Ruane Cunniff

Ruane Cunniff

Last Update: 05-12-2017

Number of Stocks: 88
Number of New Stocks: 9

Total Value: $10,602 Mil
Q/Q Turnover: 10%

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

Ruane Cunniff Watch

  • Ruane, Cunniff & Goldfarb 1st Quarter Commentary 2017

    Dear Shareholder:

      


  • Ruane Cunniff Sells Berkshire and Praxair, Exits Walmart

    Ruane, Cunniff & Goldfarb Inc. was founded by William Ruane, and Ruane Cunniff (TradesPortfolio)'s current investment committee is directed by Richard Cunniff. He manages a portfolio composed of 92 stocks with a total value of $10.642 billion. During the fourth quarter the guru sold shares in the following stocks:


    The guru reduced its holding in Berkshire Hathaway Inc. Class A (BRK.A) by 19.71% with an impact of -2.39% on the portfolio.

      


  • Valeant Pharmaceuticals Is a Potential Sell

    Valeant Pharmaceuticals Inc. (NYSE:VRX) reported a net loss of $515 million during fourth-quarter 2016 based on generally accepted accounting principles and an adjusted EBITDA of $1.05 billion. For full-year 2016, the company reported a GAAP net loss of $2.4 billion, which translates to a loss per share of approximately $6.94. These values suggest that Valeant has a weakening financial outlook for 2017.


    Brief summary of earnings report

      


  • David Rolfe Invests in Tractor Supply, Fastenal

    Wedgewood Partners’ David Rolfe (Trades, Portfolio) gained two new holdings and divested another in the final quarter of 2016. He established positions in Tractor Supply Co. (NASDAQ:TSCO) and Fastenal Co. (NASDAQ:FAST). He sold out of Stericycle Inc. (NASDAQ:SRCL).


    With over 29 years of portfolio management experience, Rolfe serves as the chief investment officer at Wedgewood. The firm believes significant long-term wealth is created by investing as “owners” in a company. Wedgewood seeks highly profitable companies that offer a dominant product or service, consistently grow earnings, revenues and dividends and have strong management teams that prioritize shareholders. The current portfolio is composed of 36 stocks and is valued at around $4.1 million.

      


  • Ruane Cunniff Comments on Liberty Media

    At the very end of the year, we found what we believe will be another good use for our dry powder when we joined a select group of investors in purchasing a stake in Liberty Media Group, a John Malone-affiliated company, as part of Liberty’s acquisition of the Formula One auto racing business. The deal closed on January 23, and Sequoia purchased 4.7 million shares at a discounted price of $25 per share.

    Recently, Liberty Media (NYSE:BATRR) has traded above our cost basis in the public market. Sequoia’s allocation will be restricted for several months, meaning we won’t be able to sell the shares. During that time, accounting rules require us to price the stock at a modest discount to its market price to reflect its illiquidity. Undoubtedly, the share price will fluctuate during the lock-up period, but we’re delighted to have acquired shares at what we believe is an attractive price. More importantly, we believe Formula One is a powerful global brand and Liberty will be an excellent manager. Our expectation is to own the shares for years.

    Formula One is the leading global automotive sport with an estimated 400 million fans around the world. While Formula One has grown considerably under the leadership of Bernie Ecclestone over the last three decades, we believe new management has significant opportunities to further improve and grow the sport. Liberty Chairman John Malone and CEO Greg Maffei have exceptional track records as capital allocators and value creators, and we believe they have found a superb manager in Chase Carey to run Formula One. Mr. Carey had successful tenures at Fox Broadcasting, DirecTV, News Corp. and 21st Century Fox and has particular expertise in sports businesses. We believe there is room to improve revenue from broadcast, advertising and sponsorship sources, while also developing a digital business that captures younger fans. Importantly, our return assumptions do not depend on the sport succeeding in immature markets such as the US and China.



    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane Cunniff Comments on Amazon

    In the fall, we exited our small position in Walmart and replaced it with a similarly small position in Amazon (NASDAQ:AMZN). The company’s e-commerce operation (Amazon.com) and its cloud computing platform (Amazon Web Services) are two of the most advantaged businesses we’ve analyzed in quite some time. Both are growing fast and have miles of runway ahead of them. And they are run by arguably the most talented, customer-focused and long term-oriented businessman of his generation.

    At a consolidated level, Amazon produces very little in the way of reported profits. Amazon Web Services, whose financials are disclosed separately, earns very rich margins, but the larger e-commerce business reports scant earnings. Our research indicates that the company’s e-commerce business has substantial earnings power that is being masked by a variety of ambitious growth investments. The Fund purchased shares at what we believe to be a reasonable multiple of underlying earnings power excluding those investments. Estimating the long-term potential of Amazon’s many investments is an inherently imprecise exercise, which is why the investment thus far has been a small one.


    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane Cunniff Comments on Chipotle

    Chipotle (NYSE:CMG) has been a weak performer, down 13% since purchase through the end of 2016. We knew Chipotle faced a long road to recovery after several outbreaks of food-borne illnesses frightened customers away, but we were attracted by the enormous potential of the business, which could grow for many years and generate high returns if the executive team manages the recovery adeptly. Chipotle is making changes to management and its board of directors, including adding a director who played a key role in the turnaround at McDonald’s a decade ago. Recently reported sales figures for December showed encouraging gains in customer traffic, but we are watching carefully, as the pace of recovery thus far has fallen short of our initial expectations.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund 4th quarter shareholder letter.
      


  • Ruane, Cunniff & Goldfarb's Sequoia Fund 4th Quarter Shareholder Letter

    Dear Shareholder:

      


  • O’Reilly Automotive: Does Debt Diminish Its Value Stock Status?

    O’Reilly Automotive Inc. (NASDAQ:ORLY) currently holds a spot on the Undervalued Predictable screener list at GuruFocus due to a couple of recent dips in the share price:


    ORLY 3 month share price

      


  • John Rogers Boosts Berkshire, Rockwell Collins, Tiffany

    John Rogers (Trades, Portfolio) founded Ariel Investment LLC in 1983, and the firm now has a total value of $8.267 billion. During the third quarter the guru’s largest buys were the following:


    The investor raised his position in Berkshire Hathaway Inc. Class B (BRK.B) by 151.06% with an impact of 0.44% on the portfolio.

      


  • 21 Questions for Bluegrass Capital's Founder

    Thank you for your interest in me. I am a longtime follower of your site and hope my responses prove useful to at least a few of your readers. I look forward to other interviews in this series.


    19. Describe some of the biggest mistakes you have made value investing. What are your three worst investments? What did you learn and how do you avoid those mistakes today?

      


  • Ruane Cunniff Makes One Significant Buy

    On Tuesday, Ruane Cunniff (Trades, Portfolio) disclosed its first quarterly update since losing significantly on a position in Valeant Pharmaceuticals (NYSE:VRX), a fast-growing drug maker accused of price gouging and a dubious relationship with a pharmacy. The firm’s Sequoia Fund made only one large purchase during the third quarter, Dentsply Sirona (NASDAQ:XRAY).


    Sequoia owned Sirona, the original company, since 2011, according to its third-quarter letter. Sirona, a dental products maker, merged with Dentsply, a dental consumables company, in February to create the world’s largest professional dental company, supplying to labs, dental offices and clinics worldwide. Dentsply Sirona has a global headquarters in York, Pennsylvania, international headquarters in Salzburg, Austria, and a market cap of $13.44 billion.

      


  • Ruane Cunniff Comments on Wells Fargo

    We did not add to or reduce our 2% position in Wells Fargo (NYSE:WFC) during the quarter, but recent events prompt us to share our thoughts on the bank with you. News emerged in September that since 2011, Wells Fargo employees had created up to 2.1 million sham customer accounts in order to meet aggressive sales quotas set by bank management. While this behavior caused the bank to fire some 5,300 employees over a period of five years, the bank was distressingly slow to change the incentives that prompted this bad behavior. We believe that Wells management has damaged the bond of trust the bank had built with its customers, and that senior executives should be held accountable for the practices their policies engendered. That said, it is important to note that only about 5% of the unauthorized accounts had fees associated with them—and that these fees came to about $2.6 million in total. Wells Fargo is an enormous enterprise, with 93 million customer accounts and $22.4 billion of net income in the past year. The sham accounts did not make money for Wells, and more likely cost it money as the bank paid bonuses to employees who opened inactive accounts. Wells has suffered deep reputational damage and we will keep a watchful eye on the remedies proposed by management, but we believe Wells remains an attractive franchise with a low valuation.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund third quarter 2016 letter to shareholders.  


  • Ruane Cunniff Comments on Walmart

    We reduced our holding in Walmart (NYSE:WMT) during the quarter, and exited the stock in early October. Over our 11-year holding period, Walmart generated a positive total shareholder return but modestly underperformed the S&P 500 Index. Walmart remains a formidable company, but over the past decade its dominance has waned. International expansion has never generated good returns for shareholders, while Walmart has struggled to develop a winning e-commerce strategy. We think higher wages for its entry level workers, continued growth at Amazon and the need to invest heavily in e-commerce will put pressure on Walmart’s earnings over the next few years.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund third quarter 2016 letter to shareholders.  


  • Ruane Cunniff Comments on Trimble Navigation

    We sold our few shares of Trimble Navigation (NASDAQ:TRMB). While Trimble is an interesting business, it has diversified away from its core GPS offerings for agricultural and construction machinery into a host of new areas, few of which have borne fruit. As Trimble amounted to less than 1% of the Fund’s holdings and we weren’t excited about its diversification efforts, we exited. Over our six-year holding period, Trimble generated a positive return but underperformed the Index.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund third quarter 2016 letter to shareholders.  


  • Ruane Cunniff Comments on Dentsply Sirona

    After a busy second quarter in terms of portfolio activity, the third quarter was far quieter. Our only significant purchase was of the dental supply leader Dentsply Sirona (NASDAQ:XRAY). We’ve owned predecessor company Sirona since 2011, and it has been an excellent performer. Our original investment thesis was based on Sirona’s leadership in digital dentistry. Sirona is strong in digital equipment, and its product line includes CEREC, an incredibly innovative and useful CAD/CAM system that allows dentists to design and mill crowns in their offices during the course of a single patient visit. The merger brings together the highest-tech maker of dental equipment (Sirona) with the largest maker of dental consumables (Dentsply), creating the industry’s largest global supplier. It is our belief that Dentsply Sirona is in a unique position to create and sell new value-added solutions in both equipment and consumables over the years ahead. In addition, we think CEO Jeff Slovin is the right person to drive the combined organization toward a world-class level of performance.

    From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund third quarter 2016 letter to shareholders.  


  • Sequoia Fund 3rd Quarter Update, Says Wells Fargo 'Attractive'

    Dear Clients and Shareholders:


    The third quarter of 2016 was characterized by a return to normalcy after a tumultuous first half. The Sequoia Fund returned 3.56% vs. a 3.85% return for the S&P 500 Index1. At quarter’s end our cash position stood at 10.2%, reflecting the relatively full valuations we find in the marketplace.

      


  • PRIMECAP Adds to Trimble, NN Inc.

    PRIMECAP Management (Trades, Portfolio) added to its positions in Trimble Inc. (NASDAQ:TRMB) and NN Inc. (NASDAQ:NNBR) on Sept. 30.


    PRIMECAP was founded in 1983 by Howard Schow, Mitchell Milias and Theo Kolokotrones in Pasadena, California. The firm manages multiple funds and evaluates securities based on their three- to five-year outlook.

      


  • Gurus Exit Inefficient Packaged Foods Industry

    Throughout the second quarter, gurus trimmed or eliminated their positions in packaged foods companies. Such companies, like Kellogg Co. (NYSE:K) and Leucadia Corp. (NYSE:LUK), have increasing days sales outstanding and contracting profit margins. This leads to decreased value opportunities in the packaged foods industry.


    Which industries inefficiently operate receivables, payables and inventory?

      


  • Ruane Cunniff Cuts Allergan, Berkshire, IBM

    Ruane Cunniff (Trades, Portfolio) is a value investor focused on the intrinsic value of business. It manages a portfolio composed of 118 stocks with a total value of $10.499 billion. During the second quarter the guru traded the following stocks.


    The investor reduced shares in Berkshire Hathaway Inc. Class A (BRK.A) by 19.52% with an impact of -2.78% on the portfolio.

      


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