"Tracking John Rogers’ Ariel Investments Portfolio – Q1 2022 Update"
"Ariel Investments’ 13F portfolio value decreased from $11.86B to $11.27B this quarter.They increased Gentex, Resideo Technologies, and Boyd Gaming while reducing Progressive Corp and Berkshire Hathaway.The top three positions are Madison Square Garden Entertainment, Mattel, and Baidu, and they add up to ~11% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Ariel Investments’ 13F stock portfolio on a quarterly basis. It is based on Ariel Investments’ regulatory  filed on 5/13/2022. John Rogers’ 13F portfolio value decreased ~5% from $11.86B to $11.27B this quarter. The portfolio is diversified with recent 13F reports showing around 150 positions. There are 60 securities that are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five stakes are Madison Square Garden Entertainment, Mattel, Baidu, Philip Morris, and Microsoft. They add up to ~17% of the portfolio. Please visit our  Portfolio series to get an idea of their investment philosophy and our  for the fund’s moves during Q4 2021.Their flagship mutual fund is the Ariel Fund (ARGFX) incepted in 1986. Ariel Fund has a lifetime annualized return of 11.25% compared to 10.91% for the Russell 2500 Index and 11.02% for the S&P 500 Index. In the most recent 10-year period, it has underperformed the S&P index: 12.23% vs 14.64%. The other mutual funds in the group are Ariel Appreciation Fund (CAAPX), Ariel Focus Fund (ARFFX), Ariel International Fund (AINTX), and Ariel Global Fund (AGLOX).Note: Some of the top holdings in their International and Global funds are not in the 13F report as they are not 13F securities. They are Roche Holding AG (RHHBY), Deutsche Boerse AG (DBOEY), Endesa SA (ELEZF), Nintendo Company (NTDOY), Michelin (MGDDY), Koninklijke Ahold Delhaize (ADRNY), and Snam SpA (SNMRY).Stake Disposals:Tegna Inc. (TGNA): The small 1.46% stake in TGNA was disposed this quarter.Note: Standard General is acquiring Tegna in a $24 per share all-cash-deal announced in February.Stake Increases:Baidu Inc. (BIDU): BIDU is currently the third-largest position at ~3% of the portfolio. It was established in 2013 with the bulk of the current position purchased in 2015 at prices between ~$134 and ~$234. The interim years had seen minor buying and in 2018 there was a ~25% increase at prices between $157 and $273. Q1 to Q3 2019 saw another one-third increase at prices between ~$97 and ~$142. H1 2020 had seen a ~50% stake increase at prices between ~$84 and ~$145. Q1 2021 saw a ~18% selling at prices between ~$204 and ~$340 while in Q3 2021 there was a ~12% stake increase at prices between ~$137 and ~$202. The stock currently trades at ~$143. This quarter also saw a ~9% increase.Microsoft Corp (MSFT): MSFT is now at 2.75% of the 13F portfolio. It was a very small stake first purchased in 2010. The 2013-2015 timeframe saw a 2.2M share build-up at prices between ~$26 and ~$56. Recent activity follows: 2019 had seen a ~22% reduction at prices between ~$100 and $160. Last two years saw another ~50% selling at prices between ~$137 and ~$343. The stock currently trades at ~$253. They are harvesting gains. There was a marginal increase this quarter.Lazard Ltd. (LAZ): LAZ is a 2.62% of the portfolio position first purchased in 2009 at prices between ~$19 and ~$38. Next year saw a stake-tripling at prices between ~$25 and ~$36. The interim period saw further buying but in 2014 there was a ~25% selling at prices between ~$39 and ~$50. Recent activity follows. 2019 saw a ~15% increase at prices between ~$31 and ~$40.50. The three quarters through Q3 2021 saw another ~45% stake increase at prices between $38.70 and $48.75. The stock is now at $31.34. Last two quarters have also seen minor increases.Note: Ariel Investments have a ~7% ownership stake in Lazard.Kennametal Inc. (KMT): KMT is a 2.46% of the portfolio position. It was established in 2014 at prices between $34 and $52. The position had seen minor buying over the years. Q1 2020 saw a ~15% stake increase at prices between $15 and $37. The three quarters through Q3 2021 had seen another ~43% stake increase at prices between ~$33 and ~$42. The stock currently trades at $22.93. Last two quarters have also seen minor increases.Note: Ariel Investments has a ~11% ownership stake in Kennametal Inc.Jones Lang LaSalle (JLL): The 2.41% JLL position is a very long-term stake first purchased in 2001. Next year saw a huge stake build-up at prices between ~$14.50 and ~$25. The position has seen selling since 2004. The bulk of the selling happened in 2006 at prices between ~$55 and ~$93. Most years since have also seen selling. H2 2020 saw a ~25% stake increase at prices between ~$90 and ~$154. The stock currently trades at ~$170. Last several quarters have seen only minor adjustments.Core Laboratories (CLB): The 2.30% CLB stake was purchased in H2 2021 at prices between ~$22 and ~$44 and the stock currently trades below that range at $19.85. This quarter also saw a ~5% stake increase.Note: They have ~18% ownership stake in the business.Stericycle Inc. (SRCL): SRCL is a 2.27% of the portfolio position established in Q1 2018 at prices between ~$58 and ~$76. The bulk of the current stake was purchased in H2 2018 at prices between ~$36.50 and ~$71. Q1 2021 saw a ~20% stake increase at prices between ~$65 and ~$72.50. Since then, the activity has been minor. The stock currently trades at $40.90.Northern Trust (NTRS): NTRS is a 2.14% very long-term position first purchased in 2002. The 2002-2004 timeframe saw a ~10M share stake built at prices between ~$30 and ~$60. The position has since been sold down. The bulk of the selling was in the 2005-2007 timeframe at prices between ~$42 and ~$81. Last few quarters have seen minor increases. The stock currently trades at $93.36.Manchester United (MANU) and Gentex Corp (GNTX): These two positions purchased in Q3 2021 were increased over the last two quarters. MANU is a 1.58% of the portfolio position established at prices between ~$12.25 and ~$20.50 and the stock currently trades below that range at $11.50 The 2.12% GNTX stake was purchased at prices between ~$27.50 and ~$38 and the stock currently trades near the low end of that range at $27.97.Note: They have a ~24% ownership stake in Manchester United.Snap-On Inc. (SNA): SNA is a ~2% of the portfolio stake purchased in 2012 at prices between ~$52 and ~$80. Next year saw a ~50% stake increase at prices between ~$80 and ~$110. The stock currently trades at ~$197. Last several years have seen only minor adjustments.Mohawk Industries (MHK): MHK is  a ~2% of the portfolio position built over the last three years at prices between ~$59 and ~$230 and it is now at ~$123.Adtalem Global Education (ATGE), Affiliated Managers Group (AMG), Axalta Coating (AXTA), Amdocs Ltd. (DOX), BorgWarner Inc. (BWA),Boyd Gaming (BYD), Brink’s Co (BCO), Charles River Laboratories (CRL), Charles Schwab (SCHW), Equity Commonwealth (EQC), Gilead Sciences (GILD), Goldman Sachs (GS), Janus Henderson Group (JHG), Keysight Technologies (KEYS), Masco Corp. (MAS), Johnson & Johnson (JNJ), KKR & Company (KKR), Laboratory Corp (LH), Littelfuse Inc. (LFUS), Madison Square Garden Sports (MSGS), Norwegian Cruise Line Holdings (NCLH), nVent Electric (NVT), OneSpaWorld Holdings (OSW), Paramount Global (PARA) previously ViacomCBS, Resideo Technologies (REZI), Royal Caribbean Cruises Ltd. (RCL), and Stanley Black & Decker (SWK): These small (less than ~2% of the portfolio each) stakes were increased this quarter.Note: Ariel Investments has significant ownership stakes in the following businesses: Adtalem Global Education, Madison Square Garden Sports, and OneSpa World Holdings.Stake Decreases:Madison Square Garden Entertainment (MSGE): MSGE is currently the largest 13F stake at 4.49% of the portfolio. It was built over the last seven quarters at prices between ~$64 and ~$116. The stock currently trades below that range at ~$52.97. There was a marginal reduction this quarter.Note: Ariel Investments has a ~23% ownership stake in Madison Square Garden Entertainment.Mattel Inc. (MAT): The 3.49% MAT position was first purchased in 2016 at prices between ~$25 and ~$34. Next year saw a stake doubling at prices between ~$13 and ~$30.50. 2018 also saw a one-third stake increase at prices between ~$9.50 and ~$18. Q1 2019 saw a ~12% trimming while the next two quarters saw a one-third increase at prices between ~$9.50 and ~$14.50. Q1 2020 saw another ~15% stake increase at prices between $7.25 and $14.75. Last two quarters had also seen a ~17% increase at prices between ~$18 and ~$23. The stock currently trades at $22.10. This quarter saw a ~3% trimming.Note: They have ~5% ownership stake in the business.Philip Morris (PM): A very small position in PM was first purchased in 2013. By 2017, the stake was built to a ~1M share stake. Next year saw the position increased by ~220% at prices between $66 and $110. 2019 had seen another ~20% stake increase at prices between $70 and $91. The three quarters through Q3 2020 had also seen a ~20% stake increase. Q1 2021 saw another ~15% stake increase at prices between ~$79 and ~$91 while next quarter there was a ~20% selling at prices between ~$88 and ~$101. The stock currently trades at ~$99, and it is currently at ~3% of the portfolio. Last three quarters have seen only minor adjustments.BOK Financial (BOKF): The 2.74% BOKF stake was built over the last three years at prices between ~$37 and ~$116. The stock currently trades at $76.28.Envista Holdings (NVST): The 2.49% NVST stake was purchased in Q1 2020 at prices between ~$12 and ~$33. There was a ~75% stake increase next quarter at prices between ~$13 and ~$24.50. The stock currently trades at $36.30. Last seven quarters have seen only minor adjustments.First American Financial (FAF): FAF is a 2.36% of the portfolio stake established in 2011 at prices between ~$11 and ~$17. 2013 also saw a ~25% stake increase at prices between ~$21 and ~$28. The position has seen consistent reductions since 2015. Recent activity follows: 2019 had seen a ~20% selling at prices between ~$45 and ~$64. There was a ~25% stake increase in Q4 2020 at prices between ~$44.50 and ~$54.50. That was followed with a similar increase in Q1 2021 at prices between ~$51 and ~$58. This quarter saw a ~15% selling at prices between ~$64 and ~$81. The stock is now at ~$50.Interpublic Group (IPG): The 2.35% IPG stake is a very long-term position that goes back almost two decades. It was first purchased in 2001 and the position was built to over 41M shares by 2005 at prices between $9 and $42. Recent activity follows: 2018 saw a ~20% selling at prices between $20 and $25 while next year saw a ~40% stake increase at prices between $19.50 and $24. There was a ~25% selling over the last three quarters at prices between ~$31 and ~$39.50. The stock currently trades at $27.23.Credicorp Ltd. (BAP): BAP is a 2.30% of the portfolio position built over the last three quarters at prices between ~$92 and ~$178. The stock currently trades at ~$125. There was a minor ~2% trimming this quarter.Nielsen Holdings (NLSN): The 1.63% NLSN stake was purchased in 2017 at prices between ~$36 and ~$45. Next year saw a ~60% stake increase at prices between $22 and $37.50 and that was followed with a ~45% further increase in 2019 at prices between $19.50 and $27. Q4 2020 saw a similar increase at prices between ~$13.50 and ~$21. Last four quarters had seen another ~50% increase at prices between ~$19.50 and ~$28. There was a ~60% selling this quarter at prices between ~$16.50 and ~$27. The stock currently trades at ~$23.Note: In March, Nielsen Holdings entered into an agreement to be acquired by a consortium led by Evergreen and Brookfield for $28 per share cash.J M Smucker (SJM): SJM is a very long-term stake that has been in the portfolio for well over a decade. The original huge stake was sold down in 2008. Q1 2020 saw another ~30% selling at prices between ~$96 and ~$119. Q1 2021 saw a ~40% stake increase at prices between ~$111 and ~$131. There was a ~14% trimming this quarter. The stock currently trades at ~$124 and the stake is at 1.53% of the portfolio.ADT Inc. (ADT): ADT is a 1.37% of the portfolio position purchased over the two quarters through Q3 2021 at prices between ~$8.50 and ~$11.50 and the stock currently trades below that range at $6.18. This quarter saw a ~17% selling at prices between ~$7 and ~$8.65.Aflac Inc. (AFL), Berkshire Hathaway (BRK.B), CBRE Group (CBRE), Check Point Software (CHKP), Knowles Corp (KN), Progressive Corporation (PGR), Simpson Manufacturing (SSD), Trip.com (TRIP), and Walgreens Boots Alliance (WBA): These small (less than 1.5% of the portfolio each) stakes were reduced during the quarter.Note: Ariel Investments has a significant ownership stake in Knowles Corp.Below is a spreadsheet that shows the changes to John Rogers’ Ariel Investments 13F portfolio holdings as of Q1 2022:Source: John Vincent. Data constructed from Ariel Investments’ 13F filings for Q4 2021 and Q1 2022.Regulatory filings from 12/10/2021 to 3/1/2022: 13G/As – 2/14 – MAT – 18.28M shares – 5.2% of business, SLCA – US Silica Holdings – 1.91M shares – 2.6% of business, OSW – OneSpa World – 14.72M shares – 19.8% of business, MSGS – 1.07M shares – 5.4% of business, MSGE – 6.17M shares – 22.6% of business, MANU – 10.93M shares – 20.7% of business, LAZ – 8.12M shares – 7.2% of business, KN – Knowles Corp – 2.83M shares – 3.1% of business, KMT – 8.92M shares – 10.7% of business, CLB – Core Laboratories – 7.8M shares – 16.9% of business. 13G – 1/10 – ADTE – Adtalem Global Education – 5.03M shares – 10.1% of business ."