"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q1 2021 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased from $9.38B to $10.63B this quarter. The number of positions decreased from 38 to 37.They added Micron Technology and Anthem Inc. while reducing MasterCard, Visa, Berkshire Hathaway, Wayfair, and Arista Networks during the quarter.The top three positions are CarMax, Alphabet, and Facebook, and they add up to ~24% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Ruane, Cunniff & Goldfarb’s 13F portfolio on a quarterly basis. It is based on their regulatory  filed on 5/17/2021. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q4 2020.This quarter Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased ~13% from $9.38B to $10.63B. The number of holdings decreased from 38 to 37. 22 of those stakes are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The top three positions are at ~24% while the top five are at ~37% of the 13F assets: CarMax, Alphabet, Facebook, Taiwan Semi, and UnitedHealth.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable ~50-year track record (July 15, 1970 inception, 13.89% annualized return compared to 11.26% for the S&P 500 index). After new management took over in Q1 2016, the portfolio has seen a significant shift to information & services businesses from asset-intensive manufacturing & retail. Also, the cash allocation which had averaged ~20% since inception is now below ~2%. The following significant stakes in Sequoia’s portfolio are not in the 13F report as they are not 13F securities: Constellation Software (CNSWF), Rolls-Royce Holdings plc (RYCEY), Vivendi (VIVHY), Hiscox Limited (HCXLF), a2 Milk, Eurofin Scientific (ERFSF), and Prosus NV (PROSY). Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .Stake Disposals:None.New Stakes:Micron Technology (MU) and Anthem Inc. (ANTM): These are medium-sized new stakes established this quarter. MU is a 4.42% of the portfolio position purchased at prices between ~$75 and ~$95 and the stock currently trades near the low end of that range at $76.95. The ~4% ANTM stake was established at prices between ~$288 and ~$371 and it is now at ~$369.Stake Increases:CarMax Inc. (KMX): KMX is currently the largest stake in the 13F portfolio at 8.50%. It was purchased in Q2 2016 at prices between $46 and $56 and increased by ~70% in Q4 2016 at prices between $48.50 and $66. Q4 2017 saw a ~30% selling at prices between $64 and $77 while next quarter there was a ~80% increase at prices between $59 and $72. Last eleven quarters had seen a ~45% selling at prices between ~$44 and ~$109. The stock is now at ~$113. There was a minor ~4% stake increase this quarter.Facebook Inc. (FB): The FB position saw a whopping ~600% stake increase in Q1 2018 at prices between $152 and $193. The next two quarters had seen another ~27% increase at prices between $155 and $218. Q1 2019 saw an about turn: ~23% reduction at prices between $124 and $173. This quarter saw a ~13% stake increase at prices between ~$246 and ~$299. The stock currently trades at ~$330 and it is now a top-three stake at ~7% of the portfolio.UnitedHealth (UNH): The top-five 6.57% UNH position was established in Q4 2019 at prices between $215 and $296 and increased by ~300% next quarter at prices between ~$195 and ~$305. Q3 2020 saw a ~30% stake increase at prices between ~$291 and ~$324. The stock currently trades at ~$389. Last two quarters have seen only minor adjustments.Credit Acceptance Corp. (CACC): CACC is a large 5.49% stake established in Q1 2017 at prices between $185 and $221. The stock is now at ~$413. There was a ~25% stake increase last quarter at prices between $288 and $356. This quarter saw a marginal further increase.Note: They have a ~9% ownership stake in Credit Acceptance Corp.Liberty Broadband (LBRDK): LBRDK is a 5.27% of the portfolio position purchased in Q1 2018 at prices between $86 and $97 and increased by ~20% next quarter at prices between $69 and $85. Q1 2020 saw a ~18% reduction at prices between ~$91 and ~$139. There was a ~23% stake increase this quarter at prices between ~$143 and ~$157. The stock currently trades at ~$161.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is the second-largest 13F stake at 8.26% of the portfolio. It was first purchased in 2008 and that original stake was almost sold out the following year. In 2010, a much larger position was built in the mid-200s price-range. Recent activity follows: Q2 2019 saw a one-third reduction at prices between $1036 and $1288. That was followed with a ~60% reduction over the last six quarters at prices between ~$1057 and ~$2138. The stock currently trades at ~$2511.Taiwan Semi (TSM): The top-five 6.58% of the portfolio TSM stake was purchased in Q4 2019 at prices between $46.50 and $59. There was a ~130% stake increase in Q2 2020 at around the same price range. The stock currently trades at ~$116. This quarter saw a ~12% trimming.Note: their investment thesis is based on the following: fabs are capital intensive (~$10B per facility) and the leader naturally has a strong moat thereby yielding big profit margins. Debatably, they produce the most important manufactured component in the modern economy. Main concern is geopolitical risks.Charles Schwab (SCHW): SCHW is a 5.60% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. Q1 2020 saw a ~40% stake increase at prices between $28.50 and $49. The stock is now at ~$70. There was a ~17% selling in Q2 2020 at prices between $32.50 and $43. Last three quarters also saw minor trimming.Jacobs Engineering Group (J): J is a 4.73% long-term stake first purchased in 2012. Recent activity follows: Q2 2018 saw a ~20% increase at prices between $56.50 and $67 while the next six quarters saw minor trimming. There was a ~25% selling in Q1 2020 at prices between ~$63 and ~$104. The stock currently trades at ~$130. Last four quarters have seen minor trimming.Walt Disney (DIS): DIS is a fairly large 4.73% of the portfolio position established in Q2 2020 at prices between $94 and $127 and the stock currently trades at ~$172. There was minor trimming in the last three quarters.Berkshire Hathaway (BRK.A) (BRK.B): Berkshire stake is now at ~4.4% of the portfolio. It is a very long-term position that was the largest stake in their first 13F filing in 1999. Recent activity follows:  Q1 2018 saw a one-third selling at prices between $191 and $217. Last six quarters have seen another ~60% reduction at prices between ~$162 and ~$264. The stock is now at ~$274.Formula One Group (FWONA) (FWONK): Sequoia’s Q4 2016 letter disclosed a new stake in Liberty Media Formula One. They participated in Liberty’s acquisition of Formula One and acquired the shares at a discounted price of $25. There was a 24% stake increase in Q2 2017 at prices between $30.50 and $37. The stock is now at $44.32 and the stake is at 4.94% of the portfolio. The six quarters thru Q3 2019 had seen a ~18% selling at prices between $28.50 and $43 and that was followed with similar selling next quarter at prices between $40 and $46. Last five quarters have seen only minor adjustments.Note: their ownership stake in Formula One Group is ~5%.Arista Networks (ANET): The ~4% ANET stake was primarily built in Q4 2019 at prices between $185 and $249. This quarter saw a ~25% selling at prices between ~$268 and ~$323. The stock currently trades at ~$363.Wayfair Inc. (W): W is a 3.90% of the 13F portfolio stake purchased in Q3 2019 at prices between $106 and $152. Next quarter saw a ~40% stake increase at prices between $80 and $118. That was followed with another ~30% increase in Q1 2020 at prices between ~$24 and ~$110. Last four quarters saw a ~75% reduction at prices between ~$47 and ~$346. The stock currently trades at ~$303.Note: Wayfair has seen a previous roundtrip. It was a very small 0.76% of the portfolio position purchased in Q1 2019 at prices between $85 and $172 and disposed next quarter at prices between $138 and $164.Intercontinental Exchange (ICE) and Fidelity National Information Services (FIS): The 3.60% ICE stake was purchased in Q3 2020 at prices between ~$92 and ~$107 and the stock currently trades at ~$113. FIS is a 2.53% of the portfolio position established in Q3 2020 at prices between ~$134 and ~$156 and it is now at ~$144. Both positions saw marginal trimming in the last two quarters.Netflix Inc. (NFLX): NFLX is a 3.40% of the portfolio position purchased last quarter at prices between ~$471 and ~$554 and the stock currently trades at ~$501. There was marginal trimming this quarter.Note: the Netflix investment thesis is based around the idea that as the global trend toward subscription-based streaming video consumption accelerates, the leaders will be more profitable than the leaders of the cable era.MasterCard Inc. (MA): MA is a 1.69% of the portfolio stake established soon after its IPO in 2006 at a split-adjusted cost-basis of $4.50 per share. The original position was huge at ~2.4M shares (24M shares after accounting for the 10-for-1 stock-split in 2014). It was sold down by ~72% over the next two years. Recent activity follows: the two quarters through Q2 2020 had seen a one-third selling at prices between ~$203 and ~$345. There was another ~50% reduction this quarter at prices between ~$316 and ~$384. The stock currently trades at ~$367.Visa Inc. (V): Visa is a now a small 0.72% of the portfolio stake. It is a very long-term position first purchased soon after the IPO in 2008. The position was sold down consistently since Q1 2018. That quarter saw a ~30% selling at prices between $114 and $126 and that was followed with a ~22% selling in Q3 2018 at prices between $131 and $151. Q3 2019 saw another ~40% selling at prices between $169 and $186. There was a ~55% selling over the last five quarters at prices between ~$136 and ~$226. The stock is now at ~$230.Kept Steady:None.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q1 2021:Source: John Vincent. Data constructed from Ruane, Cunniff, & Goldfarb's 13F filings for Q4 2020 and Q1 2021.Quarterly Factsheet and Q4 2020 Letter: Performance: 23.33% for 2020 vs 18.40% for the S&P 500 index. 13.77% vs 11.19% since 1970 inception. Cash: ~2%. Increased: Credit Acceptance, Formula One, Taiwan Semi, and UnitedHealth . Trimmed: Alphabet, Berkshire, Constellation, and MasterCard. Sold: Amazon, Booking Holdings, and Melrose. New: Fidelity National Information Services, Intercontinental Exchange, Disney, Netflix, and Taiwan Semi. Commentary: ICE & FIS are enabling businesses to transform from analog to digital and so grows faster than the industries they serve. Also products are sticky. Disney & Netflix – bets on the global trend toward subscription-based streaming video consumption – believes the leaders of the video entertainment industry’s streaming era will be far larger and more profitable than those of the cable era – we took positions despite the recent stock performance because they believed they were still discounted. TSM – similar thesis as for streaming war leaders – fabs are capital intensive (~$10B per facility) and the leader naturally has a strong moat – gigantic profit margins as they produce the most important manufactured component in the modern economy. Main concern is geopolitical risks. FWONK – thinks it made major strides toward improving the entertainment appeal of a sports league that we consider one of the most unique and under-monetized media assets in the world.Regulatory filings thru 3/14/2021: 13G/As – 2/16 – W – 1.79M shares – 2.46% of business, Formula One – FWONK -10.6M shares – 5.19% of business, CACC -  1.6M shares – 9.08% of business,"