David Rolfe

David Rolfe

Last Update: 05-15-2018

Number of Stocks: 34
Number of New Stocks: 1

Total Value: $2,174 Mil
Q/Q Turnover: 7%

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 (%)
201720.4221.71-1.3
20164.5411.99-7.4
2015-6.491.24-7.7
3-Year Cumulative17.7 (5.6%/year)38 (11.3%/year)-20.3 (-5.7%/year)
20149.213.47-4.3
201329.8632.3-2.4
5-Year Cumulative66.9 (10.8%/year)107.2 (15.7%/year)-40.3 (-4.9%/year)
201221.7515.995.8
20115.611.93.7
201014.515.05-0.6
200960.8326.3534.5
2008-38.12-36.79-1.3
10-Year Cumulative144.6 (9.4%/year)125 (8.4%/year)19.6 (1%/year)
200715.045.149.9
2006-2.7715.85-18.6
20055.844.831.0
20049.6110.7-1.1
200342.2528.1914.1
15-Year Cumulative351.5 (10.6%/year)307.7 (9.8%/year)43.8 (0.8%/year)
2002-20.42-21.581.2
2001-7.72-11.764.0
2000-10.31-9.75-0.6
199956.9920.436.6
199849.628.720.9
20-Year Cumulative598.4 (10.2%/year)294.5 (7.1%/year)303.9 (3.1%/year)
199721.133.47-12.4
199623.5722.491.1
199542.5938.044.5
19943.780.43.4
1993-6.2110.08-16.3
25-Year Cumulative1350.5 (11.3%/year)883.9 (9.6%/year)466.6 (1.7%/year)

Top Ranked Articles

David Rolfe Is Taking Investing Questions From GuruFocus Users Get an answer to your investing question from a pro
Portfolio manager David Rolfe (Trades, Portfolio) is taking GuruFocus reader questions now. Read more...
David Rolfe Comments on Berkshire Hathaway Guru stock highlight
Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) was a detractor from performance during the quarter. We chalk up the stock’s pullback as nothing more than a much-deserved rest from the stocks significant outperformance since the end of 2015 versus the benchmark and the S&P 500 Index. Read more...
David Rolfe Comments on Facebook Guru stock highlight
We have followed Facebook (NASDAQ:FB) for quite some time, first as a potential competitor to Alphabet (formerly Google) and more recently (the past few years) as an investment opportunity. Facebook has historically carried a rich multiple relative to what we are willing to tolerate for earnings growth. However, earnings growth has continued at a robust pace while the stock has not kept up. For example, from year-end 2015 through year-end 2018 (estimated), Facebook will have compounded revenue and earnings by over 200%, whereas the stock has appreciated by about 75%3. This has driven Facebook’s earnings multiple to contract to around 16-17X 2019 earnings (ex. balance sheet cash) – an all-time low for the stock, both absolute and relative to the S&P 500 Index and Russell 1000 Growth Index (n.b. P/E is at parity with the latter). We believe this is a classic valuation setup for our portfolio: as the Company continues to compound earnings at 20%+ for several years, a conservative, flat multiple should still result in excellent absolute returns – and better still at deserved multiple expansion. Read more...
David Rolfe Comments on Celgene Guru stock highlight
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 Read more...
» More David Rolfe Articles

Commentaries and Stories

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David Rolfe Comments on Fastenal Guru stock highlight
We trimmed our position in Fastenal (NASDAQ:FAST) this quarter, and we also note that it was one of our biggest detractors from performance. As we have highlighted before, we have seen a significant recovery in both the U.S. manufacturing and energy industries, as well as a recovery in Fastenal’s fundamental results, since we first purchased the stock in October 2016. More...

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David Rolfe Comments on Cognizant Guru stock highlight
Cognizant (NASDAQ:CTSH) detracted from absolute as well as relative performance in the quarter. After being a strong performer during both the second half of 2017 and the first quarter this year, Cognizant gave some of that relative performance back after reporting earnings that disappointed analysts. While the report was in line with consensus expectations, management did reduce full year 2018 earnings per share (EPS) estimates to reflect a higher tax rate following the U.S. Tax Cuts and Jobs Act enacted last year. Essentially, management now has better clarity around calculation of certain income earned for American taxpayers involved in foreign businesses which ultimately provides a limit on the amount of foreign tax credits the Company receives. While this was not clear when management gave original guidance in February, the Company now has a better understanding of the impact, resulting in the reduced EPS guidance. We are not concerned with the release because the change reflects the updated tax-rate expectations, rather than an issue with Company execution or a decline in industry or market expectations. Consensus, however, More...

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Rating: 5.0/5 (1 vote)

David Rolfe Comments on Berkshire Hathaway Guru stock highlight
Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) was a detractor from performance during the quarter. We chalk up the stock’s pullback as nothing more than a much-deserved rest from the stocks significant outperformance since the end of 2015 versus the benchmark and the S&P 500 Index. More...

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David Rolfe Comments on Celgene Guru stock highlight
Celgene (NASDAQ:CELG) was once again a top detractor during the quarter. We chronicled the recent pipeline disappointments and earnings guidance declines in our third quarter Client Letter back in October. We recognize that the Company needs to regain investor confidence. To that end, we continue to reiterate that the Company has a very broad pipeline, with 12 phase-III studies set to read out between now and the end of 2018. Celgene has substantially more phase III assets than any other biotech company. With nearly +20% compounded annual earnings growth through 2020 and free cash flow generation of $100 billion over the next ten years, Celgene continues to offer a compelling growth opportunity. More...

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David Rolfe's Wedgewood Partners 2nd-Quarter 2018 Client Letter When the Punchbowl is spiked with debt David Rolfe - David Rolfe's Wedgewood Partners 2nd-Quarter 2018 Client Letter
You Never Give Me Your Money. You Only Give Me Your Funny Paper. More...

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Rating: 5.0/5 (3 votes)

David Rolfe Is Taking Investing Questions From GuruFocus Users Get an answer to your investing question from a pro David Rolfe - David Rolfe Is Taking Investing Questions From GuruFocus Users
Portfolio manager David Rolfe (Trades, Portfolio) is taking GuruFocus reader questions now. More...

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David Rolfe's Trades in the 1st Quarter The guru threw support to Facebook and exited a position in Pepsi, expanded Apple and reduced Berkshire Hathaway David Rolfe - David Rolfe's Trades In The 1st Quarter
David Rolfe (Trades, Portfolio), known for his business acumen and eye for quality stocks, disclosed this week a series of trades he executed in the first quarter. More...

EARNINGS, SOCIAL MEDIA GIANT, PAYPAL, HEADLINE RISK,


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David Rolfe Welcomes Volatility and Expects More A discussion of Wedgewood Partners' 1st-quarter 2018 letter David Rolfe - David Rolfe Welcomes Volatility And Expects More
David Rolfe (Trades, Portfolio) of Wedgewood Partners just published a quarterly letter, and it fits perfectly well within the current standard value investor narrative where they like the return of volatility but fear a market reckoning: More...

LONG, MARKET, CRASH,


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David Rolfe Comments on Qualcomm Guru stock highlight
Qualcomm (NASDAQ:QCOM) was a top detractor during the first quarter. Shares retreated after President Trump issued an order to block any attempt by Broadcom to acquire Qualcomm shares or stage a proxy contest, per research from the Committee on Foreign Investment in the United States (CIFIUS). As best as we can tell, given the limited public disclosures, CFIUS speculated that any change in control from Qualcomm to Broadcom could pose a risk to the national security of the United States. Specifically, CFIUS claimed that Qualcomm’s research and development (R&D) efforts were critical to the U.S.’ leadership in the development of global wireless communications standards, and worried that any efforts by Broadcom to defund that R&D risked a “reduction in Qualcomm’s long-term technological competitiveness and 17 influence in standard setting [which] would significantly impact U.S. national security,” especially vis a vis China.5 More...

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Rating: 4.0/5 (1 vote)

David Rolfe Comments on Facebook Guru stock highlight
We have followed Facebook (NASDAQ:FB) for quite some time, first as a potential competitor to Alphabet (formerly Google) and more recently (the past few years) as an investment opportunity. Facebook has historically carried a rich multiple relative to what we are willing to tolerate for earnings growth. However, earnings growth has continued at a robust pace while the stock has not kept up. For example, from year-end 2015 through year-end 2018 (estimated), Facebook will have compounded revenue and earnings by over 200%, whereas the stock has appreciated by about 75%3. This has driven Facebook’s earnings multiple to contract to around 16-17X 2019 earnings (ex. balance sheet cash) – an all-time low for the stock, both absolute and relative to the S&P 500 Index and Russell 1000 Growth Index (n.b. P/E is at parity with the latter). We believe this is a classic valuation setup for our portfolio: as the Company continues to compound earnings at 20%+ for several years, a conservative, flat multiple should still result in excellent absolute returns – and better still at deserved multiple expansion. More...

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Rating: 0.0/5 (0 votes)

David Rolfe Comments on Edwards Lifesciences Guru stock highlight
Edwards Lifesciences (NYSE:EW) was our top contributor in the first quarter. Honestly, we couldn’t be much more pleased with the way fundamental developments have played out during our ownership of the Company. As you know from our earlier commentary, the primary driver for the Company is Transcatheter Aortic Valve Replacement (TAVR), where the Company has a significant market leadership position. As a reminder, TAVR is a much less invasive alternative to open-heart surgery for the replacement of the aortic valve, in which the new valve is put into place through a catheter, typically inserted via a tiny pinprick in a patient’s leg. The aortic valve is generally replaced due to a condition known as Aortic Stenosis (AS), which is a narrowing of the valve, which restricts blood flow within the heart. TAVR has seen successive waves of growth as the procedure has been approved first for patients for whom surgery was not a viable option, then for patients at high- and medium-risk of complications from surgery. The Company is also working on approvals for low-risk patients and for patients currently showing no symptoms of AS. Our research has led us to believe, from the beginning, that the More...

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David Rolfe Comments on Tractor Supply Company Guru stock highlight
Tractor Supply Company (NASDAQ:TSCO) posted solid same-store sales (“comp”) growth of 4%, topping consensus expectations. Despite providing good comp guidance for the coming year, and a longer-term plan for operating margin expansion, investors ignored this and shifted their gaze to the Company’s lower near-term operating margin guidance. We think the recent selloff is overdone. Lower margins are being driven by investments in distribution and personnel capabilities, which were telegraphed a few quarters ago; and therefore they are not new developments. We continue to think the reinvestment of excess capital into new productive assets and workflows will result in sustainable longer-term sales and operating leverage. Further, gross margins continue to be steady, leaving little sign that there has been a meaningful change in competitive encroachment. For example, we think many of the Company’s most popular consumable, usable, and edible (CUE) items do not lend themselves well to fulfillment by the U.S. Postal Service; instead they’d do well to leverage More...

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David Rolfe Comments on T.J. Maxx Guru stock highlight
We liquidated our positions in T.J. Maxx (NYSE:TJX) and used the proceeds to add to faster growing businesses. The Company continues to be exceedingly well-run and has pioneered many new concepts in the off-price retail industry and managed to expand the concept internationally, where price umbrellas have emerged. However, there are few markets where that off-price opportunity is better than in the U.S. We think T.J. Maxx is further along the maturity curve in the U.S., relative to another portfolio holding, Ross Stores, which also competes well within the off-price space. Ross continues to have ample room to grow its footprint in the highly lucrative off-price space through core concept expansion and potential entry into new, relatively underpenetrated retail segments, particularly in home. More...

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David Rolfe Comments on Verisk Analytics Guru stock highlight
During the quarter we liquidated our positions in Verisk Analytics (NASDAQ:VRSK). Over the past several years, Verisk has gone outside its core competency of serving the Insurance Industry, in an effort to drive continued revenue and earnings growth. Although the Company has executed well in the insurance vertical, we are less impressed with the execution of their acquisitions in the energy, health care, and financial verticals. Those verticals still represent a minority of their profitability (they exited health care in 2016); however, we think the returns to date have not justified the balance sheet risk the Company has taken and would prefer management return capital to shareholders, rather than growing for growth’s sake. We reinvested proceeds into better opportunities that were presented during the brief bouts of heightened volatility. More...

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David Rolfe: Wedgewood Partners 1st Quarter 2018 Client Letter Hello volatility, my old friend, I’ve come to talk with you again David Rolfe - David Rolfe: Wedgewood Partners 1st Quarter 2018 Client Letter
"I have never seen a market this volatile to this extent in my career…Now that’s only 66 years…I've seen two 50 percent declines, I've seen a 25 percent decline in one day and I’ve never seen anything like this before." John Bogle, Founder of The Vanguard Group More...

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David Rolfe Axes TreeHouse Foods, Exxon Mobil in 4th Quarter Wedgewood reports quarterly portfolio David Rolfe - David Rolfe Axes TreeHouse Foods, Exxon Mobil In 4th Quarter
David Rolfe (Trades, Portfolio), chief investment officer at Wedgewood Partners, released his fourth-quarter portfolio last week, disclosing he exited his positions in TreeHouse Foods Inc. (NYSE:THS) and Exxon Mobil Corp. (NYSE:XOM). More...

DAVID ROLFE, WEDGEWOOD, 4Q, 2017, SELLS


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5 Health Care Stocks in Gurus' Portfolios Gurus are buying these popular stocks David Rolfe,Ken Fisher - 5 Health Care Stocks In Gurus' Portfolios
According to the GuruFocus All-In-One Screener, the following health care stocks are popular among gurus. More...

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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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