"Tracking Tweedy Browne Portfolio – Q4 2017 Update"
"Tweedy Browne’s 13F portfolio value decreased marginally from $3.68B to $3.65B this quarter.The largest five individual stock positions are Cisco Systems, Berkshire Hathaway, Baidu Inc., Johnson & Johnson, and Alphabet and they account for ~45% of the portfolio.Tweedy Browne dropped International Business Machines and Scripps Networks Interactive during the quarter.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 02/15/2018. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q3 2017.This quarter, Tweedy Browne’s US long portfolio value decreased marginally from $3.68B to $3.65B. The number of holdings decreased from 53 to 50. The largest position is Cisco Systems at 10.75% of the US long portfolio. Largest five individual stock positions are Cisco Systems, Berkshire Hathaway, Baidu Inc., Johnson & Johnson, and Alphabet. Combined they are at ~45% of the portfolio. 30 of the 53 13F stakes are significantly large (over ~0.5% of the US long portfolio each) and they are the focus of this article.Tweedy Browne (TBGVX) (TWEBX) (TBHDX) (TBCUX) 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 Global Value Fund (TBGVX) has a global orientation with non-US allocation at ~78% of the portfolio and cash at ~11%. The top five holdings are Safran SA (SAFRY) (SAFRF), Heineken Holding (HEINY) (HKHHF), Nestle SA (NSRGY) (NSRGF), Roche Holding AG (RHHVF), and Axel Springer SE (AXELF). Together, they are at ~16% of the fund. Per , the fund returned 15.43% for 2017 compared to 16.84% for MSCI EAFE. Since inception, annualized returns are at 9.48% compared to 6.29% for MSCI EAFE.  They found only two new investments (Autozone & WPP plc) in 2017 and are wary of the high valuations globallyNew Stakes:None.Stake Disposals:International Business Machines (IBM): IBM was a ~1% of the 13F portfolio position as of last quarter. The first purchase was in Q3 2015 at prices between $141 and $173. Q1 2016 saw a 22% increase at prices between $118 and $152. The following quarter saw an about turn: one-third reduction over four quarters at prices between $146 and $181. There was another ~14% selling in Q2 2017 at prices between $151 and $175. The disposal this quarter was at prices between $145 and $162. The stock currently trades at $155.Scripps Network Interactive (SNI): The small 0.64% SNI stake was established last quarter at prices between $67 and $88 and eliminated this quarter at prices between $78 and $86. The stock is now at $88.16.Stake Increases:None.Stake Decreases:Cisco Systems (CSCO): CSCO was a 2.2% of the US long portfolio position when first established in 2011. It is currently their largest 13F stake at 10.75% of the US long portfolio. 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 stock currently trades at $44.06. Last seven quarters saw a combined ~25% reduction at prices between $26.50 and $38.50.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 ~10% 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 in Q4 2016: ~37% increase at prices between $143 and $167. The stock currently trades at $203. There was a ~12% selling this quarter.Baidu Inc. (BIDU): BIDU is a top three ~9% portfolio stake purchased in Q1 2017 at prices between $168 and $186 and the stock is now well above that range at $245. There was marginal trimming this quarter.Note: Tweedy Browne’s buy thesis on BIDU is on the idea that 50% margins in the company’s core Search business is being masked by money-losing subsidiaries.Johnson & Johnson (JNJ): JNJ is a large (top five) position in the portfolio at 8.61%. It is a long-term stake. The position was built up from 400K shares to just over 4.3M shares between 2009 and 2012 at prices between $48 and $72. Since then, the stake had seen minor selling in most quarters. Q4 2016 saw a ~20% reduction at prices between $111 and $120 and that was followed with minor trimming in the last four quarters. The share count is now at ~2.25M. The stock currently trades at $131. Tweedy Browne is harvesting long-term gains from this position.Alphabet Inc. (GOOG) (GOOGL): GOOG is a top-five 7.39% position first purchased in 2012 at much lower prices compared to the current trading price of $1102. Q3 2016 saw a ~9% trimming at prices between $692 and $787. There was a very minor ~3% increase in the following quarter and that was followed with marginal trimming in the last four quarters.Bank of New York Mellon (BK): BK is a large 6.61% 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. The stock currently trades at $56.42. Q4 2016 saw a ~4% increase while last four quarters saw minor trimming.Wells Fargo (WFC): WFC is a fairly large position at 5.52% of the US long portfolio. The initial stake was established in 2010 with the bulk of the current position purchased in 2011 at prices between $25 and $34. Q3 2016 saw a ~12% reduction at prices between $44 and $51 and that was followed with another ~14% selling the following quarter at prices between $43.50 and $57.50. There was a minor ~7% selling in H1 2017. The stock is now at $59.95. This quarter saw a ~6% trimming.Halliburton Company (HAL): HAL is a 4.49% of the portfolio stake. It was established in 2012 at prices between $27.50 and $38.50. There had only been very minor adjustments since. Q3 2016 saw a ~20% reduction at prices between $41 and $47 and that was followed with another ~13% selling the following quarter at prices between $44.50 and $55. The stock currently trades at $47.16. Last three quarters have seen minor trimming.Philip Morris (PM): PM is a 3.40% of the portfolio stake established in 2009 at a cost-basis in the high-30s. The following year also saw a ~50% increase in the low-50s price range. Around two-thirds of that original stake was disposed of in 2012 in the high-80s price range. The five quarters thru Q2 2017 had seen another one-third reduction at prices between $88 and $122. The stock is now at $103. Tweedy Browne is harvesting long-term gains. This quarter saw ~4% trimming.3M Company (MMM): MMM is a 3.30% long-term stake first purchased in 2008. The five quarters thru Q2 2017 had seen a combined ~46% reduction at prices between $165 and $213. The stock is now at $235. Tweedy Browne is harvesting huge long-term gains. There was a ~8% selling this quarter.Devon Energy (DVN): DVN is a ~3% of the US long portfolio position. The bulk of the stake was purchased in 2012 when around 2.2M shares were acquired at prices between $51 and $75. Q3 2016 saw a ~11% reduction at prices between $36 and $45 and that was followed with a ~9% selling in Q1 2017 at prices between $38.50 and $49. There was another ~11% trimming the following quarter at prices between $30 and $43. The stock currently trades at $34.65. Last two quarters have seen a combined ~5% trimming.ConocoPhillips (COP): COP was a minutely small position in 2007. The majority of the current ~1.9M share stake (2.61% of portfolio) was purchased in 2009 at prices between $22 and $40. The stock currently trades at $54.84. The three quarters thru Q3 2016 had seen minor reductions. Q4 2016 saw a ~14% selling at prices between $40.50 and $53. Last year saw another similar trimming at prices between $43 and $56. Tweedy Browne is harvesting long-term gains.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.Baxter International (BAX): BAX is a 2.69% portfolio stake established in 2010. The position saw a ~10% selling in Q3 2016 at prices between $41 and $49. Q1 2017 saw another ~28% reduction at prices between $44.44 and $52.30. It currently trades at $67.04. There was marginal selling in the last three quarters.MRC Global (MRC): The 2.32% MRC stake was purchased in Q3 & Q4 2015 at prices between $11 and $16. Q3 2016 saw a ~22% selling at prices between $12.50 and $16.50 and that was followed with a ~6% trimming in Q1 2017. Last quarter saw a ~15% increase at prices between $15.40 and $17.50. The stock is now at $16.51. There was a ~3% trimming this quarter.Note: Tweedy Browne controls 5.3% of MRC Global.Emerson Electric (EMR): EMR is a long-term 2.20% 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 had since been further reduced. Q4 2016 saw a ~20% selling at prices between $49 and $58 and that was followed with a ~20% reduction over the last year at prices between $56 and $70. The stock currently trades at $71.07.AutoZone (AZO): AZO is a 1.95% position purchased last quarter at prices between $493 and $595 and it currently trades above that range at $713. There was a ~2% trimming this quarter.Note: On AZO, Tweedy Browne believed valuations had become depressed due to unreasonable fears that Amazon might disrupt the market for retail auto parts.Unilever (UN) (UL): The 1.39% portfolio UN stake saw a one-third increase in Q4 2016 at prices between $38.50 and $46.50 and the stock is now at $53.32. Last two quarters have seen a combined ~17% reduction at prices between $54.50 and $61.50.Note: Kraft Heinz (KHC) offered to acquire Unilever in February 2017 but withdrew the offer soon after.Agco Corporation (AGCO): AGCO was a minutely small stake as of Q3 2015. The following quarter saw a ~90% increase at prices between $43.50 and $51.50 and that was followed with another ~50% increase in Q1 2016 at prices between $44 and $53.50. The next three quarters had seen another roughly one-third increase at prices between $46.50 and $60. Last quarter saw an about turn: ~7% trimming. That was followed with a one-third reduction this quarter at prices between $65.50 and $75. The stock is currently at $66.40 and the position is at 1.29% of the 13F portfolio.Comcast Corporation (CMCSA): CMCSA is a very long-term stake that has been in the portfolio since before the financial crisis. The stake was reduced by ~11% in Q4 2015 at prices between $28 and $31.50. Q3 2016 saw another ~16% selling at prices between $32.50 and $34. There was a two-thirds reduction this quarter at prices between $35 and $41. The stock is now at $39.47 and the stake is at 0.70%. Tweedy Browne is harvesting gains.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February 2017.Avnet Inc. (AVT), American Express (AXP), Diageo plc (DEO), MasterCard Inc. (MA), National Western Life (NWLI), Phillips 66 (PSX), and Union Pacific (UNP): These small positions (less than ~1.25% of the 13F portfolio each) saw minor reductions this quarter.Note: The firm has a large stake in Diageo although the 13F position is very small. The rest of the shares are held in the native UK market which is outside the realm of 13F filings.Kept Steady:Coca Cola FEMSA (KOF), US Bancorp (USB), and Verizon Communications (VZ): These are very small (less than ~1% of the portfolio each) stakes kept steady this quarter.Other minutely small (less than 0.5% of the US long portfolio each) positions in the 13F portfolio include American National Insurance (ANAT), CKX lands (CKX), Connecticut Water Service (CTWS), General Electric (GE), GlaxoSmithKline (GSK), HSBC Holdings (HSBC), Leucadia National (LUK), Novartis AG (NVS), NOW Inc. (DNOW), Royal Dutch Shell (RDS.A) (RDS.B), Shenandoah Tel. (SHEN), Signet Jewelers (SIG), Torchmark Corp. (TMK), Total SA (TOT), Trustmark Corp (TRMK), UniFirst Corporation (UNF), Williams Sonoma (WSM), and WPP plc ADR (WPP).Note: GlaxoSmithKline, HSBC, Novartis AG, Royal Dutch Shell, and Total SA are top positions in the firm. Shares in these European businesses are primarily held in their native markets and so are outside the realm of US 13F filings.The spreadsheet below highlights changes to Tweedy Browne’s US stock holdings in Q4 2017:Info from : Sees European securities as values only on a relative basis – the PE is around the same for both US & Europe on a trailing basis at ~21 while on a forward-basis, European PE’s are at ~16 compared to ~19 for US. Both, are still historically high…Regulatory filings thru 11/18/2017: None."