Summary: As of March 31, 2009, David Winters’s top domestic holdings include: Berkshire Hathaway Inc. (BRK-B), ConsolidatedTomoka Land Co (CTO, Financial), Reynolds American Inc. (RAI, Financial), Chesapeake Energy Corp. (CHK, Financial), Goldman Sachs Group Inc. (GS, Financial), and Franklin Resources Inc. (BEN, Financial)
David Winters of Wintergreen Fund
David Winters started his own mutual fund Wintergreen Fund in 2005 after a successful career in Mutual Series Group and then Franklin Mutual Advisers, LLC. Here is the bio from Wintergreen Advisers, LLC’s website:
As of December 31, 2008, about three and half years after launching the fund, David Winters manages $941 million. For young professionals who are inspired to manage hundreds of million or billions of dollars of asset, here is a lesson to learn: first learn the trade from people like Michael Price and then become the president and CIO of companies like Franklin Mutual Advisers.
Investment Philosophy
David Winters learned value investing from another Investment Guru Michael Price when David Winters joined Mutual Series in 1987, who taught him not only to look for deep discount value, but also look for ways to help management unlock the potential value for the investors. Another thing he differ from most value investors is that his willingness to travel around world to find value. In the companies website, he listed his investment philosophy:
This list is what he likes to refer to as the ABCs of global value investing:
Performance and Reflection on 2008 Decline
Since Inception on Oct. 17, 2005, Wintergreen Fund returned 2.41, 20.10, 21.13, and -39.05% during 2005(partial year), 2006, 2007, and 2008, averaging -2.96% per year whiles S&P 500 index lost 6.34% per year during the period.
As a money manager, having a negative return is not a good thing, even the negativity came from just one year (2008). It requires a bit of explanation. David Winters offered the following word of wisdom in his annual 2008 report:
He also provided the following words of encouragement:
Year-to-day (June 3, 2009), Wintergreen Fund returned 11%, handily beating the S&P 500 Index performance. Maybe the “normal market” David Winter was talking about has actually returned?
Top 1Q09 Holdings:
David Winters invests globally. Only 28.3% of his fund's assets are invested in Domestic US stocks. The rest invested in places like Japan (11.7%), Switzerland (11.3%), UK (9.1%), Hong Kong (8.1%), Malaysia (6.9%), etc.. Here we include only the domestic US companies.
No. 1: Berkshire Hathaway Inc. (BRK-B), Weightings: 24.01% - 28,619 Shares
Yes, Surprise! We have a true believer of Warren Buffett in David Winters. Nearly a quarter of his investment in domestic equity is dedicated to this one stock.
Berkshire Hathaway Inc. has a market cap of $40.22 billion; its shares were traded at around $2924 with and P/S ratio of 0.4. Berkshire Hathaway Inc. had an annual average earning growth of 1.7% over the past 10 years.
David Winters owned the stock since 4Q06, when he just owned 6,312 shares. He built his stake in Berkshire Hathaway over the past two and half years and by the end of 2008, he owns 28,619. Given the fact that Berkshire Hathaway has been traded generally higher than today’s price during the period, David Winter has lost money on Warren Buffett’s stock so far.
No. 2: ConsolidatedTomoka Land Co (CTO), Weightings: 13.09% - 1,481,474 Shares
This is where Activist Investor Saga -- David Winters style played out.
Consolidated-Tomoka Land Co. real estate company based in Florida. Company owns land and mineral rights in Florida, very little debt. One piece of the pie is 10,300 acres within the city limits of Daytona Beach. Besides, it has also income properties scattered in the Southeast states worth $120 million. The company Consolidated Tomoka Land Co has a market cap of $184.5 million; its shares were traded at around $32.23 with a P/E ratio of 13.8 and P/S ratio of 9.9. The dividend yield of ConsolidatedTomoka Land Co stocks is 1.3%.
David Winters started to buy the stock in 4Q06, and but 4Q07, he accumulated almost 1.5 million shares or about 26%.
Unlike in the Bill Ackman vs. Target proxy fight that people on this website site became familiar with, David Winters nominated three board directors and succeeded in having them elected. Their election will change dramatically how the 107-year company is going to be run. Among the other things, the company is going to adopt a more aggressive approach to realize the value, including engaging in more development projects and stock repurchase, according to this news piece.
No. 3: Reynolds American Inc. (RAI), Weightings: 11.44% - 1,072,732 Shares
Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company Inc., Lane Limited and R.J. Reynolds Global Products Inc.. R.J. Reynolds Tobacco Company the second- largest U.S. tobacco company manufactures about one of every three cigarettes sold in the United States including five of the nation's 10 best-selling brands: Camel, Winston, KOOL, Salem and Doral. Santa Fe Natural Tobacco Company Inc. manufactures Natural American Spirit cigarettes. Reynolds American Inc. has a market cap of $11.57 billion; its shares were traded at around $39.7 with a P/E ratio of 8.2 and P/S ratio of 1.3. The dividend yield of Reynolds American Inc. stocks is 8.6%. Reynolds American Inc. had an annual average earning growth of 20.6% over the past 5 years.
David Winters bought into the company in 4Q06 and has built his stake through 3Q08 when his ownership peaked at 1.46 million shares. He Has then sold some shares in 4Q08 and as of 1Q09, he owns 1.07 million shares.
No. 4: Chesapeake Energy Corp. (CHK), Weightings: 9.3% - 1,831,793 Shares
Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition, and production of onshore natural gas and oil reserves. Chesapeake Energy Corp. has a market cap of $14.17 billion; its shares were traded at around $22.69 with a P/E ratio of 7.8 and P/S ratio of 1.2. The dividend yield of Chesapeake Energy Corp. stocks is 1.3%. Chesapeake Energy Corp. had an annual average earning growth of 19.6% over the past 5 years.
David Winters bought into CHK first in 1Q07 with a small position of 869,000 shares, and has built his stake of 1,831,793 shares through 3Q08. He maintained his ownership in the stock through the past two quarters.
No. 5: Goldman Sachs Group Inc. The (GS), Weightings: 8.79% - 278,829 Shares
Goldman Sachs is a global investment banking and securities firm providing a full range of investing advisory and financing services. The has a market cap of $65.69 billion; its shares were traded at around $142.15 with a P/E ratio of 29.6 and P/S ratio of 1.2. The dividend yield of Goldman Sachs Group Inc. The stocks is 1%. Goldman Sachs Group Inc. The company had an annual average earning growth of 24.5% over the past 10 years.
David Winters bought into the company in 3Q08 with a 147,800 stake and increased to 278,829 shares in 4Q08. His position was unchanged during 1Q09.
No. 6: Franklin Resources Inc. (BEN), Weightings: 8.03% - 500,872 Shares
Franklin Resources provides investment advisory and related services to retail mutual funds, institutional and private accounts, and other investment products globally. The mutual funds and other products that it advise are sold to the public under three brand names: Franklin Templeton and Mutual Series. Franklin Resources Inc. has a market cap of $16.63 billion; its shares were traded at around $71.38 with a P/E ratio of 17.8 and P/S ratio of 2.7. The dividend yield of Franklin Resources Inc. stocks is 1.2%. Franklin Resources Inc. had an annual average earning growth of 12.4% over the past 10 years.
These is David Winters’s ex-employer. Pay-back time? Probably not just that. Warren Buffett urged people to invest in business one can understand. What else does David Winters understand better other than the company for which he worked for almost 20 years?
Talking about stay within one’s circle of competence!
David Winters of Wintergreen Fund
David Winters started his own mutual fund Wintergreen Fund in 2005 after a successful career in Mutual Series Group and then Franklin Mutual Advisers, LLC. Here is the bio from Wintergreen Advisers, LLC’s website:
Prior to forming Wintergreen Advisers in May 2005, Mr. Winters held various positions with Franklin Mutual Advisers, LLC, including, president, chief executive officer and chief investment officer. Mr. Winters led the Mutual Series group of global and domestic equity value funds and served as the chief investment officer of Franklin Mutual Advisers, LLC with assets under management in excess of $35 billion as of March 31, 2005. Mr. Winters also served as the portfolio manager of the Mutual Discovery Fund during the period beginning February 1, 2000 through May 10, 2005, and other client accounts managed in a similar investment style. Mr. Winters had been a member of the management team of the Mutual Series since 1987. He was named director of research in 2000, and was promoted to president and chief investment officer in 2001.
As of December 31, 2008, about three and half years after launching the fund, David Winters manages $941 million. For young professionals who are inspired to manage hundreds of million or billions of dollars of asset, here is a lesson to learn: first learn the trade from people like Michael Price and then become the president and CIO of companies like Franklin Mutual Advisers.
Investment Philosophy
David Winters learned value investing from another Investment Guru Michael Price when David Winters joined Mutual Series in 1987, who taught him not only to look for deep discount value, but also look for ways to help management unlock the potential value for the investors. Another thing he differ from most value investors is that his willingness to travel around world to find value. In the companies website, he listed his investment philosophy:
Under normal market conditions, the Fund invests mainly in equity securities (including securities convertible into, or that the Investment Manager expects to be exchanged for, common or preferred stock) of companies of any nation that the Investment Manager believes are available at market prices less than their value. The Investment Manager will seek to identify securities through extensive analysis and research, taking into account, among other factors, the relationship of book value to market value, cash flow and multiples of earnings.
The Investment Manager will follow a global approach to investing that combines the following key elements:
Activism and Arbitrage
If the Fund takes an activist role, it will seek to influence or control management, or invest in other companies that do so when the Investment Manager believes the Fund may benefit. Arbitrage opportunities will typically involve securities of companies involved in restructurings (such as mergers, acquisitions, consolidations, liquidations, spinoffs or tender or exchange offers) or that the Investment Manager believes are attractively priced relative to an economically equivalent security of the same or another company.
Bankruptcy
Securities of companies that are, or are about to be, involved in bankruptcy.
Cash and Convertibles
Cash equivalent instruments and debt securities or preferred stock convertible into common stock.
Distressed Companies
Securities of companies that are, or are about to be, involved in reorganizations, financial restructurings, or bankruptcy.
Equities That Are Undervalued
Securities trading at a discount to intrinsic value.
Financings
Securities of companies that are, or are about to be, involved in financial restructurings, or participation in such financings.
Global
Securities of both U.S. issuers and non-U.S. issuers, including securities of issuers in emerging markets.
Hedging
Hedging strategies designed to reduce potential loss as a result of certain economic or market risks, including risks related to fluctuations in interest rates, currency exchange rates, and broad or specific market movements may be used. The Fund will primarily engage in forward foreign currency exchange contracts. The Fund may also engage in other currency transactions such as currency futures contracts, currency swaps, options on currencies, or options on currency futures, or it may engage in other types of transactions, such as the purchase and sale of exchange-listed and OTC put and call options on securities, equity and fixed-income indices and other financial instruments; and the purchase and sale of financial and other futures contracts and options on futures contracts.
Integrity
Evaluating management ability and incentives to deliver superior returns to shareholders.
This list is what he likes to refer to as the ABCs of global value investing:
Performance and Reflection on 2008 Decline
Since Inception on Oct. 17, 2005, Wintergreen Fund returned 2.41, 20.10, 21.13, and -39.05% during 2005(partial year), 2006, 2007, and 2008, averaging -2.96% per year whiles S&P 500 index lost 6.34% per year during the period.
As a money manager, having a negative return is not a good thing, even the negativity came from just one year (2008). It requires a bit of explanation. David Winters offered the following word of wisdom in his annual 2008 report:
.
Last year, we saw a global crushing of the market that was worse than many of us have ever experienced. Unfortunately, the downturn that started as a day-by-day experience continued week after week and eventually month after month. I have been active in securities market for all of my adult life and I believe this bear market is different from others I have seen. The difference is not just its duration and its breadth, but the 2008 global bear market moved dramatically within trading days and often the movements were not based on corporate news
He also provided the following words of encouragement:
We think the market selloff has the potential to provide value investors with long-term opportunities. A few select companies are producing good financial results with solid prospects for their businesses and still their securities’ prices have declined. Part of the reason for this phenomenon is that these quality companies are among the relatively few securities with liquidity. This disparity between security price and value has been complicated by fear. In my opinion, this is a good time to purchase some of these high quality companies that are available at seemingly bargain prices. Historically, wealth has been created through ownership of all or a portion of a business held for a long period of time. Although it isn’t clear just when it will happen, I do believe normal market will return
Year-to-day (June 3, 2009), Wintergreen Fund returned 11%, handily beating the S&P 500 Index performance. Maybe the “normal market” David Winter was talking about has actually returned?
Top 1Q09 Holdings:
David Winters invests globally. Only 28.3% of his fund's assets are invested in Domestic US stocks. The rest invested in places like Japan (11.7%), Switzerland (11.3%), UK (9.1%), Hong Kong (8.1%), Malaysia (6.9%), etc.. Here we include only the domestic US companies.
No. 1: Berkshire Hathaway Inc. (BRK-B), Weightings: 24.01% - 28,619 Shares
Yes, Surprise! We have a true believer of Warren Buffett in David Winters. Nearly a quarter of his investment in domestic equity is dedicated to this one stock.
Berkshire Hathaway Inc. has a market cap of $40.22 billion; its shares were traded at around $2924 with and P/S ratio of 0.4. Berkshire Hathaway Inc. had an annual average earning growth of 1.7% over the past 10 years.
David Winters owned the stock since 4Q06, when he just owned 6,312 shares. He built his stake in Berkshire Hathaway over the past two and half years and by the end of 2008, he owns 28,619. Given the fact that Berkshire Hathaway has been traded generally higher than today’s price during the period, David Winter has lost money on Warren Buffett’s stock so far.
No. 2: ConsolidatedTomoka Land Co (CTO), Weightings: 13.09% - 1,481,474 Shares
This is where Activist Investor Saga -- David Winters style played out.
Consolidated-Tomoka Land Co. real estate company based in Florida. Company owns land and mineral rights in Florida, very little debt. One piece of the pie is 10,300 acres within the city limits of Daytona Beach. Besides, it has also income properties scattered in the Southeast states worth $120 million. The company Consolidated Tomoka Land Co has a market cap of $184.5 million; its shares were traded at around $32.23 with a P/E ratio of 13.8 and P/S ratio of 9.9. The dividend yield of ConsolidatedTomoka Land Co stocks is 1.3%.
David Winters started to buy the stock in 4Q06, and but 4Q07, he accumulated almost 1.5 million shares or about 26%.
Unlike in the Bill Ackman vs. Target proxy fight that people on this website site became familiar with, David Winters nominated three board directors and succeeded in having them elected. Their election will change dramatically how the 107-year company is going to be run. Among the other things, the company is going to adopt a more aggressive approach to realize the value, including engaging in more development projects and stock repurchase, according to this news piece.
No. 3: Reynolds American Inc. (RAI), Weightings: 11.44% - 1,072,732 Shares
Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company Inc., Lane Limited and R.J. Reynolds Global Products Inc.. R.J. Reynolds Tobacco Company the second- largest U.S. tobacco company manufactures about one of every three cigarettes sold in the United States including five of the nation's 10 best-selling brands: Camel, Winston, KOOL, Salem and Doral. Santa Fe Natural Tobacco Company Inc. manufactures Natural American Spirit cigarettes. Reynolds American Inc. has a market cap of $11.57 billion; its shares were traded at around $39.7 with a P/E ratio of 8.2 and P/S ratio of 1.3. The dividend yield of Reynolds American Inc. stocks is 8.6%. Reynolds American Inc. had an annual average earning growth of 20.6% over the past 5 years.
David Winters bought into the company in 4Q06 and has built his stake through 3Q08 when his ownership peaked at 1.46 million shares. He Has then sold some shares in 4Q08 and as of 1Q09, he owns 1.07 million shares.
No. 4: Chesapeake Energy Corp. (CHK), Weightings: 9.3% - 1,831,793 Shares
Chesapeake Energy Corp. is an independent oil and gas company engaged in the development, exploration, acquisition, and production of onshore natural gas and oil reserves. Chesapeake Energy Corp. has a market cap of $14.17 billion; its shares were traded at around $22.69 with a P/E ratio of 7.8 and P/S ratio of 1.2. The dividend yield of Chesapeake Energy Corp. stocks is 1.3%. Chesapeake Energy Corp. had an annual average earning growth of 19.6% over the past 5 years.
David Winters bought into CHK first in 1Q07 with a small position of 869,000 shares, and has built his stake of 1,831,793 shares through 3Q08. He maintained his ownership in the stock through the past two quarters.
No. 5: Goldman Sachs Group Inc. The (GS), Weightings: 8.79% - 278,829 Shares
Goldman Sachs is a global investment banking and securities firm providing a full range of investing advisory and financing services. The has a market cap of $65.69 billion; its shares were traded at around $142.15 with a P/E ratio of 29.6 and P/S ratio of 1.2. The dividend yield of Goldman Sachs Group Inc. The stocks is 1%. Goldman Sachs Group Inc. The company had an annual average earning growth of 24.5% over the past 10 years.
David Winters bought into the company in 3Q08 with a 147,800 stake and increased to 278,829 shares in 4Q08. His position was unchanged during 1Q09.
No. 6: Franklin Resources Inc. (BEN), Weightings: 8.03% - 500,872 Shares
Franklin Resources provides investment advisory and related services to retail mutual funds, institutional and private accounts, and other investment products globally. The mutual funds and other products that it advise are sold to the public under three brand names: Franklin Templeton and Mutual Series. Franklin Resources Inc. has a market cap of $16.63 billion; its shares were traded at around $71.38 with a P/E ratio of 17.8 and P/S ratio of 2.7. The dividend yield of Franklin Resources Inc. stocks is 1.2%. Franklin Resources Inc. had an annual average earning growth of 12.4% over the past 10 years.
These is David Winters’s ex-employer. Pay-back time? Probably not just that. Warren Buffett urged people to invest in business one can understand. What else does David Winters understand better other than the company for which he worked for almost 20 years?
Talking about stay within one’s circle of competence!
