After fine performances for many decades, Dodge & Cox’s stock fund lost 43% in 2008. For the nine months ended September 30, 2009, the Fund had a total return of 25.6%. In the third quarter they did more selling than buying. This the Q3 portfolio update.
Dodge & Cox is invested heavily in health care sector. This is what they wrote in their shareholder letter regarding to healthcare:
In our view, the cloud of uncertainty hanging over the sector is giving us the opportunity to invest in solid business franchises in pharmaceuticals, medical devices, and services at their lowest valuations in decades. Our fundamental research and stock selection process continues to be “bottom-up” oriented, focused on the long-term outlook for and valuation of individual companies. We develop a range of potential outcomes, incorporating downside risk and upside potential, for each company’s profits and cash flow. As we assess the possible impact of U.S. health care reform, we believe current stock prices for many leading companies reflect a fairly pessimistic scenario and may not reflect positive developments. For example, technological innovation will continue to drive advancements in medical products and services. We also believe the developing world is likely to be a source of significant long-term incremental growth, as more resources are dedicated to modern health care.
Dodge & Cox buys Carefusion Corp., Nokia Corp., Suntrust Banks Inc., Allergan Inc., Ecolab Inc., Intuitive Surgical Inc., sells Health Management Associates Inc., International Paper Company, Kyocera Corp., Pacific Capital Bancorp, Statoil Asa, Alleghany Corp. during the 3-months ended 09/30/2009, according to the most recent filings of his investment company, Dodge & Cox. Dodge & Cox owns 193 stocks with a total value of $78.8 billion. These are the details of the buys and sells.
This is the sector weightings of his portfolio:
These are the top 5 holdings of Dodge & Cox
Dodge & Cox is invested heavily in health care sector. This is what they wrote in their shareholder letter regarding to healthcare:
In our view, the cloud of uncertainty hanging over the sector is giving us the opportunity to invest in solid business franchises in pharmaceuticals, medical devices, and services at their lowest valuations in decades. Our fundamental research and stock selection process continues to be “bottom-up” oriented, focused on the long-term outlook for and valuation of individual companies. We develop a range of potential outcomes, incorporating downside risk and upside potential, for each company’s profits and cash flow. As we assess the possible impact of U.S. health care reform, we believe current stock prices for many leading companies reflect a fairly pessimistic scenario and may not reflect positive developments. For example, technological innovation will continue to drive advancements in medical products and services. We also believe the developing world is likely to be a source of significant long-term incremental growth, as more resources are dedicated to modern health care.
Dodge & Cox buys Carefusion Corp., Nokia Corp., Suntrust Banks Inc., Allergan Inc., Ecolab Inc., Intuitive Surgical Inc., sells Health Management Associates Inc., International Paper Company, Kyocera Corp., Pacific Capital Bancorp, Statoil Asa, Alleghany Corp. during the 3-months ended 09/30/2009, according to the most recent filings of his investment company, Dodge & Cox. Dodge & Cox owns 193 stocks with a total value of $78.8 billion. These are the details of the buys and sells.
- New Purchases: AGN, CFN, ECL, ISRG, NOK, STI,
- Added Positions: BK, CX, GE, MICC, SYMC, USB, VOD,
- Reduced Positions: BDX, COP, CS, CSC, FE, GPC, GPS, KMX, LMDIA, MAS, MCD, NCR, PBR-A, RDS-B, SHW, SNE, SYK, UNM, WHR, WTM, WY,
- Sold Out: HMA, IP, KYO, PCBC, STO, Y,
This is the sector weightings of his portfolio:
| Health Care | 21.8% |
| Consumer Services | 19% |
| Technology | 15.6% |
| Financials | 11.6% |
| Oil & Gas | 10.9% |
| Industrials | 10.8% |
| Telecommunications | 4.2% |
| Consumer Goods | 3.3% |
| Basic Materials | 2.3% |
These are the top 5 holdings of Dodge & Cox
- HewlettPackard Company (HPQ) - 73,818,728 shares, 4.42% of the total portfolio
- Novartis AG (NVS) - 65,401,863 shares, 4.18% of the total portfolio
- Schlumberger Ltd. (SLB) - 51,322,416 shares, 3.88% of the total portfolio
- GlaxoSmithKline Plc (GSK) - 67,266,971 shares, 3.37% of the total portfolio
- News Corp. (NWS-A) - 203,032,030 shares, 3.09% of the total portfolio
