"Tracking Tweedy Browne Portfolio – Q4 2020 Update"
"Tweedy Browne’s 13F portfolio value increased from $2.58B to $2.95B this quarter.The largest five individual stock positions are Alphabet, Berkshire Hathaway, Baidu, Johnson & Johnson, and Cisco Systems, and they account for ~56% of the portfolio.Tweedy Browne added Alibaba Group Holdings during the quarter.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 2/16/2021. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q3 2020.This quarter, Tweedy Browne’s 13F portfolio value increased ~15% from $2.58B to $2.95B. The number of holdings increased from 47 to 48. The largest position is Alphabet at ~15% of the portfolio. Largest five individual stock positions are Alphabet, Berkshire Hathaway, Baidu, Johnson & Johnson, and Cisco Systems. Combined they are at ~56% of the portfolio. 30 of the 48 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 Global Value Fund (TBGVX) has a global orientation with non-US allocation at ~88% of the portfolio and cash at ~4%. The top five holdings are Nestle (NSRGY), Roche Holding (RHHBY), Heineken (HKHHF), Diageo plc (DEO), and CNH Industrial (CNHI). Together, they are at ~21% of the fund. Per Q4 2020 Commentary, the fund returned -1% for 2020 compared to 2.5% for MSCI EAFE. Since inception (1993), annualized returns are at 8.64% compared to 6.16% for MSCI EAFE.New Stakes:Alibaba Group Holdings (BABA): BABA is a large 5.21% of the portfolio stake established this quarter at prices between ~$222 and ~$317 and the stock currently trades at $223.Stake Disposals:None.Stake Increases:Baidu Inc. (BIDU): BIDU is a large 10.33% portfolio stake purchased in Q1 2017 at prices between $168 and $186 and the stock is now at ~$205. 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 has been minor.Coca Cola FEMSA (KOF): The fairly large 4.45% KOF stake was built over the three quarters thru Q2 2020 at prices between $38 and $65. The stock currently trades at $46.51. Last two quarters have also seen minor increases.Note: Tweedy Browne has a ~5.4% ownership stake in the business.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. The stock currently trades at $38.42 and the stake is at 2.49% of the portfolio.Note: Tweedy Browne’s third quarter commentary said that they purchased FOX at a price estimated to be at 8% earnings yield. Also, they mentioned the focus on live programming, profitability of Fox News, and insider buying as attractive attributes.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 $56.30 and the stake is at ~2%. Last two quarters have seen only minor adjustments.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February 2017.AbbVie Inc. (ABBV): ABBV is a 1.42% of the portfolio position established in Q2 2020 at prices between $73 and $99 and it is now at ~$104. Last quarter saw a ~50% stake increase at prices between ~$86 and ~$101. That was followed with a ~30% increase this quarter at prices between ~$81 and ~$109.Bank of America (BAC), Truist Financial (TFC), Carlisle Companies (CSL), and Intel Corp (INTC): These four positions were built over the last two quarters. BAC is a ~2% of the portfolio position established at prices between ~$23 and ~$30 and it is now at $37.66. The 1.41% TFC stake was purchased at prices between ~$33.50 and ~$49 and the stock currently trades at $57.49.  The 1.21 % of the portfolio CSL position was purchased at prices between ~$270 and ~$319 and the stock currently trades at ~$270. INTC is a ~1% of the portfolio stake established at prices between ~$44 and ~$61 and it is now at $62.02.Goldman Sachs (GS): The small ~1% GS stake saw a roughly one-third increase this quarter at prices between ~$189 and ~$264. It is now at ~$331.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F stake at ~15% of the portfolio. It was first purchased in 2012 at much lower prices compared to the current price of ~$2044. Q3 2016 saw a ~9% trimming at prices between $692 and $787. Since then, the activity has been minor.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 ~14% 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 several quarters have seen minor trimming. The stock currently trades at ~$251.Johnson & Johnson (JNJ): JNJ is a large (top five) position in the portfolio at ~10%. 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 had seen minor selling in most quarters. Q4 2016 saw a ~20% reduction at prices between $111 and $120. The share count is now at ~1.79M. The stock currently trades at ~$162. Tweedy Browne is harvesting long-term gains from this position.Cisco Systems (CSCO): CSCO position was first purchased in 2011. It is currently their fifth-largest 13F stake at 7.44% of the portfolio. 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 stock currently trades at $50.51. 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. They are harvesting gains. Last six quarters have also seen minor trimming.Bank of New York Mellon (BK): BK is a large 4.41% 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. This quarter saw a ~18% reduction at prices between ~$34 and ~$42.50. The stock currently trades at $46.33.AutoZone (AZO): AZO is a 3.64% 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 ~$1374. Q1 2019 saw a one-third selling at prices between $810 and $1000 and that was followed with a ~11% trimming next quarter. Tweedy Browne is harvesting gains. There was minor trimming in the last six quarters.Autoliv Inc. (ALV): The 3.53% ALV position was established in Q1 2020 at prices between ~$40 and ~$82 and the stock currently trades at $89.44. Last two quarters have seen minor trimming.Wells Fargo (WFC): WFC is a 2.44% 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. The stock is now at $39.30. There was minor trimming over the last seven quarters.3M Company (MMM): MMM is a 2.19% 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 three quarters there was minor trimming. The stock is now at ~$193.US Bancorp (USB): The 1.87% USB position had seen a ~45% increase over the last three quarters at prices between ~$29 and ~$59. The stock is now at $54.89. There was minor trimming this quarter.Emerson Electric (EMR): EMR is a long-term 1.55% 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. The stock currently trades at $89.19. Last two years have also seen minor trimming.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. Last quarter saw the stake reduced to a minutely small 0.14% of the portfolio position at prices between $32.50 and $42. The stock currently trades at $53.57. There was another ~13% trimming this quarter.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), 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.Kept Steady:Morgan Stanley (MS): The small ~1% MS stake was purchased in Q2 2020 at prices between $31.50 and $50.50 and the stock currently trades at $80.13. Last quarter saw a marginal increase.The spreadsheet below highlights changes to Tweedy Browne’s 13F stock holdings in Q4 2020:Source: John Vincent. Data constructed from Tweedy Browne's 13F filings for Q3 and Q4 2020.Info from Commentary – Q2 2020: PERFORMANCE – Flagship Global Value Fund - TBGVX – -13.51% vs -8.37% for MSCI EAFE (hedged to USD) – from 1993 inception 8.18% vs 5.79%. ACTIVITY IN GLOBAL VALUE & VALUE FUNDS: ADDS: Alliance Global Group plc. EXITS: Antofagasta plc, ConocoPhillips, Phillips 66, Royal Dutch Shell.  TRIMMED – Chokwang Paint, Heineken Holdings, HSBC Holding, Mediaset Espana, Nestle, Novartis, Roche Holding, Sol SpA, Zurich Insurance. INCREASED – Astellas Pharma, Babcock International, Jardine Strategic, Johnson Service Group, Kuraray co. Commentary – sold or reduced Oil & Gas businesses. They believe their bank holdings are one of the most undervalued parts in the portfolio. Zero-rate environment favoring longer duration growth stocks – aka large cap us tech stocks.Regulatory filings thru 12/13/2020: None."