"Tracking Tweedy Browne Portfolio – Q3 2021 Update"
"Tweedy Browne’s 13F portfolio value decreased from $3.56B to $2.99B this quarter.They decreased Alibaba Group Holdings and Baidu while increasing Fresenius Medical Care. They also added FMC Corp.Alphabet Inc. at ~19% of the portfolio is the largest position.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 11/12/2021. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q2 2021.This quarter, Tweedy Browne’s 13F portfolio value decreased ~16% from $3.56B to $2.99B. The number of holdings remained steady at 46. The largest position by far is Alphabet at ~19% of the portfolio. The largest five individual stock positions are Alphabet, Berkshire Hathaway, Johnson & Johnson, Cisco Systems, and Coca Cola FEMSA. Combined they are at ~54% of the portfolio. 32 of the 46 13F stakes are significantly large (over ~0.5% of the 13F portfolio each) and they are the focus of this article.Tweedy Browne 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 International Value Fund (TBGVX) has a global orientation with non-US allocation at ~83% of the portfolio and cash at ~3%. The top five holdings are Nestle (NSRGY), Diageo plc (DEO), CNH Industrial (CNHI), Heineken (HKHHF), and Roche Holding (RHHBY). Together, they are at ~20% of the fund. Per Q3 2021 Commentary, the fund returned 14.76% for YTD through Oct 2021 compared to 17.18% for MSCI EAFE. Since inception (1993), annualized returns are at 8.76% compared to 6.51% for MSCI EAFE.New Stakes:FMC Corporation (FMC): FMC is a 3% of the portfolio position established this quarter at prices between ~$88 and ~$109 and the stock currently trades at ~$106.Stake Disposals:AbbVie Inc. (ABBV): ABBV was a 1.24% of the portfolio position established in Q2 2020 at prices between $73 and $99. Q3 2020 saw a ~50% stake increase at prices between ~$86 and ~$101. That was followed with a ~30% increase next quarter at prices between ~$81 and ~$109. The disposal this quarter was at prices between ~$106 and ~$121. The stock is now at ~$117.Stake Increases:Fresenius Medical Care (FMS): FMS is a small ~1% of the portfolio stake established in Q1 2021 at prices between ~$34 and ~$43. There was a ~14% stake increase last quarter at prices between ~$36.70 and ~$42. That was followed with a ~40% stake increase this quarter at prices between ~$35 and ~$42. The stock currently trades at $33.13.Stake Decreases:Alibaba Group Holdings (BABA): BABA was a large (top three) 9.86% of the portfolio stake established in Q4 2020 at prices between ~$222 and ~$317 and increased by two-thirds next quarter at prices between ~$225 and ~$271. There was a ~40% further increase last quarter at prices between ~$206 and ~$244. The stake was reduced by over 95% to a minutely small 0.31% portfolio position this quarter at prices between ~$145 and ~$222. The stock currently trades at ~$167.Baidu Inc. (BIDU): BIDU was a large (top five) 5.58% portfolio stake purchased in Q1 2017 at prices between $168 and $186. The position was increased by roughly two-thirds in Q2 2019 at prices between $108 and $185. Next quarter saw an about turn: 40% selling at prices between $94 and $119. Since then, the activity had been minor. Q1 2021 saw a ~30% reduction at prices between ~$204 and ~$340. This quarter saw the stake almost sold out at prices between ~$137 and ~$202. The stock is now at ~$171.Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F stake at ~19% of the portfolio. It was first purchased in 2012 at much lower prices compared to the current price of ~$2974. Q3 2016 saw a ~9% trimming at prices between $692 and $787. Since then, the activity has been minor. There was a ~10% trimming this quarter.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 ~15% 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 next quarter: ~37% increase at prices between $143 and $167. Last five quarters have seen a ~15% selling at prices between ~$200 and ~$292. The stock currently trades at ~$286.Johnson & Johnson (JNJ): JNJ is a large (top three) position in the portfolio at ~9%. It is a long-term stake. The position was built from 400K shares to just over 4.3M shares between 2009 and 2012 at prices between $48 and $72. Since then, the stake has seen minor selling in most quarters. Q4 2016 saw a ~20% reduction at prices between $111 and $120. The share count is now at ~1.67M. The stock currently trades at ~$165. Tweedy Browne is harvesting long-term gains from this position.Cisco Systems (CSCO): CSCO position was first purchased in 2011. It is currently a 5.47% of the portfolio stake. 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 three years thru Q1 2019 saw a ~44% reduction at prices between $41 and $54. Next quarter saw another ~25% selling at prices between $51 and $57.50. Last three quarters also saw a ~50% reduction at prices between ~$44 and ~$59. The stock currently trades at ~$57. They are harvesting gains.Coca Cola FEMSA (KOF): The 5.27% KOF stake was built over the three quarters thru Q2 2020 at prices between $38 and $65. Since then, the activity has been minor. The stock currently trades at $53.45.Note: Tweedy Browne has a ~5% ownership stake in the business.AutoZone (AZO): AZO is a ~5% position purchased in Q3 2017 at prices between $493 and $595 and increased by ~75% in Q2 2018 at prices between $596 and $693. The stock currently trades well above those ranges at ~$1886. Q1 2019 saw a one-third selling at prices between $810 and $1000 and that was followed with a ~11% trimming next quarter. Last several quarters have also seen minor selling. Tweedy Browne is harvesting gains.Wells Fargo (WFC): WFC is a 3.38% of the 13F portfolio position. The initial stake was established in 2010 with the bulk of the current position purchased in 2011 at prices between $25 and $34. H2 2016 saw a ~30% reduction at prices between $44 and $58. The next two years had also seen minor selling. Q1 2019 saw a ~15% further reduction at prices between $46 and $52. Last ten quarters have seen another ~18% trimming at prices between ~$21.50 and ~$54.50. The stock is now at ~$51.Bank of New York Mellon (BK): BK is a 3.24% 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. Since then the activity had been minor. Last three quarters had seen a ~50% reduction at prices between ~$34 and ~$52. The stock currently trades at ~$60. There was marginal trimming this quarter.Autoliv Inc. (ALV): The 3.19% ALV position was established in Q1 2020 at prices between ~$40 and ~$82 and the stock currently trades at ~$102. Last five quarters have seen minor trimming.Fox Corporation (FOX): The FOX stake was a minutely small position established in Q2 2019. Next quarter saw the stake built at prices between $31.50 and $38. There was a ~15% stake increase in Q4 2019 and that was followed with a ~72% increase next quarter at prices between ~$20 and ~$38.50. Since then, the activity has been minor. The stock currently trades at $38.15 and the stake is at 2.79% of the portfolio.Bank of America (BAC), Truist Financial (TFC), Carlisle Companies (CSL), and Intel Corp (INTC): These four positions were built in H2 2020. BAC is a 2.74% of the portfolio position established at prices between ~$23 and ~$30 and it is now at $46.91. The 1.66% TFC stake was purchased at prices between ~$33.50 and ~$49 and the stock currently trades at $62.70.  The 1.43% of the portfolio CSL position was purchased at prices between ~$113 and ~$196 and the stock currently trades at ~$240. INTC is a ~1% of the portfolio stake established at prices between ~$44 and ~$61 and it is now at $50.31. This year has seen minor trimming in all four positions.US Bancorp (USB): The 2.17% USB position had seen a ~45% increase over the first three quarters of 2020 at prices between ~$29 and ~$59. The stock is now at $60.50. There was a ~10% trimming in the last four quarters.Comcast Corporation (CMCSA): CMCSA is a very long-term stake that has been in the portfolio since before the financial crisis. Recent activity follows: There was a two-thirds reduction in Q4 2017 at prices between $35 and $41. Q4 2018 also saw a ~23% selling at prices between $33 and $39.50. Q2 2020 saw an about turn: ~140% stake increase at prices between $32.50 and $43. The stock is now at ~$53.50 and the stake is at 2.10%. Last five quarters have seen only minor adjustments.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February 2017.3M Company (MMM): MMM is a ~2% long-term stake first purchased in 2008 at low prices. The five quarters thru Q2 2017 had seen a combined ~46% reduction at prices between $165 and $213. There was a ~8% selling in Q4 2017 and that was followed with a ~18% reduction next quarter at prices between $215 and $259. The five quarters thru Q3 2019 had also seen a ~15% combined selling at prices between $160 and $220. Q1 2020 saw a ~12% stake increase while last six quarters have seen a ~11% trimming. The stock is now at ~$184.Emerson Electric (EMR): EMR is a long-term 0.91% 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 has since been further reduced. Q4 2016 saw a ~20% selling at prices between $49 and $58 and that was followed with a ~20% reduction in 2017 at prices between $56 and $70. Next year saw another ~35% selling at prices between $55 and $80. Last two years had also seen minor trimming. Last quarter saw a ~45% reduction at prices between ~$90 and ~$99. The stock currently trades at $97.42. There was a minor ~2% trimming this quarter.Morgan Stanley (MS): The small 0.77% MS stake was purchased in Q2 2020 at prices between $31.50 and $50.50 and the stock currently trades at $99.85. There was a ~50% selling over the last two quarters at prices between ~$77 and ~$105.ConocoPhillips (COP): COP was a 1.6M share stake built in 2009 at prices between $22 and $40. The position had seen minor trimming since 2016. Q3 2020 saw the stake reduced to a minutely small position at prices between $32.50 and $42. The stock currently trades at $72.36. Last four quarters have seen further selling.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.American Express (AXP), CNH Industrial (CNHI), Concentrix Corp (CNXC), Diageo plc (DEO), Union Pacific (UNP), Unilever (UN) (UL), and Verizon Communications (VZ): These small positions (less than ~1.5% of the 13F portfolio each) were reduced during the quarter.Note: Although the 13F position is small, the firm has a large stake in Diageo held in LSE.The spreadsheet below highlights changes to Tweedy Browne’s 13F stock holdings in Q3 2021:Source: John Vincent. Data constructed from Tweedy Browne's 13F filings for Q2 2021 and Q3 2021.Info from Commentary – Q2 2021: PERFORMANCE – Flagship International Value Fund - TBGVX – 12.68% vs 12.94% for MSCI EAFE (hedged to USD) for 2021 thru Q2  – from 1993 inception 8.94% vs 6.51%. ACTIVITY IN GLOBAL VALUE & VALUE FUNDS: ADDS: None. EXITS: Jardine Strategic, Bank of New York Mellon, Kingboard Holdings, Berkshire Hathaway B shares. Based on valuation. INCREASED – Alibaba, Industrias Bachoco SA de CV. Commentary – Hopeful that the switch to value stocks is a durable phenomenon and is certainly long overdue. Tesco – added. Also Kemira and Takasgo Thermal in International Fund 2. bullish thesis on Alibaba – At time of purchase, Alibaba sold for less than 12x its estimated core “marketplace” EBITA, after deducting values for its other assets (i.e., international commerce, cloud, and new media) from Enterprise Value.. Top Holdings: Nestle (NSRGY), Diageo plc (DEO), CNH Industrial (CNHI), Roche Holding (RHHBY), and Heineken (HKHHF). Together, they are at ~20% of the fund.July 9, 2021: Global Value Funds  as International Value Funds.Regulatory filings from 5/12/2021 thru 8/15/2021: None."