"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q2 2018 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased from $10.91B to $11.16B. The number of positions increased from 59 to 62.They increased Altaba & Berkshire Hathaway while decreasing Amazon, Omnicom, and Primerica.The top three positions are Alphabet, Berkshire Hathaway, and CarMax and they add up to ~35% 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 08/14/2018. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q1 2018.This quarter, Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased ~2% from $10.91B to $11.16B. The number of holdings increased from 59 to 62. 25 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 ~35% while the top five are at ~47% of the 13F assets: Alphabet, Berkshire Hathaway, CarMax, Amazon.com, and Liberty Media Formula One.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable 48-year track record (July 15, 1970 inception, ~13.5% annualized return compared to ~11% for the S&P 500 index). In Q2 2018, the fund was up 5.8% compared to 3.43% for the S&P 500 index. Last year, it slightly underperformed S&P 500 - ~20% vs ~22% for the S&P 500 index. Their cash-allocation is currently at ~7%. After new management took over in Q1 2016, the portfolio has seen a significant shift to information & services businesses from asset-intensive manufacturing & retail. 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), and Naspers (NPSNY).  The latter two are new as of Q1 2018.Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .Stake Disposals:Capital One Financial (COF): COF was a very small 1.38% position purchased in Q4 2016 at prices between $71 and $91. Q1 2017 saw a one-third increase at prices between $82 and $96. The position was eliminated this quarter at prices between $88 and $98. The stock currently trades at $99.85.58.com Inc. (WUBA) and Wayfair Inc. (W): These very small (less than ~0.7% of the portfolio each) stakes were disposed during the quarter.New Stakes:GTT Communications (GTT): GTT is a very small 0.69% of the portfolio stake established this quarter at prices between $44 and $57 and the stock currently trades well below that range at $39.50.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is the largest 13F stake at ~17% 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 follow: Q2 2017 saw a ~15% increase at prices between $823 and $984 and that was followed with a two-thirds increase in the following quarter at prices between $899 and $980. There was another ~20% increase over the last two quarters at prices between $951 and $1176. The stock is now at ~$1187. This quarter saw a ~6% trimming.Note: Their Q4 2017 letter covered Alphabet. At the time, they believed Alphabet & Amazon.com as some of the best businesses the world has ever seen. However, earnings are masked by growth spending.CarMax Inc. (KMX): KMX is a 7.80% of the portfolio position. 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 last quarter there was a ~80% increase at prices between $59 and $72. The stock is now at $78.86. This quarter saw marginal trimming.Note: They have a ~7% ownership stake in the business.Amazon.com Inc. (AMZN): AMZN is a top five 7.35% portfolio stake established in Q4 2016 at prices between $719 and $845. The stock is now at $1995. There was a ~9% trimming in Q2 2017 at prices between $885 and $1011. Q4 2017 saw the stake almost doubled at prices between $957 and $1196. There was a ~14% selling last quarter at prices between $1189 and $1598 and that was followed with a ~29% reduction this quarter at prices between $1372 and $1750. They are realizing gains.TJX Companies (TJX): TJX is a fairly large ~5% of the portfolio position.  It is a very long-term stake and the holding period is over 15 years. The stock has seen a ~15x return over that timeframe. 2015 had seen significant selling: one-third reduction at prices between $64 and $73. The pattern continued in 2016: ~45% reduction at prices between $67.50 and $83. The stock is now at $111. There was a ~17% selling in Q3 2017 at prices between $67 and $74 and that was followed with a ~22% reduction last quarter at prices between $74 and $84. Ruane is continuing to harvest huge long-term gains. This quarter saw marginal trimming.MasterCard Inc. (MA): MA is a large ~5% 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 follow: There was a ~15% selling in Q3 2017 at prices between $121 and $143 and that was followed with a ~27% reduction last quarter at prices between $152 and $183. The stock is now at $211. Ruane is harvesting gains. There was marginal trimming this quarter.Fiat Chrysler Auto (FCAU): The 4.15% FCAU position was purchased in Q1 2017 at prices between $9.50 and $11.60 and doubled the following quarter at prices between $9.70 and $11.65. There was another ~25% increase in Q3 2017 at prices between $10.50 and $18. The stock is now at $16.96. Last three quarters have seen marginal trimming.Charles Schwab (SCHW): SCHW is a medium sized 3.78% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. There have only been minor adjustments since. The stock is now at $50.52.Booking Holdings (BKNG): The 3.16% of the portfolio stake in BKNG was purchased in Q1 2017 at prices between $1477 and $1789 and increased by ~40% the following quarter at prices between $1738 and $1911. The stock currently trades at $1892. There was marginal trimming this quarter.Mohawk Industries (MHK): MHK is a very long-term 2.65% of the portfolio position first purchased in 2001. The stake became a significantly large position in Q3 2002 when close to 10M shares were purchased at a cost-basis of around $50. The position was reduced by around two-thirds in the 2012-13 timeframe at progressively higher prices. Recent activity follow: Q4 2016 saw a ~25% selling at prices between $177 and $205 and that was followed with another ~28% reduction in the following quarter at prices between $201 and $232. The stock is currently at $191. Last four quarters have seen only very minor activity.JD.com (JD): The 2.10% JD position was first purchased in Q1 2016. The stake has wavered. Recent activity follow: Q3 2017 saw a one-third increase at prices between $38 and $48 and that was followed with a two-thirds increase in the following quarter at prices between $36.75 and $43. The stock is now at $26.30. This quarter saw a ~10% selling at prices between $35 and $44.Wells Fargo (WFC): WFC was a minutely small position as of Q1 2016. Over 5M shares were purchased the following quarter at a cost-basis of ~$51. There was another one-third increase in Q3 2017 at prices between $49.50 and $56. Last quarter saw a ~36% reduction at prices between $51 and $66. The stock currently trades at $58.95 and it is at ~2% of the portfolio.  There was marginal selling this quarter.Omnicom Group (OMC): OMC is now a minutely small 0.01% stake. The original position was from 2011 at prices between $36 and $50. It saw a ~80% increase in Q2 2017 at prices between $80 and $86 while last quarter saw a ~50% reduction at prices between $70 and $83. The position was almost eliminated this quarter at prices between $70 and $76 and the stock is now at $68.70.Primerica Inc. (PRI): The very small 0.83% PRI stake was almost eliminated this quarter.Stake Increases:Berkshire Hathaway (BRK.A) (BRK.B): BRK.B is the second-largest position at ~10% of the portfolio. It is a very long-term stake that was already their largest stake in their first 13F filing in 1999. Recent activity follow:  Q1 2017 saw a ~30% selling at prices between $159 and $177. The following quarter also saw a ~20% reduction at prices between $161 and $172. Last quarter saw another one-third selling at prices between $191 and $217. The pattern reversed this quarter: ~10% increase at prices between $185 and $201. The stock is now at ~$212.Liberty Media Formula One (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 position is now at 5.10% of the portfolio. The stock is now at $35.08. Last two quarters have seen very minor increases.Note: they have a ~7.5% ownership stake in Liberty Media Formula One.Facebook Inc. (FB): The FB position saw a whopping ~600% stake increase last quarter at prices between $152 and $193. The position is now a medium-sized stake at 4.27% of the portfolio. The stock currently trades at $167. This quarter also saw a ~12% further increase.Jacobs Engineering Group (JEC): JEC is a 3.69% long-term stake first purchased in 2012. Last major activity was in Q3 2015 when there was a ~50% stake increase at prices between $37 and $44. The stock is now at $72.68. This quarter saw a ~20% increase at prices between $56.50 and $67.Credit Acceptance Corp. (CACC): CACC is a 3.48% stake established in Q1 2017 at prices between $185 and $221 and increased by ~12% the following quarter at prices between $186 and $263. It currently goes for $445. There was a marginal increase this quarter.Note: They have a ~5.5% ownership stake in Credit Acceptance Corp.Liberty Broadband (LBRDK) and Altaba Inc. (AABA): These two positions were established last quarter and increased this quarter. LBRDK is a 3.16% portfolio position purchased at prices between $86 and $97 and increased by ~20% this quarter at prices between $69 and $85. The stock currently trades at $80.76. The 2.63% AABA stake was established at prices between $69 and $80 and increased by around one-third this quarter at prices between $67.50 and $82. It is now below those ranges at $65.65. For investors attempting to follow Ruane, LBRDK & AABA are good options to consider for further research.Visa Inc. (V): The 2.46% Visa stake saw a 53% increase in Q2 2017 at prices between $89 and $97 and that was followed with a ~13% increase in the following quarter. The stock is now at ~$143. It is a very long-term stake first purchased soon after the IPO in 2008. There was a ~30% selling last quarter at prices between $114 and $126. This quarter saw a marginal increase.Builders FirstSource (BLDR) and Sinclair Broadcast (SBGI): These two very small (less than ~1% of the portfolio each) stakes saw increases this quarter.Note: They have a ~7% ownership stake in BLDR.Kept Steady:BMC Stock Holdings (BMCH): BMCH is a very small 0.75% portfolio position that was kept steady this quarter.Note: They have a ~6% ownership stake in BMC Stock Holdings.As a percentage of the portfolio, the remaining positions are all below 0.5% of the portfolio each and so have limited portfolio performance impact.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q2 2018:– it has a nice graphic on holding periods of the top-ten holdings among other interesting stuff. The big change in the last few years is the shift to internet stocks spear-headed with Google.: Performance: Q1 2018 1.28% vs negative 0.76% for S&P 500 Index. 22 positions, TRIMMED: Berkshire Hathaway, Constellation Software, Jacobs Engineering, MasterCard, TJX, and Wells Fargo, EXITS: Chipotle, Dentsply Sirona, O’Reilly Auto, and Waters, NEW: Vivendi, Naspers, Liberty Broadband, and Facebook, Increased: Alphabet & Carmax.Regulatory Filings thru 5/28/2018: None.5/28/2018: a reader pointed out that the link for “13F Form” was pointing to an empty stub. It appears the 13F report was moved to be “Ruane, Cunniff, & Goldfarb L.P.” – it was under “Ruane, Cunniff, & Goldfarb Inc.” previously. I have corrected the link in the article (the link in this doc is also now corrected)."