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Holly LaFon
Holly LaFon
Articles (9583)  | Author's Website |

Tweedy Browne Buys Goldman Sachs, Boosts Berkshire Hathaway in 4th Quarter

The 99-year-old firm said it found stocks at 'significant discounts'

February 08, 2019 | About:

The 99-year-old Tweedy Browne (Trades, Portfolio) Company revealed its fourth-quarter portfolio update on Friday, showing that the venerated investment firm purchased two stocks, Goldman Sachs (NYSE:GS) and Carnival Cruise (NYSE:CCL).

Calling “market volatility and the resulting investor anxiety” the “friend of the value investor,” management said its fourth-quarter buys each traded at “significant discounts” from their “conservative estimates of intrinsic value.”

Tweedy Browne (Trades, Portfolio) has adhered to principles established by value investing pioneer Ben Graham since its founding, buying discounted stocks of both domestic and international markets. While each of its four funds posted losses for the fourth quarter and full-year 2018, they each beat their benchmarks. The Global Value Fund, founded in 1993, declined 8.82% for the fourth quarter versus 12.54% in the MSCI EAFE Index (in U.S. dollars), and 6.67% for the year, versus a 13.79% dive in the index. Since inception, the fund has achieved an 8.8% annualized return versus 4.76% for the benchmark.

Most of the funds’ outperformance resulted from a stock picking and the remainder from its policy of passively hedging foreign currency exposure back into the U.S. dollar in two of its funds, management said in a fourth quarter letter.

Tweedy Browne (Trades, Portfolio)’s combined portfolio at quarter-end had a value of $2.82 billion, with 30.67% invested in financial services and 30.45% in technology stocks. Management’s interest in the financial sector has increased to its highest level in more than ten years, according to GuruFocus data.

New buys

Goldman Sachs Inc. (NYSE:GS)

Tweedy Browne (Trades, Portfolio) acquired 100,015 shares of Goldman Sachs Group, giving it 0.59% portfolio weighting. The stock’s fourth-quarter share price averaged $200.

Goldman Sachs Group Inc. has a market cap of $71.3 billion; its shares were traded around $191.67 Friday with a price-earnings ratio of 7.61 and price-sales ratio of 2.29. The trailing 12-month dividend yield of Goldman Sachs Group Inc. is 1.65%. The forward dividend yield of Goldman Sachs Group Inc. is 1.66%.

Carnival Cruise (NYSE:CCL)

The firm purchased 75,125 shares of Carnival Cruise, giving it 0.13% portfolio weight. The stock’s fourth-quarter share price averaged $57.

Carnival Corp. has a market cap of $40.69 billion; its shares were traded around $56.63 Friday with a price-earnings ratio of 12.73 and price-sales ratio of 2.12. The trailing 12-month dividend yield of Carnival Corp. is 3.45%. The forward dividend yield of Carnival Corp. is 3.51%. Carnival Corp. had an annual average earnings growth of 4.30% over the past 10 years.

Adds

Tweedy Browne (Trades, Portfolio) made double-digit increases to two further stocks: CNH Industrial NV (NYSE:CNHI) and Berkshire Hathaway Inc. (NYSE:BRK.B).

CNH Industrial NV (NYSE:CNHI)

The firm increased its position in CNH Industrial by 57.76% to 980,176 shares, giving it 0.32% portfolio space. The stock’s fourth-quarter share price averaged $10.

CNH Industrial NV has a market cap of $13.89 billion; its shares were traded around $10.32 Friday with a price-earnings ratio of 18.84 and price-sales ratio of 0.50. The trailing 12-month dividend yield of CNH Industrial NV is 1.64%. The forward dividend yield of CNH Industrial NV is 1.63%.

Berkshire Hathaway Inc. (NYSE:BRK.B)

The firm increased its position in Berkshire Hathaway by 10.58% to 262,701 shares, giving it 1.9% portfolio weight. The stock’s fourth-quarter share price averaged $209.

Berkshire Hathaway Inc. has a market cap of $494.93 billion; its shares were traded around $200.92 Friday with a price-earnings ratio of 8 and price-sales ratio of 1.94. Berkshire Hathaway Inc. had an annual average earnings growth of 10.70% over the past 10 years. GuruFocus rated Berkshire Hathaway Inc. the business predictability rank of 4-star.

See Tweedy Browne (Trades, Portfolio)’s portfolio here.

About the author:

Holly LaFon
I'm a financial journalist with a Master of Science in journalism from Medill at Northwestern University.

Visit Holly LaFon's Website


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