"Tracking Charles Akre's Akre Capital Management Portfolio - Q1 2017 Update"
"Chuck Akre’s portfolio value increased from $5.45B to $6.08B this quarter.Akre Capital Management substantially increased Moody’s, MasterCard, and Visa.The top three positions are American Tower, Moody’s, and MasterCard and they add up to ~35% of the entire portfolio.This article is first in a series that provides an ongoing analysis of the changes made to Akre Capital Management’s US stock portfolio on a quarterly basis. It is based on Akre’s regulatory  filed on 05/15/2017.Charles Akre founded Akre Capital Management in 1989. Assets Under Management are at ~$6.7B spread-out among private funds, the Akre Focus Mutual Fund (AKREX) (AKRIX) (AKRSX), and Separately Managed Accounts.  All three have generated significant alpha: a) Separately Managed Accounts compounded at 12.7% over 27 years compared to 9.4% for the S&P 500, b) Private Funds at 15.25% over 23 years compared to 9.2% for the S&P 500, and c) Mutual Fund at 13.8% over 7-years compared to 12.3% for the S&P 500. Their investment philosophy is captured by the “three legged stool” with the legs representing extraordinary business, talented management, and great reinvestment opportunities and histories. Adhering to this theme has resulted in Akre holding businesses that have compounded capital at above average rates of return over a long period of time. He recently disclosed that he has had two 100-baggers (those investments that have returned 100-times their invested capital) in his investing career: Berkshire Hathaway and American Tower.This quarter, Akre’s portfolio value increased ~12% from $5.45B to $6.08B this quarter. The number of positions decreased from 31 to 28. The largest five stakes are American Tower, Moody’s Corporation, MasterCard, Markel Corporation, and Visa Inc. and they together account for ~50% of the total portfolio value.Akre coined the term "compounding machines" to describe the type of businesses he invests in. To learn more about that investing style, check out .New Stakes:None.Stake Disposals:American International Group (AIG) WTS, Walt Disney (DIS), and Duluth Holdings (DLTH): These are minutely small stakes (less than ~0.25% of the portfolio each) disposed of this quarter.Stake Increases:Moody’s Corporation (MCO): The initial purchase of MCO happened in Q1 & Q2 2012 in the high-30s price-range. Since then, the position size was doubled at higher prices. Last quarter saw a ~15% increase at prices between $94 and $109 and that was followed with a ~22% increase this quarter at prices between $95 and $114. It currently trades at $117 and it is now the second-largest stake at ~10.5% of the portfolio.Note: Akre’s cost-basis on MCO is ~$39 (roughly three times return in five years so far).MasterCard (MA): The large (top three) ~10% MA position was first purchased in 2010 in the low-20s price-range and it currently trades at ~$122. The stake saw increases every year thru 2015 but was kept steady last year. This quarter saw a ~13% increase at prices between $105 and $113.Note: Akre’s cost-basis on MA is $22.20 (roughly five times return in six years so far).Visa Inc. (V): V is a large (top five) ~7% of the portfolio stake. It was established in Q2 2012 at a cost-basis of around $30. Q2 2013 saw a one-third increase in the low-40s and that followed with a 60% increase in Q2 2016 in the high 70s. This quarter also saw another roughly one-third increase at prices between $79.50 and $90. The stock is now at $94.67.Dollar Tree (DLTR): DLTR is a 5.41% of the portfolio position first purchased in 2010 at a cost-basis in the low-20s. The stock currently trades at $78.28. The position was kept relatively steady last year although previous years have seen significant buying. There was a marginal increase this quarter.Roper Technologies (ROP): ROP is a fairly large 5.30% of the portfolio position first purchased in Q2 & Q3 2014 at prices between $129 and $150. The stake saw incremental buying in the following quarters. In Q2 2016, there was a ~20% increase at prices between $165 and $185. The stock is now at $227. There was marginal increase this quarter.O’Reilly Automotive (ORLY): ORLY is a 3.66% portfolio stake first purchased in 2005. Over 800K shares were purchased at the time and the current position is at 825K - every year has seen adjustments but overall the position has remained remarkably steady over the twelve year holding period. The stock has returned ~10x and currently trades at $250 compared to his cost-basis in the mid-20s. This quarter saw a marginal increase.Verisk Analytics (VRSK): VRSK is a ~3.5% portfolio position first purchased in H2 2012 at prices between $46.50 and $51. 2015 saw a huge 3x stake increase at prices between $63 and $81. The position has since been kept relatively steady. The stock is currently at $80.55. There was a marginal increase this quarter.Monro Muffler Brake (MNRO): MNRO is a small 1.35% portfolio stake first purchased in H2 2012 at prices between $32 and $39. H2 2014 saw a 3x stake increase at prices between $48 and $58 and it has since been kept relatively steady. The stock is now at $50.50.Stake Decreases:American Tower (AMT): AMT has been in the portfolio for well over sixteen years. It is the largest stake at 14.52% of the portfolio. Recent activity follow: the last five years saw consistent buying every year. The share count has increased over four times from 1.7M shares to 7.3M shares during that period. The buying happened at prices $65 and $118 and the stock is now at $131. This quarter saw a marginal reduction.Markel Corporation (MKL): MKL is another top five 8.25% portfolio stake that has been in the portfolio for over twenty years. Recent activity follow: H2 2013 and H1 2014 saw a stake doubling at prices between $510 and $655 and since then the position has remained relatively steady. The stock is now at $968. This quarter saw a marginal reduction.Note: Akre saw 20-times compounding over 20 years on his first purchases of MKL. However, they also increased their original stake substantially a decade ago at a cost-basis of $444 (2.5 times book value) and that portion has only doubled.Enstar Group (ESGR): ESGR is a long-term 4.55% portfolio stake that has been in the portfolio for almost a decade. The bulk of the original stake is from Q1 & Q2 2008 at prices between $89 and $119. The position remained largely untouched until 2015. H2 2015 & Q1 2016 saw a roughly 3x increase at prices between $146 and $165 and the stock is now at $190. There was marginal trimming this quarter.Note: Akre Capital Management has a ~9% ownership stake in Enstar Group (ESGR).Colfax Corp. (CFX): The ~3% CFX position was first purchased in Q3 2012 and built up over the last four years at prices between $20 and $75. Q2 2016 saw an about-turn: ~20% reduction at prices between $25 and $34. There was another ~23% selling last quarter at prices between $29 and $40. The stock is now at $40.60. This quarter saw marginal trimming.Note: Akre Capital Management has a ~4% ownership stake in Colfax Corp.Berkshire Hathaway (BRK.A) (BRK.B) and CSX Corporation (CSX): These two small positions have been in the portfolio since their first 13F filing (Q4 2000). Berkshire Hathaway is now at 1.23% of the portfolio. Last five years have seen only very minor activity. There was minor trimming this quarter. CSX was a minutely small 0.03% stake as of last quarter - it was almost sold out this quarter.Kept Steady:CarMax Inc. (KMX): The ~6% KMX stake is a very long-term position first purchased in 2002. The bulk of the current stake was built over the four quarters thru Q2 2016 at prices between $42 and $68. The stock is now at ~$64.72.SBA Communications (SBAC): SBAC is a ~5% portfolio stake. The original position is from H1 2014 at prices between $88 and $102. Q4 2015 saw a one-third increase at prices between $100 and $121 and a similar increase occurred last quarter as well at prices between $96 and $115. The stock currently trades well above those ranges at $136.Danaher Corporation (DHR): DHR is a 2.33% of the portfolio position established in Q4 2013 at prices between $47 and $55 and increased by roughly five-times in Q2 2014 at prices between $52 and $59. The stock is now at $84.40. Last quarter saw a ~10% increase.Note: The prices quoted above are adjusted for the Fortive spinoff in July last year.Ubiquiti Networks (UBNT): UBNT is a 2.21% portfolio stake built up in H2 2014 at prices between $28 and $46.50. Q1 2015 also saw a ~40% stake increase at prices between $26 and $32. Since then, the position has been kept relatively steady. The stock currently goes for $47.75.TD Ameritrade (AMTD): AMTD is a 1.90% portfolio position first purchased in 2009. The bulk of the current stake was built in 2011 & 2012 at prices between $15 and $22 and the stock is now at $37.91.Dollar General (DG): DG is a 1.72% portfolio stake purchased last quarter at prices between $67 and $80 and the stock is now at $72.32.LKQ Corporation (LKQ): LKQ is a 1.71% position established in 2015 at prices between $24 and $31. Last five quarters have seen a ~12% combined increase at prices between $25 and $36. The stock currently trades at $31.55.AlarmCom Holding (ALRM), Bank of America (BAC) WTS, Diamond Hill Investment Group (DHIL), Fortive Corporation (FTV), Lamar Advertising (LAMR), Primo Water (PRMW), and WMIH Corp. (WMIH): These are very small (less than ~1% of the portfolio each) stakes left untouched this quarter.Note: Akre Capital Management has a ~6% ownership stake in Primo Water (PRMW).Below is a spreadsheet that highlights the changes to Charles Akre's Akre Capital Management US long stock portfolio as of Q1 2017:"