and gradually rising backstop for the stock. More...

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Wallace Weitz's Value Fund Q3 2014 Commentary
The Value Fund’s Investor Class declined -0.1% during the third calendar quarter, compared to a 1.1% gain for the S&P 500 and a 0.7% increase for the Russell 1000. Through the first nine months of calendar 2014, the Fund’s Investor Class increased 5.3% compared to an 8.3% gain for the S&P 500 and an +8.0% return for the Russell 1000. The Fund’s conservative bent and elevated residual cash position have been the primary drivers of our relative underperformance so far this year. As we enter the fourth quarter, we are encouraged by a growing divergence between the stock prices and business values of an increasing number of the individual companies on our “on deck” list. We have been waiting patiently for opportunities and remain watchful as the Fed looks to end its quantitative easing program during October amidst softening economic conditions across much of the globe. More...

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Wallace Weitz Comments on Avon Products
We bought relatively small new positions in Willis Group Holdings and Avon Products in the third quarter. Avon (AVP) is a direct selling, branded beauty business undergoing a turnaround in the U.S. market. The overwhelming majority of Avon’s business value comes from its stronger positions in Latin America and other emerging markets. Our investment thesis is that well-run direct selling can be a decent business with solid margins and high returns, that the Avon brand is not fundamentally broken, and that the U.S. business is bottoming as evidenced by break-even results in the most recent quarter. Avon has a wider range of potential outcomes than our typical investment and is sized accordingly. More...

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Wallace Weitz Comments on Willis Group Holdings
We bought relatively small new positions in Willis Group Holdings and Avon Products in the third quarter. Willis (WSH) is a leading global insurance broker. We have followed this attractive industry for many years through investments in Aon, Brown & Brown and others (including Willis under prior management). Organic revenue growth has been solid, and Willis has a near-term opportunity to expand margins through expense initiatives and restructuring savings that are likely to kick in next year. We think the stock should be revalued higher once management follows through on its pledged cost discipline and drives operating leverage. More...

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Wallace Weitz Comments on Interval Leisure
Interval Leisure (IILG) (-37%) was the largest detractor and one of our few companies where business value declined. Our earnings estimates fell roughly 15% when Interval announced that four large, multi-year corporate relationships renewed at less favorable rates in their timeshare exchange business. We think the stock has overreacted to this news, and the company continues to add strategically to its platform. More...

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Wallace Weitz's Partners Value Fund Q3 2014 Commentary
The Partners Value Fund’s Investor Class returned -1.4% in the third calendar quarter, compared to a +1.1% return for the S&P 500 and flat results for the Russell 3000. The largest companies were generally the strongest performers in the third quarter, most notably Microsoft (MSFT) (+12%), Berkshire Hathaway (BRK.B) (+9%) and Valeant Pharmaceuticals (VRX) (+4%) for our Fund. Conversely, small cap stocks fell sharply in July and again in September, with the Russell 2000 index finishing down 7.4% for the quarter. While smaller companies account for approximately 10% of our net assets, these stocks drove most of the Fund’s quarterly decline. Iconix Brand Group (ICON) (-14%), Redwood Trust (RWT) (-14%) and Interval Leisure Group (IILG) (-13%) were the primary small cap detractors. Energy holdings Range Resources More...

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Wally Weitz Q3 2014 Shareholder Letter
Dear Fellow Shareholder: More...

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Wallace Weitz's Partners Value Fund Q2 Commentary
June 30, 2014 The Partners Value Fund returned +2.0% in the second calendar quarter, compared to +5.2% for the S&P 500 and +4.9% for the Russell 3000. The Fund’s consumer discretionary stocks contributed to returns, led by DIRECTV (DTV) (+11%). After plenty of speculation, AT&T agreed to acquire DIRECTV at a modest premium to our stand-alone valuation. Energy stocks also rose strongly during the quarter as crude oil prices remained above $100 per barrel. While Apache (+22%) participated, the Fund did not have enough energy exposure to keep pace. ADT Corporation (+17%) delivered better-than-feared quarterly earnings against low expectations. More...

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Wallace Weitz's Value Fund Q2 Commentary
The Value Fund returned +2.3% during the second calendar quarter, versus gains of 5.2% for the S&P 500 and 5.1% for the Russell 1000. Through the first six months of calendar 2014, the Fund increased 5.4% compared to gains of 7.1% and 7.3% for the S&P 500 and Russell 1000, respectively. Residual cash declined from 29.8% of net assets at the end of the first quarter to 26.5% of net assets at June 30 as we took advantage of buying opportunities in several of our existing holdings. More...

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Weitz Investment Management Comments on DIRECTV
DIRECTV (DTV) is on the receiving end of a takeover offer—it is the target of an acquisition by AT&T. DIRECTV had grown its business steadily over the years and had increased its value per share significantly by making very large share repurchases. AT&T is offering roughly twice the price we paid for our first shares about three years ago. We have mixed feelings about giving up our holdings but it has been a good investment for us. More...

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Weitz Investment Management Comments on Berkshire Hathaway
Berkshire Hathaway (BRK.A)(BRK.B) is also an active acquirer, both at the parent company level and through its various subsidiaries. Warren Buffett (Trades, Portfolio) is holding cash reserves of $40-50 billion and has expressed strong interest in making more very large acquisitions. Berkshire recently agreed to swap its long-time holdings of the Washington Post Company (now called Graham Holdings) for a TV station and Berkshire shares held by that company. When completed, this tax-efficient transaction will reduce the number of Berkshire shares outstanding and add another cash generating asset to the fold. Berkshire is constantly growing and evolving as a group of operating businesses but also, in extreme stock market dislocations like 2008, Warren has the courage and capacity to make bold investment moves. Berkshire has been a holding in our stock funds More...

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Wally Weitz Q2 Shareholder Letter Wallace Weitz - Wally Weitz Q2 Shareholder Letter
In many ways, the second quarter of 2014 was a continuation of the past several quarters. After a weather-induced first quarter dip in GDP, the U.S. economy resumed its modest recovery from the “Great Recession” of 2007-09. The Federal Reserve “tapered” its quantitative easing (QE) program but still purchased $310 billion of bonds during the first half of the year. U.S. stocks continued to drift up—the conventional wisdom being that while valuations were not compelling, as long as the Fed was providing “liquidity” and near-zero interest rates, it was safe to continue buying. In fact, failure to keep buying exposed investors to the risk of being left out of the continuing bull market. More...

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Weitz Investment Management Comments on Wesco Aircraft Holdings
We initiated a small position in Wesco Aircraft Holdings (WAIR) during the quarter. Wesco is a distributor and supply chain manager to the commercial and military aerospace markets. The company should benefit from the multi-year commercial aerospace build-out that is underway. We expect this tailwind to provide visible growth through at least 2017. Wesco also has an opportunity to provide more services to large defense contractors as funding pressures force the industry to become more efficient. If the company can improve margins along the way, we think the resulting earnings growth could provide reasonable-to-good return potential for the stock. More...

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Weitz Investment Management Comments on Brown & Brown
We also added a new position in insurance broker Brown & Brown (BRO) when the stock fell below $29 in February. The company's business model generates high operating margins and strong free cash flow. We expect management to remain disciplined acquirers of culturally compatible companies. In the meantime, Brown & Brown would benefit from an increase in insurable exposure units in the middle-market economy. Said more simply, as "Main Street" recovers, Brown & Brown should do well. More...

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