"Tracking John Rogers’ Ariel Investments Portfolio – Q2 2023 Update"
"….….….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 8/14/2023. John Rogers’ 13F portfolio value increased ~2% from $10.41B to $10.56B this quarter. The portfolio is diversified with recent 13F reports showing around 150 positions. There are 62 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 Baidu, Mattel, Philip Morris, Kennametal, and Generac Holdings. They add up to ~15% of the portfolio. Please visit our  Portfolio series to get an idea of their investment philosophy and our  for the fund’s moves during Q1 2023.Their flagship mutual fund is the Ariel Fund (ARGFX) incepted in 1986. Ariel Fund has a lifetime annualized return of 10.67% compared to 10.34% for the Russell 2500 Index and 10.64% for the S&P 500 Index. In the most recent 10-year period, it has underperformed the S&P 500 index: 9.21% vs 12.86%. 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 Deutsche Boerse AG (DBOEY), Roche Holding AG (RHHBY), Endesa SA (ELEZF), Michelin (MGDDY), Koninklijke Ahold Delhaize (ADRNY), Snam SpA (SNMRY), and Subaru (FUJHY).New Stakes:Sphere Entertainment (SPHR): The SPHR position came about as a result of the spin-out from MSG Entertainment. They had 6.66M shares of MSG Entertainment which now trades under this ticker. The net stake was reduced by ~20% during the quarter. The stock currently trades at $34.11.Stake Increases:Mattel Inc. (MAT): The large (top three) ~3% 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. H2 2021 had also seen a ~17% increase at prices between ~$18 and ~$23. The last several quarters have seen only minor adjustments. The stock currently trades at $21.82.Note: They have ~4.5% 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 saw 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. That was followed by a similar reduction last quarter at prices between ~$90 and ~$105. The stock currently trades at ~$96, and it is at 2.75% of the portfolio. There was a minor ~2% increase this quarter.Generac Holdings (GNRC): GNRC is a 2.47% stake that saw a ~27% increase last quarter at prices between ~$98 and ~$135. The stock is now at ~$119. There was a ~5% further increase this quarter.Jones Lang LaSalle (JLL): The 2.24% 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. That was followed with a ~11% increase last quarter at prices between ~$137 and ~$185. The stock currently trades at ~$170. There was a minor ~5% further increase this quarter.Madison Square Garden Entertainment (MSGE): MSGE is currently at 2.23% of the portfolio. The original MSGE stake was built over the seven quarters through Q4 2021 at prices between ~$27 and ~$79. The stock currently trades at $31.73. There was a minor ~5% increase this quarter.Note: Ariel Investments has a ~5.6% ownership stake in Madison Square Garden Entertainment. The prices quoted above are adjusted for the Sphere Entertainment (SPHR) spin-out in April.Mohawk Industries (MHK): MHK is  a ~2% of the portfolio position built over the three years through Q1 2022 at prices between ~$117 and ~$230 and it is now well below that range at ~$98. There were minor increases in the last several quarters.Northern Trust (NTRS): NTRS is a 1.76% 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. The last few quarters have seen minor increases. The stock currently trades at $75.53.Leslie’s (LESL): LESL is a 1.47% position built during the last two quarters at prices between ~$9 and ~$17. It currently trades well below their purchase price range at $6.70.ADT Inc. (ADT), Carlyle Group (CG), Charles River Laboratories (CRL), Core Laboratories (CLB), Charles Schwab (SCHW), Equity Commonwealth (EQC), Itau Unibanco (ITUB), Lindblad Expeditions (LIND), Paramount Global (PARA) previously ViacomCBS, Prestige Consumer Healthcare (PBH), and Verizon Communications (VZ): These small (less than ~2% of the portfolio each) stakes were increased during the quarter.Stake Decreases:Baidu Inc. (BIDU): BIDU is currently the largest 13F position at 3.57% 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 position has wavered. Recent activity follows. Last year saw a ~18% increase at prices between ~$79 and ~$161. There was a minor ~3% trimming this quarter. The stock currently trades at ~$137.Kennametal Inc. (KMT): KMT is a 2.65% 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 $26.29. The last few quarters have seen minor trimming.Note: Ariel Investments has a ~12% ownership stake in Kennametal Inc.Gentex Corp (GNTX): The 2.34% GNTX stake was purchased in Q3 2021 at prices between ~$27.50 and ~$38 and the stock currently trades at $32.11. The last several quarters have seen only minor adjustments.Resideo Technologies (REZI): The 2.33% REZI stake was built during the three quarters through Q2 2022 at prices between ~$19.50 and ~$28 and the stock currently trades below that range at $16.19. This quarter saw marginal trimming.Note: They have a ~9.3% ownership stake in the business.Microsoft Corp (MSFT): MSFT is now at 2.31% 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. The 2020 to 2021 time period saw another ~50% selling at prices between ~$137 and ~$343. The last two quarters also saw a ~28% reduction at prices between ~$222 and ~$348. The stock currently trades at ~$324.Lazard Ltd. (LAZ): LAZ is a 2.20% 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 $33.63. There was a ~20% trimming in the last four quarters.Note: Ariel Investments have a ~7% ownership stake in Lazard.First American Financial (FAF): FAF is a 2.07% 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. Next quarter saw a ~15% selling at prices between ~$64 and ~$81. The stock is now at $60.32. The last few quarters also saw minor trimming.Aflac Inc. (AFL), Adtalem Global Education (ATGE), Affiliated Managers Group (AMG), Axalta Coating (AXTA), Amdocs Ltd. (DOX), BorgWarner Inc. (BWA), Bristol-Myers Squibb (BMY), Brink’s Co (BCO), Boyd Gaming (BYD), BOK Financial (BOKF), Credicorp Ltd. (BAP), CarMax Inc. (KMX), CBRE Group (CBRE), Check Point Software (CHKP), Envista Holdings (NVST), Gilead Sciences (GILD), Goldman Sachs (GS), Janus Henderson Group (JHG), Interpublic Group (IPG), Johnson & Johnson (JNJ), J M Smucker (SJM), Knowles Corp (KN), Laboratory Corp (LH), Littelfuse Inc. (LFUS), Masco Corp. (MAS), Madison Square Garden Sports (MSGS), Manchester United (MANU), Norwegian Cruise Line Holdings (NCLH), nVent Electric (NVT), OneSpaWorld Holdings (OSW), Royal Caribbean Cruises Ltd. (RCL), Simpson Manufacturing (SSD), Stericycle Inc. (SRCL), Snap-On Inc. (SNA), and Zebra Technologies (ZBRA): These small (less than ~2% of the portfolio each) stakes were reduced during the quarter.Note: They have significant ownership stakes in Adtalem Global Education, Knowles Corp, Madison Square Garden Sports, Manchester United and OneSpaWorld Holdings.Below is a spreadsheet that shows the changes to John Rogers’ Ariel Investments 13F portfolio holdings as of Q2 2023:Source: John Vincent. Data constructed from Ariel Investments’ 13F filings for Q1 2023 and Q2 2023.Regulatory filings from 3/22/2023 to 5/22/2023: None."