"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q2 2019 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased from $9.80B to $7.43B this quarter. The number of positions decreased from 51 to 37.They reduced Alphabet and Fiat Chrysler during the quarter.The top three positions are Alphabet, CarMax, and Berkshire Hathaway and they add up to ~40% 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 08/14/2019. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q1 2019.This quarter, Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased ~24% from $9.80B to $7,43B as many large positions were reduced or dropped. The number of holdings decreased from 51 to 37. 19 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 ~40% while the top five are at ~55% of the 13F assets: Alphabet, Berkshire Hathaway, CarMax, Amazon.com, and Credit Acceptance Corp.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable ~49-year track record (July 15, 1970 inception, 13.58% annualized return compared to 10.93% for the S&P 500 index). In Q2 2019, the fund was up 20.99% compared to up 18.54% for the S&P 500 index. For 2018, the fund outperformed the S&P 500 Index – down 2.62% vs down 4.38% for the S&P 500 index. 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), Naspers (NPSNY), Rolls-Royce Holdings plc (RYCEY), Vivendi (VIVHY), Hiscox Limited (HCXLF), a2Milk, and Melrose Industries plc (MLSPF).  Currently one-third of the businesses held are domiciled outside the US. Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .Stake Disposals:Alibaba Group Holdings (BABA): The vast majority of the 2.22% BABA stake was purchased in Q4 2018 at prices between $131 and $164. The position was disposed this quarter at prices between $149 and $195. The stock currently trades at ~$178.Wayfair Inc. (W): W was a very small 0.76% of the portfolio position purchased last quarter at prices between $85 and $172 and disposed this quarter at prices between $138 and $164. The stock currently trades at $124.BMC Stock Holdings (BMCH), GTT Communications (GTT), Sinclair Broadcast (SBGI), and Yandex NV (YNDX): These very small positions (less than ~1% of the portfolio each) were eliminated this quarter. They had a ~6% ownership stake in BMC Stock Holdings.New Stakes:None.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is the largest 13F stake at ~15% 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 two quarters thru Q1 2018 at prices between $951 and $1176. The stock is now at ~$1204. Last four quarters had seen minor trimming and this quarter saw another one-third reduction at prices between $1036 and $1288.Berkshire Hathaway (BRK.A) (BRK.B): BRK.B is the second-largest position at ~14% 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 2018 saw another one-third selling at prices between $191 and $217. The pattern reversed next quarter: ~10% increase at prices between $185 and $201. The stock is now at ~$207. Last four quarters have seen a combined ~5% trimming.CarMax Inc. (KMX): KMX is a top-three ~12% 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 next quarter there was a ~80% increase at prices between $59 and $72. The stock is now at $86.59. Last five quarters have seen a combined ~17% trimming.Note: They have a ~6% ownership stake in the business.Credit Acceptance Corp. (CACC): CACC is a large (top five) ~7% stake established in Q1 2017 at prices between $185 and $221. The stock has doubled in the two-year holding period and currently trades at ~$463. There have only been very minor adjustments in the last few quarters.Note: They have a 5.60% ownership stake in Credit Acceptance Corp.Jacobs Engineering Group (JEC): JEC is a 6.68% long-term stake first purchased in 2012. Recent activity follow: Q2 2018 saw a ~20% increase at prices between $56.50 and $67 while the last four quarters saw minor trimming. The stock currently trades at ~$92.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 stock is now at ~$43 and the stake is at 6.36% of the portfolio. Last five quarters have seen a ~17% selling at prices between $29 and $39.Note: they have a ~6% ownership stake in Liberty Media Formula One.Liberty Broadband (LBRDK): LBRDK is a ~6% of the portfolio position purchased in Q1 2018 at prices between $86 and $97 and increased by ~20% next quarter at prices between $69 and $85. The stock currently trades at $108. There was minor trimming over the last four quarters.Amazon.com Inc. (AMZN): AMZN stake was established in Q4 2016 at prices between $719 and $845. Q4 2017 saw the stake almost doubled at prices between $957 and $1196. Last year saw a ~60% selling at prices between $1170 and $2050. The stock is currently at $1831. Last two quarters have also seen a one-third selling at prices between $1500 and $1963. They are realizing gains.Facebook Inc. (FB): The FB position saw a whopping ~600% stake increase in Q1 2018 at prices between $152 and $193. The next two quarters had seen another ~27% increase at prices between $155 and $218. Last quarter saw an about turn: ~23% reduction at prices between $124 and $173. The stock currently trades at $189 and the stake is at 5.49% of the portfolio.  There was minor trimming this quarter.Charles Schwab (SCHW): SCHW is a medium sized 4.74% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. Last few quarters have seen only minor adjustments. The stock is now at $41.10.Booking Holdings (BKNG): The 4.45% of the portfolio BKNG stake 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 $1992. Last five quarters have seen only minor adjustments.Visa Inc. (V): The 3.38% 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 ~$182. It is a very long-term stake first purchased soon after the IPO in 2008. There was a ~30% selling in Q1 2018 at prices between $114 and $126 and that was followed with a ~22% selling in Q3 2018 at prices between $131 and $151. Last three quarters have seen minor trimming.Mohawk Industries (MHK): MHK is a very long-term 2.81% 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 has wavered. 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 ~$121. Last few quarters have seen only minor activity.Fiat Chrysler Auto (FCAU): The 4.25% FCAU position as of last quarter was first purchased in H1 2017 at prices between $9.50 and $11.65. It had since been increased. This quarter saw an about turn: position almost disposed at prices between $12.50 and $16.75. The stock is now at $14.06.JD.com (JD): The 2.53% JD position as of last quarter was first purchased in Q1 2016. The stake has wavered. Recent activity follow: Q3 2018 saw a ~44% increase at prices between $24.50 and $39.50. Last two quarters had seen only minor adjustments while this quarter saw the position almost sold out at prices between $25.75 and $31.50. The stock is now at $31.48.Altaba Inc. (AABA): The ~3% AABA stake as of last quarter was established in Q1 2018 at prices between $69 and $80 and increased by around one-third next quarter at prices between $67.50 and $82. This quarter saw the position almost sold out at prices between $59 and $79. It is now at ~$70.Builders FirstSource (BLDR): The very small ~1% portfolio stake in BLDR as of last quarter was almost sold out this quarter. They had a 7.55% ownership stake in BLDR.Stake Increases:MasterCard Inc. (MA): MA is a fairly large 7.19% 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 in Q1 2018 at prices between $152 and $183. Q3 2018 saw another ~22% selling at prices between $196 and $224. The stock is now at ~$283. This quarter saw a marginal increase.Kept Steady:None.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q2 2019:: – Performance – 14.68% for Q1 2019 compared to 13.65% for the S&P 500 Index. . Activity –. EXITS/REDUCTIONS – sold Electronic Arts (quick 10% profit – grew uncomfortable with the performance of their non-sports game franchises) & Koninklichke Vopak (market beating small profit) . NEW INVESTMENTS – ."