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Holly LaFon
Holly LaFon
Articles (8062) 

The 5 Top New Stock Positions of Tweedy Browne’s Portfolio

February 12, 2013 | About:
Tweedy Browne, a renowned, Ben Graham-focused investment company managing $15.6 billion in assets, added seven fresh positions to its portfolio in the fourth quarter. The largest of these are Halliburton Company (NYSE:HAL), Joy Global (NYSE:JOY), Canadian Natural Resources (NYSE:CNQ), Royal Dutch Shell Plc (NYSE:RDS.B) and Heineken N.V. (HEINY). In its fourth quarter letter, Tweedy Browne noted that it bought Halliburton and Joy Global “at significant discounts from our conservative discounts from our conservative estimates of their intrinsic value, were financial strong and we believe have solid prospects for future growth.”

New Buys

Halliburton Company (NYSE:HAL)

The largest new position in the funds, Halliburton Company, has a 4.7% weighting, with 4,640,747 shares purchased for $33 per share on average. The company’s stock price has increased 13% over the past 12 months and a share is priced at $40.67 per share.

Over the past five years, Halliburton’s revenue grew at a rate of 9.5%, EBITDA at 6.4%, and book value at 16.8%. Free cash flow in the same period declined at a rate of 11.8%.

The company has a P/E of 13.1, P/B of 2.5 and P/S of 1.3.


HAL data by GuruFocus.com

Joy Global (NYSE:JOY)

Tweedy Browne purchased 600,375 shares of Joy Global for $59 per share on average, which takes up 1.1% of its portfolio.

The company’s stock has fallen 28% since it began trading in January of 2011. It is at $62.21 per share on Tuesday.

Joy Global is a manufacturer and marketer of equipment and parts and services for the mining industry and industrial applications through its two businesses, P&H Mining Equipment and Joy Mining Machinery.

It has experienced rapid growth in recent years. It has five year growth rates of 12.9% for revenue, 19.6% for EBITDA and 49.7%. Conversely, free cash flow declined at a rate of 15.6%.

Joy Global has a P/E of 8.63, P/B of 2.55 and P/S 1.17.


JOY data by GuruFocus.com

Canadian Natural Resources (NYSE:CNQ)

Tweedy Browne bought 667,600 shares of Canadian Natural Resources for $29 on average in the fourth quarter. The company’s stock declined 16% over the past 12 months and trades for $31.45 on Tuesday.

CNQ is one of the world’s largest crude oil and natural gas producers in the world, with assets in North America, the North Sea and Offshore Africa.

In the past five years the company experienced growth rates of 2.7% for revenue, 4% for EBITDA and 12.5% for book value.

The company has a P/E of 14.24, P/B of 1.4 and P/S of 1.99.


CNQ data by GuruFocus.com

Royal Dutch Shell Plc (NYSE:RDS.B)

Tweedy Browne purchased 365,532 shares of Royal Dutch Shell Plc for $70 per share on average. The company’s stock has moved little since early 2011. Shares are priced at $69.50 on Tuesday.

RDS is a group of energy and petrochemicals companies around the world with 90,000 employees in more than 80 countries and territories. It has both upstream and downstream businesses, and a projects and technology segment.

In the past five years it has had growth rates of 4.6% for revenue, 3.2% for EBITDA and 8.3% for book value. In the last 12 months, revenue increased 0.6%, and book value increased 11.2%. EBITDA declined 6.4% and free cash flow declined 22% in the same time.

RDS has a P/E of 8.16, P/B of 1.18 and P/S of 0.4513.


RDS.B data by GuruFocus.com

Heineken N.V. (HEINY)

Tweedy Brown bought 258,207 shares for its portfolio for almost $32 per share on average in the fourth quarter. On Tuesday, its stock is priced at $33.01, near a 52-week high of $33.43 per share.

Heineken is the owner of a large portfolio beer brands and is one of the world’s largest brewers by sales volume and profitability.

In the past five years, the company’s per share growth rates have been 18% for revenue, 23% for EBITDA, 65% for free cash flow and 16.3% for book value.

In the past 12 months, it reported significant growth: Revenue increased 107.2%, EBITDA increased 94.3%, free cash flow increased 105%, and book value declined 8.3%.

Heineken has a P/B of 3.1 and P/S of 0.8.

See the rest of Tweedy, Browne’s stock portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Tweedy Browne.

Rating: 3.0/5 (4 votes)


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