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Holly LaFon
Holly LaFon
Articles (7663) 

Dodge & Cox Buys Kraft and AbbVie

May 14, 2013 | About:

Classic value investors Dodge & Cox scour markets for the best bargains, and in the first quarter, they found only two to their liking: Kraft Foods Group Inc. (KRFT) and AbbVie Inc. (NYSE:ABBV). Their $81.34 billion portfolio experienced a 3% quarter-over-quarter turnover and ended the quarter with 163 holdings.

Last year, Dodge & Cox returned 22% to investors in its Stock Fund, though it is near even with the market over the past 10 years, with a 102.4% cumulative return compared to 99.7% for the S&P500. Long term, over the past 15 years, it performed much better, returning 191.7% cumulatively, compared to 93.8% for the index.

The New Buys

Dodge & Cox bought 3,946 shares of Kraft Foods Group Inc. (KRFT) in the first quarter for $48 per share on average. They expended just $203,000 for this 0.0002% portfolio weighting. Kraft shares have increased 14% from the average purchase price to date.

Kraft Foods, a North American grocery business, was spun off of Mondelez International Inc., an international snack foods business, in October 2012. Dodge & Cox has 11,840 shares of Mondelez International Inc. (MDZ), a 0.0004% portfolio weighting.

Kraft Foods Group Inc. has a market cap of $32.46 billion; its shares were traded at around $54.77 with a P/E ratio of 20.20 and P/S ratio of 1.80. The dividend yield of Kraft Foods Group Inc. stocks is 1.80%.

The larger new buy is AbbVie Inc. (NYSE:ABBV). Dodge & Cox bought 37,865 shares of the company for $37 per share on average, giving it a 0.0019% portfolio weighting. AbbVie shares gained 22% since from the average purchase price.

AbbVie is a pharmaceutical company working on advanced therapies in HUMIRA, metabolic, virology, endocrinology, dyslipidemia and many other areas. Abbvie Inc. has a market cap of $70.59 billion; its shares were traded around $45.35 with a P/E ratio of 13.60 and P/S ratio of 3.80. The dividend yield of Abbvie Inc. stocks is 1.80%.

See Dodge & Cox’s portfolio here. Also check out the Undervalued Stocks, Top Growth Companies and High Yield stocks of Dodge & Cox.

Rating: 2.2/5 (5 votes)


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