"Tracking William Nygren’s Harris Associates Portfolio – Q3 2020 Update"
"Harris Associates’ 13F portfolio value decreased marginally from $41.11B to $41.07B this quarter.They increased Automatic Data Processing and added Keurig Dr. Pepper while reducing Pinterest and CoreLogic.The top three positions are Alphabet, Bank of America, and Charter Communications and they add up to ~16% of the portfolio.This article part of a series that provides an ongoing analysis of the changes made to Harris Associates 13F stock portfolio on a quarterly basis. It is based on Harris Associates’ regulatory  filed on 11/16/2020. William Nygren’s 13F portfolio value decreased marginally from $41.11B to $41.07B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions. There are 61 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 Alphabet, Bank of America, Charter Communications, TE Connectivity, and General Motors. They add up to ~23% of the portfolio. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q2 2020.Harris Associates currently has ~$86B under management. Their flag ship mutual funds are the Oakmark Fund (OAKMX) incepted in 1991 and the Oakmark International (OAKIX) incepted in 1992. Both funds have produced substantial alpha during their lifetimes: 11.77% annualized return compared to 9.94% for the S&P 500 index for OAKMX and 8.26% annualized return for OAKIX compared to 5.63% annualized for the MSCI World ex-US Index. The other mutual funds in the group are Oakmark Select (OAKLX), Oakmark Equity and Income (OAKBX), Oakmark Global (OAKGX), Oakmark Global Select (OAKWX), and Oakmark International Small Cap (OAKEX).Note: The top holdings in the Oakmark International Fund are not in the 13F report as they are not 13F securities. The positions are BNP Paribas (BNPQF), Glencore (GLCNF), Lloyds Banking Group (LYG), Daimler (DDAIF), Intesa Sanpaolo (ISNPY), CNH Industrial (CNHI), Credit Suisse Group (CS), BMW (BMWYY), Continental (CTTAF), and Naspers (NPSNY).New Stakes:Keurig Dr. Pepper (KDP): KDP is a 1.19% of the portfolio position established this quarter at prices between ~$27 and ~$31 and the stock currently trades at ~$32.Stake Increases:HCA Healthcare (HCA): HCA is now a 2.80% of the portfolio stake. A large position was built over the 2016-2017 timeframe at prices between $64 and $89. Q4 2018 saw that original stake reduced by ~50% at prices between ~$120 and ~$144. Next quarter also saw a ~15% stake reduction. There was a one-third increase last quarter at prices between $82 and $118. That was followed with a ~15% stake increase this quarter at prices between ~$94 and ~$138. The stock currently trades at ~$165.Liberty Global (LBTYK): LBTYK is a medium sized 2.18% position established in 2017 at prices between $28 and $37. 2018 also saw a ~15% stake increase at prices between ~$20 and ~$37. Q2 & Q3 2019 had seen a ~30% selling at prices between $24 and $27.50 while next quarter saw a similar increase at prices between $20.50 and $25. Last two quarters had seen a ~30% selling at prices between ~$15 and ~$23. This quarter saw a ~5% stake increase. The stock is now at $23.65.Note: Oakmark has a ~14% ownership stake in Liberty Global.American Express (AXP): The small 0.54% of the portfolio AXP position was purchased in Q1 2020 at prices between ~$69 and ~$137 and the stock currently trades at ~$121. Last two quarters have seen minor increases.Note: In an interview last May, Nygren said he thinks AXP will earn between $4 and $5 per share this year and that could double in a couple of years. He also said compared to the financial crisis when the stock crashed to the low-teens, the difference now is that the firm is funded by long-term debt and so there is no risk of a liquidity crunch.Automatic Data Processing (ADP), Berkshire Hathaway (BRK.B), CBRE Group (CBRE), Cenovus Energy (CVE), Gartner Inc. (IT), General Electric (GE), Johnson Controls (JCI), Reinsurance Group of America (RGA), Wells Fargo (WFC), and WorkDay Inc. (WDAY): These small (less than ~1.75% of the portfolio each) stakes were increased this quarter.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F position at ~8% of the portfolio. The bulk of the position was purchased in 2014 at prices between ~$515 and ~$595. Next year also saw a ~20% stake increase at prices between ~$495 and ~$750. Last seven quarters have seen a ~25% selling at prices between ~$1054 and ~$1717. The stock currently trades at ~$1753.Bank of America (BAC) and Citigroup Inc. (C): BAC was a minutely small position in their first 13F filing in 1999. It became a significant part of the portfolio in 2011. The 2012 to 2015 timeframe saw the stake built from 9.8M shares to 138M shares at prices between ~$6 and ~$18. The next 3 years saw a ~40% reduction at prices between ~$12 and ~$33. Since then, the position has stayed steady although adjustments were made every quarter. The stock is now at $30.31 and it is at 4.22% of the portfolio. The 2.73% Citigroup position was built in 2014 at prices between ~$46 and ~$56. The stake was almost doubled over the next three years at prices between ~$37.50 and ~$76. Since 2018, there has been a combined ~30% selling at prices between ~$35 and ~$82. The stock currently trades at $61.66.Charter Communications (CHTR): CHTR is a top three 4.18% of the portfolio stake. It was established in 2015 when around 2M shares were purchased at prices between ~$150 and ~$190. 2017 saw a stake doubling at prices between ~$298 and ~$395. 2018 also saw a ~55% stake increase at prices between ~$260 and ~$390. Last seven quarters have seen a ~55% selling at prices between ~$275 and ~$635. The stock currently trades at ~$662.TE Connectivity (TEL): TE is a very long-term stake first purchased in 2011 in the high-20s price range. Recent quarters have seen minor selling. There was a 16% reduction last quarter at prices between ~$59 and ~$92. That was followed with a ~10% trimming this quarter. The stock currently trades at ~$121 and the stake is at 3.50% of the portfolio.General Motors (GM): GM is a 3.22% of the portfolio position. It is a very long-term stake. The original position was minutely small in 2007 and it was disposed the following year. In 2013, a huge ~70M share stake was established at prices between $27 and $41. The position size peaked at ~81M shares in 2015. The stake was sold down by ~25% in the 2016-2019 timeframe at prices between $28 and $46. That was followed with a ~25% reduction last quarter at prices between ~$17 and ~$37. This quarter saw minor trimming. The stock currently trades at $41.64.Booking Holdings (BKNG): BKNG is now a medium-sized 3.11% of the portfolio position. It was a minutely small stake first purchased in 2016 and was increased substantially next year at prices between $1465 and $2035. H1 2019 saw the stake almost doubled at prices between $1665 and $1880. H2 2019 had seen minor trimming. There was a ~25% stake increase in Q1 2020 at prices between ~$1152 and ~$2087. The stock is currently at ~$2227. This quarter saw a ~7% trimming.Hilton Worldwide (HLT): The 2.63% of the portfolio HLT stake was built during the four quarters thru Q1 2019 at prices between $66.50 and $85.75. The stock currently trades at ~$111. Last six quarters have seen only minor adjustments.MasterCard Inc. (MA): The 2.48% of the portfolio stake in MA was established in 2011 at prices between $23 and $37. The 2015-2019 timeframe had seen the stake reduced from over 25M shares to 4.23M shares at prices between ~$84 and ~$300. The stock currently trades at ~$357. Last three quarters have seen another ~30% selling at prices between ~$203 and ~$366. They are harvesting gains.Facebook Inc. (FB): FB is a 2.35% of the portfolio position. The stake saw a ~42% stake increase in Q1 2020 at prices between ~$146 and ~$223. The stock currently trades at ~$273. There was ~8% trimming this quarter.Netflix Inc. (NFLX): NFLX is a 2.13% of the portfolio stake purchased in 2017 at prices between ~$131 and ~$200. Next year also saw a ~50% stake increase at prices between ~$210 and ~$410. There was a ~45% selling over the last three quarters at prices between ~$299 and ~$557. The stock is now at ~$541.American International Group (AIG): AIG is a 2.10% of the portfolio position first purchased in 2012 at prices between ~$23 and ~$36. The stake was almost doubled over the next two years at prices between $35 and $56.50. 2016 saw a one-third selling at prices between $50 and $66. 2017-2018 timeframe saw a similar increase at prices between $37.50 and $67. The three quarters thru Q3 2019 had seen a ~20% reduction at prices between $40 and $57.50 while the next three quarters saw minor increases. The stock is now at $37.86. This quarter saw a ~7% trimming.Constellation Brands (STZ): STZ is now a ~2% of the portfolio stake. The position saw a ~50% stake increase in Q1 2020 at prices between ~$106 and ~$208 and the stock currently trades at ~$219. Last two quarters have seen a ~15% trimming.Comcast Corp (CMCSA): CMCSA is a very long-term ~2% of the portfolio stake that has been in the portfolio for well over 15 years. The first significant buying happened in 2004 when around 10M shares were purchased in the $6 to $8 price-range. The interim period saw some selling but in 2011 there was a 4x stake increase at prices between ~$10 and ~$13. The next five years saw a ~80% reduction at prices between ~$12 and ~$35. 2017-2018 timeframe saw the stake rebuilt at prices between $31 and $43. Last six quarters had seen only minor adjustments. The stock is now at $52.40. There was a ~12% trimming this quarter.Ally Financial (ALLY): ALLY is a 1.94% of the portfolio position first purchased in 2015 at prices between $18.50 and $24. Next year saw the position more than doubled at prices between $15.50 and $20.50. Since then, the stake had been kept relatively steady although adjustments were made every quarter. Last seven quarters have seen a ~20% selling at prices between ~$12 and ~$35. It is now at $35.66.Ryanair Holdings (RYAAY): RYAAY is a 1.85% of the portfolio stake established in 2018 at prices between ~$69 and ~$125. Q2 2019 also saw a ~20% stake increase at prices between ~$62 and ~$83. The stock currently trades at ~$110. Last four quarters have seen a ~55% selling at prices between ~$48 and ~$96.Moody’s Corp (MCO): MCO is a 1.26% of the portfolio stake established in 2017 at prices between $94 and $152. The stock currently trades at ~$290. Last three quarters have seen a ~50% selling at prices between ~$165 and ~$305.Baidu Inc. (BIDU): BIDU is a ~1% of the portfolio position first purchased in 2015 at prices between ~$134 and ~$233. Next year saw a substantial stake increase at prices between ~$125 and ~$194. 2017-2018 timeframe saw that original stake sold down by ~50% at prices between ~$165 and ~$280. It was built back up last year at prices between ~$97 and ~$182. Q1 2020 saw a ~40% selling at prices between ~$84 and ~$145. This quarter saw another ~17% selling at prices between ~$115 and ~$133. The stock currently trades at ~$216.Regeneron Pharmaceuticals (REGN): REGN is a 0.91% of the portfolio position. The bulk of the original stake was built in H1 2018 at prices between $320 and $385. Q2 2019 saw a ~45% increase at prices between $300 and $415. Last three quarters have seen a ~85% selling at prices between ~$339 and ~$658. The stock is now at ~$483.Agilent Technologies (A), Apache Corp (APA), Bank of New York Mellon (BK), Borg Warner (BWA), Capital One Financial (COF), CVS Health Group (CVS), Caterpillar Inc. (CAT), Charles Schwab (SCHW), CoreLogic Inc. (CLGX), Cummins (CMI), eBay Inc. (EBAY), EOG Resources (EOG), Humana Inc. (HUM), Goldman Sachs (GS), Grupo Televisa (TV), Howmet Aerospace (HWM), Lear Corp (LEA), Liberty Broadband (LBRDK), MGM Resorts (MGM), Oracle Corp (ORCL), Open Text Corp (OTEX), Parker Hannifin (PH), Pinterest Inc. (PINS), Qurate Retail (QRTEA), S&P Global (SPGI), State Street Corp (STT), Trip.com (TRIP), Visa Inc. (V): These small (less than ~1.5% of the portfolio each) stakes were reduced during the quarter.Kept Steady:None.Note: Although the stakes as percentage of the 13F portfolio are very small, Oakmark has significant ownership stakes in the following businesses: Tenet Healthcare (THC) and Volaris - Controladora Vuela Compañía de Aviación (VLRS).Below is a spreadsheet that shows the changes to William Nygren’s Harris Associates 13F portfolio holdings as of Q3 2020:Regulatory filings thru 9/17/2020: None."