Lou Simpson Adds Precision Castparts to Portfolio in First Quarter

Jun 08, 2015

Warren Buffett (Trades, Portfolio) has called Lou Simpson (Trades, Portfolio) “a cinch to be inducted into the investment hall of fame,” and he should know. Simpson was CEO of capital operations for GEICO when Buffett bought the company in 1996, and he remained with the company until 2010.

Over a quarter of a century, Simpson produced average annual gains of more than 20%.

Now retired from GEICO, Simpson bought only one new stock in the first quarter – Precision Castparts Corp (PCP, Financial), a Portland, Oregon-based maker of parts used in the aerospace, industrial gas turbine and defense industries. Simpson bought 1,352,140 shares for an average price of $212.18 per share. The transaction had a 9.75% impact on his portfolio.

That made Precision Castparts the fifth-most valuable stake in Simpson’s somewhat abbreviated portfolio.

Most of Simpson’s first-quarter deals were adds to existing holdings. In fact, he added to all four of the stakes in his portfolio that are more valuable than Precision Castparts – Valeant Pharmaceuticals International Inc (VRX, Financial), Brookfield Asset Management Inc (BAM, Financial), Wells Fargo & Co (WFC, Financial) and Berkshire Hathaway Inc (BRK.B, Financial).

Simpson added 104,313 shares to his most valuable stake, Valeant Pharmaceuticals, a Canadian pharmaceutical company, for an average price of $177.4 per share. The deal had a 0.71% impact on his portfolio.

Simpson acquired 3,513,471 shares of Brookfield Asset Management, a Toronto, Ontario-based company that handles total assets under management of more than $200 billion, for an average price of $35.3 per share. The purchase had a 4.31% impact on Simpson’s portfolio.

Brookfield Asset Management has a market cap of $32.96 billion and an enterprise value of $110.55 billion. It has a P/E of 10.7, a Price/Book of 1.6 and a Price/Sales of 2.0. Murray Stahl (Trades, Portfolio), Chris Davis (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Third Avenue Management (Trades, Portfolio), Ron Baron (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have shares of Brookfield in their portfolios. Jim Simons (Trades, Portfolio) sold his stake in the first quarter.

Simpson added 330,731 shares of Wells Fargo, a San Francisco-based banking and financial services company, to his portfolio for an average price of $54.04 per share. The purchase had a 0.62% impact on Simpson’s portfolio.

Simpson bought 114,535 Class B shares of Berkshire Holloway, a multinational holding company based in Omaha, for an average price of $147.14 per share. The deal had a 0.57% impact on Simpson’s portfolio.

Simpson also added to his existing stakes in Charles Schwab Corp (SCHW, Financial), U.S. Bancorp (USB, Financial), Crown Holdings Inc (CCK, Financial) and Liberty Global PLC (LBTYK, Financial).

Simpson sold his 1,594,678-share stake in DirecTV (DTV, Financial), a California-based direct broadcast satellite TV provider, for an average price of $86.38 per share. The sale had a -5.3% impact on Simpson’s portfolio.

In April, the Better Business Bureau’s National Advertising Division ruled against DirecTV in a complaint about its advertising claims raised by cable providers. The NAD instructed DirecTV to modify its advertisements or take them off the air. While appealing the ruling, DirecTV said it had already changed its advertising campaign.

Simpson reduced his stakes in two companies – Oracle Corporation (ORCL, Financial) and United Parcel Service Inc (UPS).

He sold 33,925 shares of Oracle, a California-based computer technology corporation, for an average price of $102.61 per share. The transaction had a -8.27% impact on Simpson’s portfolio.

To view the portfolios of more gurus, visit the List of Gurus page. Not a premium member of GuruFocus? Try it free for 7 days.

Research Tools

All-In-One Screener Stock Ideas Stock List Guru List Guru Real-Time Picks Insider List Insider Trades Economic Indicators Sector & Industry Performance DCF Calculator Discussion Board

Product

Pricing Plans Excel Add-In Google Sheets Add-on Data API Stock Comparison Table Manual of Stocks Mobile App 中文

Education

Financial Glossary Tutorials FAQ Schedule Free Session Buffett Indicator Shiller P/E Yield Curve Today U.S. Inflation Rate Global Market Valuation Fed Net Liquidity Buffett Assets Allocation

Company

About GuruFocus Career Contact Us ETF Advertise Site Map Term of Use Privacy Policy Referral Program Partner Program

Survey

We'd love to learn more about your experiences on GuruFocus.com and how we can improve!

Take Survey

Disclaimers

GuruFocus.com is not operated by a broker or a dealer. It has an affiliated registered investment adviser, which serves as the subadviser to an exchange traded fund. This investment adviser does not provide advice to individual investors. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The individuals or entities selected as "gurus" may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. Gurus may be added or dropped from the GuruFocus site at any time. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC. Stock quotes are provided by QuoteMedia, Inc. (CSI). Company fundamental data is provided by Morningstar. Analyst estimates data is sourced from both Refinitiv and Morningstar, with priority given to Refinitiv data. Data is updated daily.