We eliminated our shares of consumer snack and beverage manufacturer PepsiCo, Inc. (PEP, Financial) during the fourth quarter market selloff to provide funds for more attractive investment opportunities. PepsiCo shares were very close to our estimate of intrinsic value at the time of sale.
We eliminated our position in oil and gas exploration and production company Noble Energy, Inc. (NBL, Financial) as a result of what we believe to be structural changes in the competitive dynamics of the global oil industry and subsequent change to our estimate of intrinsic value. A combination of domestic oil production growth, an increase in the supply of oil from Libya, weakening demand trends in Europe and Asia, and OPEC’s unwillingness to reduce output to mitigate anticipated oversupply led to a significant decline in oil prices as well as a decline in the oil price outlook over the next few years.
