mardi 14 novembre 2017

Ce que les meilleurs achètent

You think the market is expensive?

You would never pay more than 20 times earnings for a stock?

Well, you surely don't work for Giverny Capital.

Because the activity of the fund for the quarter ending on september 30th was out yesterday and we could see that they sold NOTHING over the last quarter.

They just added to their existing positions and even to some very expensive stocks on a value perspective.

Let's see the top positions of the fund and the percentage of shares added during last quarter:

1- Berkshire: 19% (+2%)
2- Carmax: 10,4% (+3%)
3- Bank of the Ozarks: 8,6% (+4%)
4- Ametek: 6,6% (+1%)
5- LKQ: 5,8% (+1%)
6- Visa: 5,2% (0%)
7- Disney: 5,1% (+1%)
8- Markel: 4,8% (+1%)
9- Union Pacific: 4,6% (+7%)
10- Wells Fargo: 4,3% (+1%)
11- Alphabet (GOOG + GOOGL): 4,3% (+6%)
14- Liberty Media (Formula one): 3,5% (+7%)
16- Heico (3,4%) (+7%)

Heico is expensive as fuck. It seems that it's a kind of Precision Castparts. If you pay 40 times current earnings for a stock like this, you gotta have faith in this stock.  But, if you take a look at the performance of that stock since the beginning of 2017, you'll bite your fingers seeing how much money you could have made (from 63$ to 90$, almost a 50% performance).

These guys are pretty good. They know better than many people how to pick stocks that retain their value, which is not an easy task at all. And they know when to pay a premium for a stock.

Let's take a look at some other people too:

Chuck Akre:

Like Giverny Capital, Chuck bought a lot during last quarter. That guy is surely one of the best investors out there. I believe his picks must be studied by most of us because he inspired a lot some great investors like the guys at Giverney (high PE but good ROE with great growing cash flow machines).

American Tower: added 8% to the position
Moody's: added 41% to the position
Mastercard: added 13% to the position
Visa: added 35% to the position
Dollar Tree: added 16% to the position
O'Reilly: added 130% to the position

Warren Buffett:

Apple: added 3% to the position
Bank of America: new position for about 10% of the total portfolio ($hitload of money)
IBM: reduced the position by 32%

Buffett is admitting his mistake with IBM by selling more and more of it. That stock had a huge ROE and a low PE. The market isn't crazy. When a PE is really low, usually, there's something wrong with a stock and it was (it's still) the case with IBM.

The new position in Bank of America is probably a conversion of warrants or some shit. I don't know. Please, check elsewhere to have the correct explanation.

 Lou Simpson:

Allison Transmission Holdings (ALSN): added 46% to the position
Axalta Coating Systems (AXTA): added 12% to the position

I know almost nothing about these stocks. ALSN looks OK, but I'd have to dig much deeper.

Bill Ackman:

The fact that this guy still manages more than 5 billion US dollars amazes me. How the fuck some people still trust him after all the crap he did? Here’s what he does: buy a large stake of a company, TRY to do something to improve earnings (which doesn’t work 50% of the time) then sell almost everything a few years later with some stupid excuse like capital losses for tax purposes (LOLLLL).

Restaurant Brands: position reduced by 32%
Automatic Data Processing: added 403% to the position

What kind of shit will he try to do with Automatic Data Processing now?

6 commentaires:

  1. This is a great post. Good job.
    I don't mind paying up but I need to see very explosive growth and I want a debt free company. My big purchase this past quarter was Arista Networks (ANET). It's very expensive like Heico but it has grown by about 50% per year over the last five years and lately it is shattering past some very high quarterly earnings estimates. The last two quarters they beat wall street analyst estimates by 41% and by 36%. Estimates for future quarters keep rising. They have over a billion in cash and a 26% ROE.

  2. An article about how Trump could spoil the party for Linamar investors: "Linamar Exposed, Magna Not So Much, to U.S. Nafta Auto Threat." Here's the link to the article:

  3. Giverny should own ROST in addition to TJX.

    They reported solid earnings yesterday.

  4. ROST tremendous company, great location strategy, sweet results in a reeling industry, just a terrific long term holding.

    Congrats to all Ross Stores champions. The stock is up 10% Friday morning.

  5. I own ROST since 2012. Never had the intention to sell.

  6. Arista Networks (ANET) - Are you concerned about the insider selling? I want to get a position but I have no idea how to approach this stock.