Wallace Weitz Invests in Five New Stakes

Guru nearly doubles holding in Twenty-First Century Fox

Sep 07, 2015

As GuruFocus reported after the conclusion of the first quarter, Wallace Weitz (Trades, Portfolio) found no new investment opportunities in the first three months of 2015 – but he did find some in the second three months. Weitz Partners Fund logged returns of 7.91% last year, 30.87% in 2013 and 17.92% in 2012; so his investments are worth reviewing.

Weitz’s most significant second-quarter transaction was his purchase of a stake in Fossil Group Inc. (FOSL, Financial), a Richardson, Texas-based producer of recreational clothing and accessories. Weitz acquired 835,483 shares for an average price of $77.75 per share. The deal had a 1.64% impact on his portfolio.

Weitz acquired four other new stakes in the second quarter – Monsanto Co. (MON, Financial), Equity Commonwealth (EQC, Financial), Halliburton Co. (HAL, Financial) and Baker Hughes Inc. (BHI, Financial).

Weitz bought a 227,760-share stake in Monsanto, a Missouri-based agrochemical and agricultural biotechnology corporation, for an average price of $115.96 per share. The acquisition had a 0.69% impact on Weitz’s portfolio.

The EPA’s office of environmental health hazard assessment in California is trying to label four chemicals, one of which is a primary ingredient in Monsanto’s popular herbicide Roundup, as known to cause cancer.

Weitz added to more than two dozen existing stakes in the second quarter. The most significant addition was to Twenty-First Century Fox Inc. (FOX, Financial), a Manhattan-based mass media corporation. Weitz nearly doubled his stake with the purchase of 1,184,220 shares at an average price of $33.16 per share. The transaction had a 1.08% impact on Weitz’s portfolio.

Weitz sold three of his existing stakes in the second quarter, the largest of which was his 587,966-share stake in Fidelity National Information Services Inc. (FIS, Financial), a Jacksonville, Fla.-based banking and financial services company. Weitz received an average price of $64.1 per share in a deal that had a -1.09% impact on his portfolio.

Fidelity National Information Services has a market cap of $19.45 billion and an enterprise value of $24.13 billion. It has a P/E of 27.6, a Price/Book of 3.0 and a Price/Sales of 3.0. RS Investment Management (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Jim Simons (Trades, Portfolio), John Keeley (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) have shares of Fidelity National Information Services in their portfolios.

The other stakes Weitz sold were Ascent Capital Group Inc. (ASCMA, Financial) and US Silica Holdings Inc. (SLCA, Financial).

Weitz reduced 21 of his existing stakes in the second quarter. His most noteworthy reduction was the sale of more than one-fifth of his stake in Valeant Pharmaceuticals International Inc. (VRX, Financial), a Canadian pharmaceutical company that is the third-most valuable stake in his portfolio. Weitz sold 200,531 shares for an average price of $221.34 per share. The transaction had a -1.08% impact on his portfolio.

Weitz sold nearly one-third of his stake in Wells Fargo & Co. (WFC, Financial), a San Francisco based banking and financial services company. He sold 609,867 shares for an average price of $55.73 per share. The sale had a -0.9% impact on Weitz’s portfolio.

Weitz sold nearly half of his stake in Catamaran Corp. (CTRX), a Schaumburg, Ill.-based pharmacy benefit management company. Weitz sold 547,657 shares for an average price of $60 per share. The deal had a -0.89% impact on Weitz’s portfolio.

Catamaran has a market cap of $12.79 billion and an enterprise value of $13.36 billion. It has a P/E of 42.6, a Price/Book of 2.5 and a Price/Sales of 0.6. Eric Mindich (Trades, Portfolio), Jim Simons (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and Prem Watsa (Trades, Portfolio) have shares of Catamaran in their portfolios.

Weitz sold more than three-fifths of his stake in Live Nation Entertainment Inc. (LYV), an entertainment company in Beverly Hills, Calif., that was formed by the 2010 merger of Live Nation and Ticketmaster. Weitz sold 1,208,585 shares for an average price of $27.27 per share. The transaction had a -0.83% impact on Weitz’s portfolio.

Live Nation Entertainment has a market cap of $4.98 billion and an enterprise value of $5.68 billion. It has a Price/Book of 4.0 and a Price/Sales of 0.7. Chuck Akre (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Jim Simons (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio) and Mariko Gordon (Trades, Portfolio) have shares of Live Nation Entertainment in their portfolios.

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