David Rolfe

David Rolfe

Last Update: 11-14-2017

Number of Stocks: 38
Number of New Stocks: 2

Total Value: $2,932 Mil
Q/Q Turnover: 3%

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

David Rolfe' s Profile & Performance

Profile

David Rolfe has been managing Wedgewood's portfolio for 18 years. He studied at University of Missouri and received a degree of B.S.B.A. in Finance/Economics in 1984.

Web Page:http://wedgewoodpartners.com/

Investing Philosophy

Wedgewood's underlying equity investment philosophy is predicated on a strong belief that significant long-term wealth will be created by investing as "owners" in companies. In our "Invest as Business Owners" approach, we seek companies that the following characteristics:

1. A dominant product or service that is practically irreplaceable or lacks substitutes.
2. A sustainable and consistent level of growing revenues, earnings and dividends.
3. A high level of profitability, measured by return on equity without the use of excessive debt.
4. A strong management team that is shareholder oriented.

This is the flow chart of their process:

Total Holding History

Performance of Wedgewood Partners

YearReturn (%)S&P500 (%)Excess Gain (%)
20164.5411.96-7.4
2015-6.491.38-7.9
20149.213.69-4.5
3-Year Cumulative6.7 (2.2%/year)29 (8.9%/year)-22.3 (-6.7%/year)
201329.8632.39-2.5
201221.75165.8
5-Year Cumulative68.8 (11%/year)98.2 (14.7%/year)-29.4 (-3.7%/year)
20115.612.113.5
201014.515.06-0.6
200960.8326.4634.4
2008-38.12-37-1.1
200715.045.499.6
10-Year Cumulative133.7 (8.9%/year)95.7 (6.9%/year)38 (2%/year)
2006-2.7715.79-18.6
20055.844.910.9
20049.6110.88-1.3
200342.2528.6813.6
2002-20.42-22.11.7
15-Year Cumulative198.4 (7.6%/year)164.2 (6.7%/year)34.2 (0.9%/year)
2001-7.72-11.894.2
2000-10.31-9.1-1.2
199956.9921.0436.0
199849.628.5821.0
199721.133.36-12.3
20-Year Cumulative602.3 (10.2%/year)339.2 (7.7%/year)263.1 (2.5%/year)
199623.5722.960.6
199542.5937.585.0
19943.781.322.5
1993-6.2110.08-16.3

Top Ranked Articles

Wedgewood Partners - Humility and Rationality in Practice Why I admire Dave Rolfe and the Wedgewood Partner team
One of my favorite gurus is Dave Rolfe, who built Wedgewood Partners from a small shop to a multi-billion-dollar reputable fund. I think Wedgewood is unique in many ways such as being a truly focused high-quality money manager and being impressively adaptive with the investment in technology companies such as Alphabet (NASDAQ:GOOG) and Priceline (NASDAQ:PCLN) way ahead of other value investors. But the thing that I admire most about Dave is his humility and rationality. Read more...
David Rolfe Comments on Edwards Lifesciences Guru stock highlight
We established a new position in Edwards Lifesciences (NYSE:EW) in the first quarter. Edwards is a pioneer in heart valve surgery, with nearly 90% of its revenues tied to heart valve replacement, by virtue of its best-in-class portfolio of intellectual property, backed by a relatively lengthy history of clinical data and successful outcomes. Heart disease is the world’s leading killer, and the incidence of heart disease grows with age, meaning that the aging of populations across the developed world is directly leading to a rise in the occurrence of heart problems. Over half of the Company’s business is tied to the rapidly-growing TAVR, or Transcatheter Aortic Valve Replacement, category. TAVR—as opposed to SAVR, which is Surgical Aortic Valve Replacement, which is generally a type of open-heart surgery—is a fairly recent technological advancement, with the first human procedure occurring in 2002; the first market approval in Europe in 2007; and US approval in 2011. We view TAVR, which replaces a heart valve using a small incision, usually in a patient’s leg, as clearly superior to traditional open-heart surgery, with similar Read more...
David Rolfe Comments on Tractor Supply Guru stock highlight
Tractor Supply (NASDAQ:TSCO) was one of the largest detractors from our first quarter performance, as the stock retraced some of the gains it had posted after we purchased it last quarter. We think a large portion of both the Q4 spike and the Q1 decline in the stock can be attributed to political and energy-related noise, with the stock correctly viewed as a potential beneficiary from a possible reduction in U.S. corporate tax rates and a recovery in U.S. energy production. On the tax front, the Company’s business is entirely U.S.-based, leaving it with a relatively high tax rate in comparison to companies with multinational operations; this means that it would be a greater relative beneficiary than these other companies if the U.S. corporate tax rate were to decline. As the market quickly moved from optimism to pessimism on the potential for such a tax cut, the stock moved accordingly. Our stance is that we would be perfectly happy to see a lower tax rate for Tractor Supply, but that is not a tenet of our long-term thesis. On the energy front, we estimate a minority of TSCO’s end-markets are in regions exposed to the fortunes Read more...
David Rolfe Comments on Mead Johnson Guru stock highlight
During the quarter, we liquidated our position in Mead Johnson (NYSE:MJN) after we determined the growth and competitive positioning of the business would be challenged for the next several years. In addition, the Company reached an agreement to be acquired by the European CPG firm, Reckitt Benckiser. A substantial portion of Mead Johnson’s growth in revenues and profits is derived from China, where a confluence of factors over the past few years have blunted the Company’s competitive advantage. First, the barriers to entry for Mead’s competition in China have fallen. While Mead has a well-established position in China’s traditional distribution channels, the Country’s emerging e-commerce channel has facilitated a booming “gray” market with Europe, where the Company has very little presence. Mead’s competitors in Europe have a much stronger value proposition than Chinese-based competitors. Second, China has become much less hospitable from a competitive standpoint. The rules and regulations that the NDRC (National Development and Reform Commission) have erected to prevent gray market expansion were, ostensibly, put Read more...
David Rolfe Comments on Amazon Guru stock highlight
We certainly follow Amazon (NASDAQ:AMZN) with great interest, and have owned shares in the past, however we struggle to understand how its $470 billion enterprise value can be justified by future profitability – let alone current profits, at just $2.6 billion trailing 12-month net income. Looking at comparably sized businesses, for example, Apple, first eclipsed $470 billion enterprise value in the midst of generating $40 billion in GAAP net income over a 12-month period (fiscal 2012) and went on to post another $220 billion in cumulative GAAP net income, since. Alphabet, also a portfolio holding, only recently eclipsed $470 billion EV in 2015, in the middle of $16 billion in bottom-line value creation, and then posted another nearly $20 billion in GAAP income, a year later. Clearly, Apple and Alphabet are both growing businesses that have substantial, and consistent profit generating value propositions.3 In addition, and more importantly, the reinvestment requirements Read more...
» More David Rolfe Articles

Commentaries and Stories

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7 Quality Stocks in Gurus' Portfolios Dollar Tree, Dorman Products top the list Chase Coleman,David Rolfe - 7 Quality Stocks In Gurus' Portfolios
According to the GuruFocus All-in-One Screener, the following stocks have high business predictability ratings and positive total returns since the beginning of the year. More...

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David Rolfe Comments on Visa Guru stock highlight
Visa (NYSE:V) is a marvel – an incredible cash-generating machine. Visa was one of our top performers in the fourth quarter and for the full year. The multiyear tailwind of the global transition away from cash transactions continues unabated, driving solid double-digit growth in payment volumes, transactions, revenues and earnings throughout the year. As of the end of the September quarter, Visa estimates that after all of these years only roughly 10% of global payment volumes are paid by card; with cash, check, and ACH still making up the overwhelming majority of transactions. We continue to expect Visa to benefit as electronic payments take share throughout the world and increase their penetration in all forms of transactions, from Personal Consumption (where cards have a relatively higher, but still small, share than in other forms of payment) to the significantly underpenetrated areas of Business-to-Business, Person-to-Person, and Business-to-Consumer. More...

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David Rolfe Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW) continues to execute on their differentiated strategy of providing low-cost financial services to mass affluent customers and advisors in the U.S. The Company continued to generate excellent and expanding pre-tax profit margins, relative to its large captive and independent competitors, despite aggressively lowering trading commissions earlier in the year, and launching low -cost index mutual funds in the most recent quarter. As Schwab attracts more assets to its banking and brokerage platforms, the Company’s overhead expense as a percentage of platform assets continues declining to what we calculate to be roughly 15 basis points per dollar of assets (trailing four quarters through the end of September). This overhead expense compares to the nearly 150 basis points of net interest margin available to the Company on almost $70 billion of client assets that they plan on transferring from money markets to the banking subsidiary over the next three years. Combined with a dramatically lower tax rate for the foreseeable future, we think Schwab has a unique opportunity to substantially grow its earnings base over the next several years. More...

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David Rolfe Comments on Priceline Guru stock highlight
Priceline (NASDAQ:PCLN) More...

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David Rolfe Comments on Kraft Heinz Guru stock highlight
Kraft Heinz (NASDAQ:KHC) More...

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David Rolfe Comments on Celgene Guru stock highlight
Celgene (NASDAQ:CELG) More...

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David Rolfe Comments on Apple Inc. Guru stock highlight
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Wedgewood Partners 4th Quarter 2017 Client Letter - The Great Bull Market of 2009-2018: The Greatest I am the Greatest of All Time … I’m fast … I can’t possibly be beat … I’m pretty … I shook up the World! -- Muhammad Ali David Rolfe - Wedgewood Partners 4th Quarter 2017 Client Letter - The Great Bull Market Of 2009-2018: The Greatest
Review and Outlook More...

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6 Negative Assets in Gurus' Portfolios DaVita, Masimo among companies with falling stock prices and returns David Rolfe,NWQ Managers,Ron Baron,Diamond Hill Ca - 6 Negative Assets In Gurus' Portfolios
While gurus hold positions in these companies, the stock prices and returns continue to fall. These are the worst-performing stocks over the past three months with a long-term presence in more than four gurus’ portfolios. More...

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David Rolfe Comments on Ross Stores Guru stock highlight
Both TJX Companies and Ross Stores have a very deliberate brick and mortar footprint. In fact, Ross has stated on public investor calls that they have no plans to pursue an e-commerce format. Their model, which we believe to be one of their competitive advantages, is successful despite the misconception that e-commerce means the end of all brick and mortar. Ross management has explained how the transaction economics of the shopping experience Ross provides simply would not work online. 90% of their product are priced under $30, with the average unit retail closer to $10. With online retail, product return rates are substantially higher than for in-store purchases. In addition, by the time products are returned, they are potentially out of season. Add on to this the fact that these online sales are likely being offered with free shipping. The culmination of all of these factors, means that providing the value experience Ross offers would not be sustainable in an e -commerce format. To be profitable, online retail pricing is much more in line with that of department stores. This allows Ross to offer the same value proposition – delivering more for More...

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David Rolfe Comments on Verisk Analytics Guru stock highlight
Verisk Analytics (NASDAQ:VRSK) has been in portfolios since 2011, as the Company continues to serve a critical function in the property and casualty insurance value chain, providing many of the top 100 insurance customers in the US with proprietary risk data, compliance and analytical services. We estimate the Company generates over 70% of its revenues from this industry vertical, and is organically growing these revenues at a mid to high single digit, much faster than the underlying industry growth, which clocks in at a low single digit. As Verisk is able to scale its solutions across many customers, we expect margins to continue expanding and help drive a healthy double-digit earnings growth trajectory for the Company.While the insurance industry is far from “hyper-growth,” we think it nevertheless represents a stable base where Verisk can add significant incremental value as it aggressively reinvests in innovative ways for customers to get an edge. For example, the Company recently invested in a sophisticated More...

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David Rolfe Comments on TreeHouse Guru stock highlight
After a relatively short holding period of just 12 months, we sold our TreeHouse (NYSE:THS) position. After the acquisition of the Private Brands business from ConAgra in November of 2015, the Company became by far the largest manufacturer and distributor of private label grocery products in the U.S. With notable size and scale through unmatched scale in both manufacturing and distribution, we believed TreeHouse would significantly benefit from the secular shift toward private label, particularly in higher margin natural and organic segments, while driving out costs in lower growth segments. Specifically, the shift toward private label brands was one of the rare growth opportunities in the increasingly cut-throat battles in nearly every aisle of the grocery store business. We see private brands all around us in our local family-owned grocery stores and in the big national chain stores, as well as food retailers that are uniquely private label – Whole Foods, Trader Joe’s, Aldi, and Costco.Our investment thesis More...

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David Rolfe Comments on Tractor Supply Guru stock highlight
We have continued to add to our position in Tractor Supply (NASDAQ:TSCO), which was one of our top contributors in the third quarter. Over time, we have noticed that whenever we see unseasonable weather cause weakness in retail, the cries of “Amazon, Amazon, Amazon!” get louder for a period of time. As we have stated before, Amazon’s retail business has been wildly successful in building revenues (if not profits or returns on capital) over the past 20 years, and this has led them to a low-single-digit share of U.S. retail. However, the U.S. retail market is a monstrous, and growing, multi-trillion-dollar opportunity, which leaves trillions of dollars (and growing) of addressable market for everyone who is not Amazon.As this relates to Tractor Supply, specifically, we believe that the Company has spent most of its history differentiating itself from imposing competition. Their strategy to remain relevant to their customers in the face of Amazon is a natural More...

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David Rolfe Comments on PayPal Holdings Guru stock highlight
PayPal Holdings (NASDAQ:PYPL) was a top contributor to relative performance during the third quarter. The Company’s constant currency revenue growth, operating earnings and earnings per share continue to grow at high-teens rates as their core payment services gain relevance with a growing base of more than 15 million merchants and over 200 million users. We think PayPal’s large-scale, two-sided platform is a unique value proposition to the payments industry where competitors typically focus on either merchants or customers, but rarely integrate both at scale. PayPal’s traction with users and merchants proliferated during its decade-and-a-half tenure under the eBay umbrella, concomitant to the rise of the e-commerce sales channel. The core value proposition of PayPal – then and now – is its ability to offer a turn-key payments platform that includes payment acceptance, processing, fraud detection, and an increasing array of financial services traditionally offered by banks, to merchants of any size, particularly small and mid-sized merchants. More...

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David Rolfe Comments on Qualcomm Guru stock highlight
Qualcomm (NASDAQ:QCOM)’s stock continues to be stuck in lawsuit purgatory. Ironies abound. A judge says Apple doesn’t have to pay Qualcomm, even though Apple admits they owe Qualcomm at least $4 per phone. The FTC says Qualcomm is violating antitrust, even though the head of the FTC admits Qualcomm isn’t violating anti-trust. Both Companies have been quite public in their respective legal positions. Apple is adamant about letting a judge decide on a fair price (or royalty rate) from them to pay for Qualcomm’s technology. Qualcomm is just as adamant that they will once again go to great lengths to defend what they believe is a fair market price for their technology. The public posturing from Apple’s CEO Cook seems to imply that Apple is in no hurry to reach an out-of-court settlement. Qualcomm’s CEO Mollenkopf continues to expect an out -of-court settlement.Our main position in holding the stock throughout this turmoil is that we cannot conceive that a U.S. court (judge) would rule that a U.S. company’s More...

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David Rolfe Comments on Fastenal Guru stock highlight
Since we first bought Fastenal (NASDAQ:FAST) at the end of October last year, the U.S. manufacturing and energy industries have transitioned from approximately two years of recessionary conditions to a healthy recovery, driven in large part by a rebound in U.S. energy production. In fact, we note that the Institute for Supply Management’s Purchasing Managers Index – a widely-used gauge of manufacturing activity – just hit a 6-year high in September, with the component of the index representing actual production hitting its highest level in 13 years. Fastenal’s own results have moved from declining revenues and operating margins to double-digit percentage revenue growth and improving operating margins.Aside from an aggressive run in the stock for a brief period after the U.S. presidential election, Fastenal’s stock has barely noticed the significant recovery in both the end markets and the Company’s results, leaving valuations still near 2009’s recessionary lows. Persistent noise about potential disruption More...

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David Rolfe Comments on Cognizant Guru stock highlight
Cognizant (NASDAQ:CTSH) has been a strong performer throughout the year. In 2016 it proved to be a bit sluggish, particularly when the strong and steady revenue growth typically reported by the Company experienced headwinds in multiple business segments. In their Financial Services segment, 2016 was marked by large money center bank customers spending more cautiously due to the low interest rate environment. Political uncertainty in the U.S. during the election year also impacted spending by their customers. While these large banks continue to take a conservative approach to spending, management has noted some stability in the banking sector relative to last year.Recall that when we last wrote on Cognizant's performance (about a year ago) we mentioned four Cognizant clients in the HMO industry were all attempting to merge with or acquire each other. This M&A activity caused these clients to pause their project spending until the mergers were either finalized or abandoned. It did not help that these large industry More...

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David Rolfe Comments on Alphabet Guru stock highlight
Alphabet (NASDAQ:GOOGL) has been in portfolios continuously since 2007, as the Company has invested in and developed more than a half-dozen digital content platforms, each with over 1 billion monthly users, to form the backbone of what is now the largest advertising franchise in the world. The Company continues to extend its lead, evidenced in its over 20% constant currency revenue growth for the June quarter, while generating 15% adjusted operating income growth. While traffic acquisition costs (TAC) to Google properties rose during the past few quarters, historically the Company has not managed margin trends as closely as they have revenue growth, and we would expect TAC growth to moderate over the next several quarters.Alphabet continues to carry one of the strongest balance sheets in Corporate America, with nearly $100 billion in net cash and investments, a byproduct of the Company’s attractive profitability profile, which is on pace to generate $25 billion per year in free cash flow, along with a de More...

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David Rolfe's 3rd Quarter 2017 Shareholder Commentary Discussion of holdings and market David Rolfe - David Rolfe's 3rd Quarter 2017 Shareholder Commentary
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Cheap Stocks That Pay High Dividend Yields Mannatech, Manning & Napier top the list Charles Brandes,David Rolfe - Cheap Stocks That Pay High Dividend Yields
According to GuruFocus' All-In-One Screener, the following stocks have high dividend yields but performed poorly over the past 12 months. More...

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