The guru's St. Louis-based firm approaches potential investments with the mindset of a business owner, striving to generate significant long-term wealth by analyzing a handful of undervalued companies that have a dominant product or service, consistent earnings, revenue and dividend growth, are highly profitable and have strong management teams.
Keeping these considerations in mind, Rolfe’s 13F filing for the three months ended June 30 shows he entered three new positions, sold out of four stocks and added to or trimmed a number of other existing investments. The most significant trades included a boost to the PayPal Holdings Inc. (PYPL, Financial) position, reduced bets on Apple Inc. (AAPL, Financial), Meta Platforms Inc. (META, Financial) and Visa Inc. (V, Financial) and the divestment of First Republic Bank (FRCB, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
The investor increased the PayPal (PYPL, Financial) holding by 46.13%, picking up 152,432 shares. The transaction impacted the equity portfolio by 1.64%. The stock traded for an average price of $68.30 per share during the quarter.
Rolfe now holds 482,868 shares total, which occupy 5.19% of the equity portfolio. GuruFocus estimates he has gained 55.18% on the investment.
The San Jose, California-based fintech company, which facilitates online money transfers, has a $67.33 billion market cap; its shares were trading around $61.32 on Monday with a price-earnings ratio of 17.18, a price-book ratio of 3.44 and a price-sales ratio of 2.43.
The GF Value Line suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 93 out of 100, the GF Score indicates the company has high outperformance potential. While it received solid ratings for profitability, growth and momentum, the financial strength and value ranks are more moderate.
Of the gurus invested in PayPal, Ken Fisher (Trades, Portfolio) has the largest stake with 0.54% of its outstanding shares. PRIMECAP Management (Trades, Portfolio) and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also have notable holdings.
Rolfe trimmed the Apple (AAPL, Financial) position by 7.54%, selling 26,923 shares. The transaction had an impact of -0.75% on the equity portfolio. Shares traded for an average price of $174.10 each during the quarter.
The guru now holds a total of 329,962 shares, which make up 10.32% of the equity portfolio as the largest holding. GuruFocus data shows he has gained 84.13% on the investment so far.
The tech company headquartered in Cupertino, California, which produces iPhones, Mac computers and other consumer electronics, has a market cap of $2.81 trillion; its shares traded around $179.85 on Monday with a price-earnings ratio of 30.23, a price-book ratio of 46.71 and a price-sales ratio of 7.44.
According to the GF Value Line, the stock is fairly valued currently.
The GF Score of 93 indicates the company has high outperformance potential, driven by high ratings for four of the criteria as well as a low value rank.
With a 5.86% stake, Warren Buffett (Trades, Portfolio) is Apple’s largest guru shareholder. Other top guru investors include Fisher, the Harbor Capital Appreciation Fund (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Jeremy Grantham (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Tom Gayner (Trades, Portfolio) and Elfun Trusts (Trades, Portfolio).
The guru curbed the Meta Platforms (META, Financial) investment by 10.19%, selling 18,974 shares and impacting the equity portfolio by -0.68%. During the quarter, the stock traded for an average per-share price of $246.21.
Rolfe now holds 167,265 shares in total, representing the second-largest holding with a 7.74% weight. GuruFocus says he has gained around 11.84% on the investment to date.
The Menlo Park, California-based social media company formerly known as Facebook has a $743.75 billion market cap; its shares were trading around $289.04 on Monday with a price-earnings ratio of 33.69, a price-book ratio of 5.53 and a price-sales ratio of 6.35.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
Further, the GF Score of 90 indicates the company has good outperformance potential on the back of high ranks for profitability, growth, financial strength and value as well as a low momentum rating.
Chase Coleman (Trades, Portfolio) is Meta’s largest guru shareholder with a 0.33% stake. The stock is also being held by First Eagle Investment (Trades, Portfolio), Chris Davis (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Fisher, Dodge & Cox, Simons’ firm, Baillie Gifford (Trades, Portfolio) and many others.
Rolfe reduced the Visa (V, Financial) investment by 5.56%, or 10,393 shares. The transaction impacted the equity portfolio by -0.40%. The stock traded for an average price of $228.82 per share during the quarter.
The guru now holds 176,665 shares, accounting for 6.76% of the equity portfolio as the fourth-largest holding. GuruFocus found he has gained 117.56% on the long-held investment.
The credit services company headquartered in San Francisco has a market cap of $507.12 billion; its shares traded around $243.83 on Monday with a price-earnings ratio of 30.94, a price-book ratio of 13.59 and a price-sales ratio of 16.06.
The GF Value Line suggests the stock is modestly undervalued currently.
Supported by solid ratings across the board, the GF Score of 98 means the company has high outperformance potential.
Holding a 0.41% stake, Fisher is Visa’s largest guru shareholder. Buffett, Frank Sands (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Chuck Akre (Trades, Portfolio), PRIMECAP, Harbor Capital and a number of other gurus also have positions in the stock.
First Republic Bank
Impacting the equity portfolio by -0.48%, the investor sold his 201,834 remaining shares of First Republic Bank (FRCB, Financial). During the quarter, shares traded for an average price of $4.23 each.
GuruFocus estimates he lost 79.86% on the investment over its lifetime.
According to the GF Value Line, the stock, while undervalued, is a possible value trap. As such, potential investors should do thorough research before making a decision.
The GF Score of 64 implies the company has poor performance potential due to low momentum, value and financial strength ranks, middling marks for profitability and a high growth rating.
The stock is currently not being held by any gurus.
Additional trades and portfolio performance
During the quarter, Rolfe also established positions in PepsiCo Inc. (PEP, Financial), the Vanguard FTSE Developed Markets ETF (VEA, Financial) and Amazon.com Inc. (AMZN, Financial) as well as cut back the Tractor Supply Co. (TSCO, Financial) and Motorola Solutions Inc. (MSI, Financial) investments.
Wedgewood's $620 million equity portfolio, which is composed of 36 stocks, is most heavily invested in the technology, communication services and financial services sectors.
The firm posted a return of -25.4% for 2022, underperforming the S&P 500 Index's -18.11% return.