During the second quarter, the Bill & Melinda Gates Foundation nearly tripled his stake in Liberty Global (LBTYK), adding an additional 454,077 shares of the company. The foundation's portfolio is managed by Michael Larson of Cascade Investment Fund. Since the addition, Liberty Global’s market price has tumbled by an estimated 23%.
Liberty Global PLC is an international provider of video, broadband internet, fixed-line telephone and mobile services. It is the world’s largest cable company conducting business operations across 14 countries worldwide. The company’s core philosophy is “Connect, Discover. Be Free”. As of June 30, the company has 59 million video, internet and voice subscribers, as well as 11 million mobile subscribers and 7 million WiFi access points worldwide.
Liberty Global has a market cap of $26.93 billion, an enterprise value of $652.49 million, it has 919.94 million shares outstanding and its short percentage of float is 6.34%.
Warren Buffett likes to follow four basic mental models when investing in securities.
A stock must be stable and understandable
Stock must have a long term prospect
A stock must be managed by vigilant leader
The stock must be undervalued
These models can be applied to Liberty and may have contributed to Larson's decision to add to Gates' holding.
Liberty Global is easy to understand because its business models are straightforward.
Liberty Global is the largest cable provider in the world which provides a long-term prospect for the company. It's very tough for other companies to replicate a business with an already established large customer base.
The company is run by vigilant leaders with over 70 years of combined experience. The current chairman of Liberty Global is John C. Malone, who has over 40 years of cable television and media experience. Liberty Global’s current CEO is Michael T. Fries, who has 30 years of experience in the cable and media industry.
Larson likely believes that Liberty Global is undervalued because it continues to expand its operations globally, and it already has 59 million video, internet and voice subscribers internationally, as well as 11 million mobile subscribers and 7 million WiFi access points worldwide.
Bill Gates (Trades, Portfolio) co-founded Microsoft (MSFT, Financial) alongside Paul Allen. He is currently ranked as the richest man in the world, according to Forbes, with an estimated net worth of $77.3 billion. In 2000, Gates and his wife Melinda formed the Bill & Melinda Gates Foundation. The foundation was formed to help aid global healthcare to developing countries and to help reduce extreme poverty. The Bill & Melinda Gates Foundation Trust currently owns 18 stocks with a total value of $16.821 billion.
Disclosure:Â Author does not own any shares of this company.
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