Ted Weschler is the soft-spoken, well-read portfolio manager whom Warren Buffett (Trades, Portfolio) selected to run the illustrious Berkshire Hathaway (BRK.A, Financial)(BRK.B, Financial) portfolio along with Todd Combs. As of year-end 2017, Buffett had entrusted Weschler with $12 billion to manage independently for Berkshire and has called hiring him, “one of my best moves.” Data shows that the long-term thinker could have left his portfolio at his former fund, Peninsula Capital Advisors, untouched since joining Buffett and still delivered an exceptional return.
In addition to voracious reading, Weschler divulged to Business Insider some of the keys to his stock-picking: “When it comes to wholly owned businesses among other factors it is about pricing power. You have something that is so attractive to the consumer that they pay a premium to walk into your store and do something. There is a number of attributes like that. But you can never just point to one thing,” he said.
Weschler’s $1.12 billion Peninsula Capital portfolio listed nine stocks, including some obscure names, at the end of the third quarter of 2011, the date of his last SEC filing. His largest sectors were basic materials at 31.9%, communication services at 27.6% and health care at 17.6% of the portfolio. Because of the age of the holdings, detailed data on his transaction history for each of the holdings is unavailable.
Performance
WSFS Financial Corp. (WSFS, Financial) was the best performer with a 425% gain, surpassing the 183% rise in the S&P 500. The $1.74 billion market cap is the oldest and largest locally managed bank and trust company in Delaware. Weschler owned 14.3% of the company although it ranked as one of his smaller positions.
Next, Weschler’s Cogent Communications Holdings Inc. (CCOI, Financial), boasted a 292% return since 2011. Weschler held 8.17% of the $2.41 billion market cap company founded in 1999 that provides enterprise internet service to small and midsize businesses in North America, Europe and Asia.
Weschler’s largest position, WR Grace & Co. (GRA, Financial), which occupied almost 32% of his portfolio, returned 171%. The $4.89 billion market cap company makes specialty chemicals and materials.
The only stock to follow Weschler to Berkshire, DaVita Inc. (DVA, Financial), rose 126%. The kidney dialysis care provider stood as his third-largest position, spanning 17.59% of the portfolio. DaVita subsequently appeared in Berkshire’s portfolio in the fourth quarter of 2011, and he continued building the stake until the end of 2013. The company represented 1.35% of Berkshire’s portfolio at the end of 2018’s first quarter.
Each of the remaining stocks advanced less than 100%: Liberty Formula One Group (FWONA, Financial) rose 71%, Liberty Broadband (LBRDA, Financial) rose 69% and Liberty Formula One Group (FWONK, Financial) rose 49%.
Only one of Weschler’s stocks would have sunk to a negative return. Cincinnati Bell Inc. (CBB) declined 14%. The $671.54 million market cap wireless telecom based in Ohio was 4.57% of the portfolio.
See Ted Weschler’s old portfolio at Peninsula Capital here.
