"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q1 2022 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased from $11.71B to $10.15B this quarter. The number of positions remained steady at 34.They increased Netflix while almost selling out Walt Disney.The top three positions are Alphabet, UnitedHealth, and Anthem and they add up to ~28% 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 5/13/2022. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q4 2021.This quarter Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased from $11.71B to $10.15B. The number of holdings remained steady at 34. 18 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 ~28% while the top five are at ~43% of the 13F assets: Alphabet, UnitedHealth, Anthem, Formula One, and Taiwan Semi.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable ~51-year track record (July 15, 1970 inception, 13.62% annualized return compared to 11.34% 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. Also, the cash allocation which had averaged ~20% since inception is now ~4.3%. The following significant stakes in Sequoia’s portfolio are not in the 13F report as they are not 13F securities: Constellation Software (CNSWF), Eurofins Scientific SE (ERFSF), Rolls-Royce Holdings plc (RYCEY), and Universal Music Group (UMGNF). Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .Stake Increases:Meta Platforms (META) previously Facebook: The META 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. Q1 2019 saw an about turn: ~23% reduction at prices between $124 and $173. Q1 2021 saw a ~13% stake increase at prices between ~$246 and ~$299. The stock currently trades at ~$164 and it is now at 6.21% of the portfolio. There was a ~10% stake increase in Q3 2021 and a ~7% increase this quarter.Netflix Inc. (NFLX): NFLX is a 5.27% of the portfolio position purchased in Q4 2020 at prices between ~$471 and ~$554. There was a ~15% stake increase in Q2 2021 at prices between ~$485 and ~$555. That was followed with a ~85% stake increase this quarter at prices between ~$331 and ~$597. The stock currently trades well below their purchase price ranges at ~$168.Note: the Netflix investment thesis is based around the idea that as the global trend toward subscription-based streaming video consumption accelerates, the leaders will be more profitable than the leaders of the cable era.Wayfair Inc. (W): W is a 3.75% of the 13F portfolio stake purchased in Q3 2019 at prices between $106 and $152. Next quarter saw a ~40% stake increase at prices between $80 and $118. That was followed with another ~30% increase in Q1 2020 at prices between ~$24 and ~$110. The four quarters through Q1 2021 saw a ~75% reduction at prices between ~$47 and ~$346. Q3 2021 saw a ~80% stake increase at prices between ~$239 and ~$317. That was followed with a one-third increase last quarter at prices between ~$190 and ~$280. The stock currently trades at $47.14. This quarter also saw a ~9% stake increase.Note: Wayfair has seen a previous roundtrip. It was a very small 0.76% of the portfolio position purchased in Q1 2019 at prices between $85 and $172 and disposed next quarter at prices between $138 and $164.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is the largest 13F stake at 10.74% 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 follows: Q2 2019 saw a one-third reduction at prices between $1036 and $1288. That was followed with a ~60% reduction over the six quarters through Q4 2020 at prices between ~$1057 and ~$2138. The stock currently trades at ~$2134. Last five quarters have also seen minor trimming.UnitedHealth (UNH): The large (top three) ~9% UNH position was established in Q4 2019 at prices between $215 and $296 and increased by ~300% next quarter at prices between ~$195 and ~$305. Q3 2020 saw a ~30% stake increase at prices between ~$291 and ~$324. The stock currently trades at ~$462. Last six quarters have seen only minor adjustments.Micron Technology (MU) and Anthem Inc. (ANTM): MU is a 5.91% of the portfolio position built over the two quarters through Q3 2021 at prices between ~$74 and ~$96 and the stock currently trades well below that range at $58.70. There was minor trimming in the last two quarters. The large (top three) 8.50% ANTM stake was established in H1 2021 at prices between ~$288 and ~$402 and it is now at ~$460. There was minor trimming in the last two quarters.Formula One Group (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 six quarters thru Q3 2019 had seen a ~18% selling at prices between $28.50 and $43 and that was followed with similar selling next quarter at prices between $40 and $46. Last nine quarters have seen only minor adjustments. FWONA is now at $53.33, and the stake is at 7.33% of the portfolio.Note: their ownership stake in Formula One Group is ~5%.Taiwan Semi (TSM): The top-five ~7% of the portfolio TSM stake was purchased in Q4 2019 at prices between $46.50 and $59. There was a ~130% stake increase in Q2 2020 at around the same price range. The stock currently trades at $87.19. Q1 2021 saw a ~12% selling while in Q3 2021 there was a ~20% stake increase. There was minor trimming in the last two quarters.Note: their investment thesis is based on the following: fabs are capital intensive (~$10B per facility) and the leader naturally has a strong moat thereby yielding big profit margins. Debatably, they produce the most important manufactured component in the modern economy. It is essentially a monopoly, and the main concern is geopolitical risks.Charles Schwab (SCHW): SCHW is a 6.84% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. Q1 2020 saw a ~40% stake increase at prices between $28.50 and $49. There was a ~17% selling in Q2 2020 at prices between $32.50 and $43. Last seven quarters also saw minor trimming. The stock is now at $61.11.CarMax Inc. (KMX): KMX is currently at 6.55% of the 13F portfolio. 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 eleven quarters through Q4 2020 had seen a ~45% selling at prices between ~$44 and ~$109. The stock is now at $89.79. Last few quarters have seen only minor adjustments.Credit Acceptance Corp. (CACC): CACC is a 4.67% stake established in Q1 2017 at prices between $185 and $221. There was a ~25% stake increase in Q4 2020 at prices between $288 and $356. Q3 2021 saw a ~18% selling at prices between ~$438 and ~$670. That was followed with a one-third reduction last quarter at prices between ~$582 and ~$696. The stock is now at ~$506. This quarter also saw a minor ~4% trimming.Note: They have a ~6% ownership stake in Credit Acceptance Corp.Berkshire Hathaway (BRK.A) (BRK.B): Berkshire stake is now at 4.75% of the portfolio. It is a very long-term position that was the largest stake in their first 13F filing in 1999. Recent activity follows:  Q1 2018 saw a one-third selling at prices between ~$191 and ~$217. Last nine quarters have seen the large stake sold down at prices between ~$169 and ~$359. The stock is now at ~$278.Liberty Broadband (LBRDK): LBRDK is a 4.67% 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. Q1 2020 saw a ~18% reduction at prices between ~$91 and ~$139. There was a ~23% stake increase in Q1 2021 at prices between ~$143 and ~$157. The stock currently trades at ~$114. Last four quarters saw minor trimming.Intercontinental Exchange (ICE): The 4.52% ICE stake was purchased in Q3 2020 at prices between ~$92 and ~$107. The stock currently trades near the bottom of that range at ~$94. Last few quarters have seen only minor adjustments.Jacobs Engineering Group (J): J is a 3.94% long-term stake first purchased in 2012. Recent activity follows: Q2 2018 saw a ~20% increase at prices between $56.50 and $67 while the next six quarters saw minor trimming. There was a ~25% selling in Q1 2020 at prices between ~$63 and ~$104. That was followed with a similar reduction in Q2 2021 at prices between ~$129 and ~$143. The stock currently trades at ~$124. Last three quarters also saw minor trimming.Walt Disney (DIS): DIS was a fairly large 3.71% of the portfolio position established in Q2 2020 at prices between $94 and $127. The position was sold down to a minutely small stake this quarter at prices between ~$129 and ~$158. The stock currently trades at $94.22.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q1 2022:Source: John Vincent. Data constructed from Ruane, Cunniff, & Goldfarb's 13F filings for Q4 2021 and Q1 2022.Q4 2021 Portfolio Review video, Letter, Factsheet & Nov 4 Investor Day etc.: Performance: 25.48% for 2021 vs 28.71% for the S&P 500 index. 13.99% vs 11.50% since 1970 inception through 2021. Increased: Meta, Prosus, and Wayfair. Trimmed: Berkshire, CACC, Eurofins, and Jacobs. Sold: Arista Networks (high valuation), Fidelity National Information Systems (changed business outlook), Hiscox (changed business outlook). New:  . Commentary: Anthem & UnitedHealth – on the theme that private sector does it more efficiently than government – also Medicare Advantage dynamic mentioned. Prosus – Tencent fair value estimate has come down substantially due to regulatory headwinds – but the discount is very wide at ~40%. TSMC & Micron – As a monopoly & oligopoly respectively, will enjoy dual benefits of a accelerating growth and improving economics.Regulatory filings from 11/29/2021 to 3/1/2022: 13G/A – 2/14 – FWONK – 9.99M shares – 4.91% of business, CACC – 894K shares – 6.15% of business, ."