"Tracking Tweedy Browne Portfolio – Q2 2021 Update"
"Tweedy Browne’s 13F portfolio value increased from $3.44B to $3.56B this quarter.They increased Alibaba Group Holdings and Fresenius Medical Care while reducing Bank of New York Mellon during the quarter.Alphabet Inc. at ~17% of the portfolio is the largest position.This article is part of a series that provides an ongoing analysis of the changes made to Tweedy Browne’s 13F portfolio on a quarterly basis. It is based on Tweedy Browne’s regulatory  filed on 8/12/2021. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q1 2021.This quarter, Tweedy Browne’s 13F portfolio value increased ~4% from $3.44B to $3.56B. The number of holdings remained steady at 46. The largest position by far is Alphabet at ~17% of the portfolio. The largest five individual stock positions are Alphabet, Berkshire Hathaway, Alibaba Group Holdings, Johnson & Johnson, and Baidu. Combined they are at ~53% of the portfolio. 30 of the 46 13F stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.Tweedy Browne has released a number of  over the years and that is a valuable resource for anyone looking to learn from their value investing philosophy. Also, Christopher Browne authored the book “”, a great introduction.Note: Tweedy Browne’s flagship Tweedy Browne International Value Fund (TBGVX) has a global orientation with non-US allocation at ~84% of the portfolio and cash at ~4%. The top five holdings are Nestle (NSRGY), Diageo plc (DEO), CNH Industrial (CNHI), Roche Holding (RHHBY), and Heineken (HKHHF). Together, they are at ~20% of the fund. Per Q2 2021 Commentary, the fund returned 12.68% for YTD through Q2 2021 compared to 12.94% for MSCI EAFE. Since inception (1993), annualized returns are at 8.94% compared to 6.51% for MSCI EAFE.New Stakes:None.Stake Disposals:None.Stake Increases:Alibaba Group Holdings (BABA): BABA is a large (top three) 9.86% of the portfolio stake established in Q4 2020 at prices between ~$222 and ~$317 and increased by two-thirds next quarter at prices between ~$225 and ~$271. There was a ~40% further increase this quarter at prices between ~$206 and ~$244. The stock currently trades well below the low end of those ranges at ~$172.Fresenius Medical Care (FMS): FMS is a small 0.71% of the portfolio stake established last quarter at prices between ~$34 and ~$43. There was a ~14% stake increase this quarter at prices between ~$36.70 and ~$42. The stock currently trades at ~$40.50Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F stake at ~17% of the portfolio. It was first purchased in 2012 at much lower prices compared to the current price of ~$2731. Q3 2016 saw a ~9% trimming at prices between $692 and $787. Since then, the activity has been minor.Berkshire Hathaway (BRK.A) (BRK.B): Berkshire Hathaway is a very long-term stake that has been in the portfolio since before the financial crisis. It is currently their second-largest position at ~14% of the portfolio. Back in 2009, it was a very small 0.60% of the portfolio position. The bulk of the current stake was purchased in 2010 and 2012 at prices between $65 and $90. Q3 2016 saw a ~42% reduction at prices between $142 and $151 while the pattern reversed next quarter: ~37% increase at prices between $143 and $167. Last four quarters have seen a ~13% selling at prices between ~$200 and ~$292. The stock currently trades at ~$286.Johnson & Johnson (JNJ): JNJ is a large (top five) position in the portfolio at ~8%. It is a long-term stake. The position was built from 400K shares to just over 4.3M shares between 2009 and 2012 at prices between $48 and $72. Since then, the stake has seen minor selling in most quarters. Q4 2016 saw a ~20% reduction at prices between $111 and $120. The share count is now at ~1.73M. The stock currently trades at ~$177. Tweedy Browne is harvesting long-term gains from this position.Baidu Inc. (BIDU): BIDU is a large (top five) 5.58% portfolio stake purchased in Q1 2017 at prices between $168 and $186. The position was increased by roughly two-thirds in Q2 2019 at prices between $108 and $185. Next quarter saw an about turn: 40% selling at prices between $94 and $119. Since then, the activity had been minor. Last quarter saw a ~30% reduction at prices between ~$204 and ~$340. The stock is now at ~$143. There was marginal trimming this quarter.Cisco Systems (CSCO): CSCO position was first purchased in 2011. It is currently a 5.29% of the portfolio stake. The bulk of the position was purchased in 2012 at prices between $15.50 and $21. Q1 2016 saw a ~45% stake increase at prices between $22.50 and $28.50. The three years thru Q1 2019 saw a ~44% reduction at prices between $41 and $54. Next quarter saw another ~25% selling at prices between $51 and $57.50. Last two quarters also saw a one-third selling at prices between ~$44 and ~$55. The stock currently trades at ~$55. They are harvesting gains.Coca Cola FEMSA (KOF): The 4.17% KOF stake was built over the three quarters thru Q2 2020 at prices between $38 and $65. Since then, the activity has been minor. The stock currently trades at ~$58.Note: Tweedy Browne has a ~5% ownership stake in the business.AutoZone (AZO): AZO is a 3.68% position purchased in Q3 2017 at prices between $493 and $595 and increased by ~75% in Q2 2018 at prices between $596 and $693. The stock currently trades well above those ranges at ~$1614. Q1 2019 saw a one-third selling at prices between $810 and $1000 and that was followed with a ~11% trimming next quarter. Last two years have also seen minor selling. Tweedy Browne is harvesting gains.Autoliv Inc. (ALV): The ~3% ALV position was established in Q1 2020 at prices between ~$40 and ~$82 and the stock currently trades at ~$95. Last four quarters have seen minor trimming.Wells Fargo (WFC): WFC is a 2.87% of the 13F portfolio position. The initial stake was established in 2010 with the bulk of the current position purchased in 2011 at prices between $25 and $34. H2 2016 saw a ~30% reduction at prices between $44 and $58. The next two years had also seen minor selling. Q1 2019 saw a ~15% further reduction at prices between $46 and $52. Last nine quarters have seen another ~15% trimming at prices between ~$21.50 and ~$54.50. The stock is now at ~$48.Bank of New York Mellon (BK): BK is a 2.74% stake first purchased in 2010 in the mid-20s price range. Q1 2016 saw a ~40% stake increase at prices between $32.50 and $38. There was a ~11% selling in Q3 2016 at prices between $37 and $42. Since then the activity had been minor. Last three quarters saw a ~50% reduction at prices between ~$34 and ~$52. The stock currently trades at $53.53.Bank of America (BAC), Truist Financial (TFC), Carlisle Companies (CSL), and Intel Corp (INTC): These four positions were built in H2 2020. BAC is a 2.24% of the portfolio position established at prices between ~$23 and ~$30 and it is now at $40.79. The 1.32% TFC stake was purchased at prices between ~$33.50 and ~$49 and the stock currently trades at $55.56.  The 1.20% of the portfolio CSL position was purchased at prices between ~$113 and ~$196 and the stock currently trades at ~$205. INTC is a ~1% of the portfolio stake established at prices between ~$44 and ~$61 and it is now at ~$52.Fox Corporation (FOX): The FOX stake was a minutely small position established in Q2 2019. Next quarter saw the stake built at prices between $31.50 and $38. There was a ~15% stake increase in Q4 2019 and that was followed with a ~72% increase next quarter at prices between ~$20 and ~$38.50. Since then, the activity has been minor. The stock currently trades at $33.81 and the stake is at 2.23% of the portfolio.Note: Tweedy Browne’s Q3 2020 commentary said that they purchased FOX at a price estimated to be at 8% earnings yield. Also, they mentioned the focus on live programming, profitability of Fox News, and insider buying as attractive attributes.3M Company (MMM): MMM is a ~2% long-term stake first purchased in 2008 at low prices. The five quarters thru Q2 2017 had seen a combined ~46% reduction at prices between $165 and $213. There was a ~8% selling in Q4 2017 and that was followed with a ~18% reduction next quarter at prices between $215 and $259. The five quarters thru Q3 2019 had also seen a ~15% combined selling at prices between $160 and $220. Q1 2020 saw a ~12% stake increase while last five quarters have seen a ~10% trimming. The stock is now at ~$197.US Bancorp (USB): The 1.81% USB position had seen a ~45% increase over the first three quarters of 2020 at prices between ~$29 and ~$59. The stock is now at ~$56. There was a ~6% trimming in the last three quarters.Comcast Corporation (CMCSA): CMCSA is a very long-term stake that has been in the portfolio since before the financial crisis. Recent activity follows: There was a two-thirds reduction in Q4 2017 at prices between $35 and $41. Q4 2018 also saw a ~23% selling at prices between $33 and $39.50. Q2 2020 saw an about turn: ~140% stake increase at prices between $32.50 and $43. The stock is now at ~$59 and the stake is at 1.80%. Last four quarters have seen only minor adjustments.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February 2017.AbbVie Inc. (ABBV): ABBV is a 1.24% of the portfolio position established in Q2 2020 at prices between $73 and $99 and it is now at ~$117. Q3 2020 saw a ~50% stake increase at prices between ~$86 and ~$101. That was followed with a ~30% increase next quarter at prices between ~$81 and ~$109. Last two quarters have seen only minor adjustments.ConocoPhillips (COP): COP was a 1.6M share stake built in 2009 at prices between $22 and $40. The position had seen minor trimming since 2016. Q3 2020 saw the stake reduced to a minutely small position at prices between $32.50 and $42. The stock currently trades at $55.53. Last three quarters have seen further selling.Note: The figures quoted above are adjusted for the May 1, 2012 COP spinoff of Phillips 66 whereby COP shareholders received one share of Phillips 66 for every 2 shares of COP.Emerson Electric (EMR): EMR is a long-term 0.80% stake. The position was first purchased in 2008 and doubled the following year at a cost-basis in the low-30s. Around 40% of that original position was sold in 2010 in the low-50s price-range. It has since been further reduced. Q4 2016 saw a ~20% selling at prices between $49 and $58 and that was followed with a ~20% reduction in 2017 at prices between $56 and $70. Next year saw another ~35% selling at prices between $55 and $80. Last two years had also seen minor trimming. This quarter saw a ~45% reduction at prices between ~$90 and ~$99. The stock currently trades at ~$102.Morgan Stanley (MS): The small 0.73% MS stake was purchased in Q2 2020 at prices between $31.50 and $50.50 and the stock currently trades at ~$101. There was a ~30% selling this quarter at prices between ~$77 and ~$94.American Express (AXP), CNH Industrial (CNHI), Diageo plc (DEO), Union Pacific (UNP), Unilever (UN) (UL), and Verizon Communications (VZ): These small positions (less than ~1.5% of the 13F portfolio each) were reduced during the quarter.Note: Although the 13F position is small, the firm has a large stake in Diageo held in LSE.The spreadsheet below highlights changes to Tweedy Browne’s 13F stock holdings in Q2 2021:Source: John Vincent. Data constructed from Tweedy Browne's 13F filings for Q1 2021 and Q2 2021.Info from Commentary – Q1 2021: PERFORMANCE – Flagship Global Value Fund - TBGVX – 7.14% vs 7.63% for MSCI EAFE (hedged to USD) for 2020 – from 1993 inception 8.83% vs 6.39%. ACTIVITY IN GLOBAL VALUE & VALUE FUNDS: ADDS: Fresenius, Industrias Bachoco, Concentrix, and Progressive. EXITS: Ebara, Goldman Sachs, Yamaha Motor, and Zeon. INCREASED – A-Living Smart city Services, Dali Foods, Megacable, Orange, Alibaba, Okamoto, and Rubis. Commentary – bullish thesis on Fresenius SE – bought at 10x EV/EBITA which they think is at ~70% of estimated value and Progressive – paid between $85 and $87 (15x 2021 operating earnings). Thinks have clear competitive advantages: direct distribution and superior data analytics.Regulatory filings thru 5/12/2021: None."