"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q4 2019 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased from $7.62B to $8.09B this quarter. The number of positions increased from 37 to 40.They added Arista Networks while dropping Mohawk Industries.The top three positions are Alphabet, Berkshire Hathaway, and CarMax and they add up to ~37% 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 02/14/2020. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q3 2019.This quarter Ruane, Cunniff, & Goldfarb’s 13F portfolio value increased from $7.62B to $8.09B. The number of holdings increased from 37 to 40. 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 ~37% while the top five are at ~50% of the 13F assets: Alphabet, Berkshire Hathaway, CarMax, Credit Acceptance Corp, and Jacobs Engineering.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable ~49-year track record (July 15, 1970 inception, 13.59% annualized return compared to 11.05% for the S&P 500 index). For 2019, the fund was up 29.12% compared to 31.5% for the S&P 500 index. After new management took over in Q1 2016, the portfolio has largely hugged the index (~62% return compared to ~65% for the S&P). The portfolio has also 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 just ~3%. The following significant stakes in Sequoia’s portfolio are not in the 13F report as they are not 13F securities: Constellation Software (CNSWF), Naspers (NPSNY), Rolls-Royce Holdings plc (RYCEY), Vivendi (VIVHY), Hiscox Limited (HCXLF), a2Milk, Eurofin Scientific (ERFSF), Prosus NV (PROSY), and Melrose Industries plc (MLSPF). Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .Stake Disposals:Mohawk Industries (MHK): MHK was a very long-term 2.29% of the portfolio position first purchased in 2001. The stake became a significantly large position in Q3 2002 when close to 10M shares were purchased at a cost-basis of around $50. Last few quarters had seen minor trimming and this quarter saw the position disposed at prices between $119 and $152. The stock is now at ~$112.New Stakes:Taiwan Semi (TSM) and UnitedHealth (UNH): These are small new positions established this quarter. The 2.14% of the portfolio TSM stake was purchased at prices between $46.50 and $59 and the stock currently trades at $51.83. The 1.31% UNH position was established at prices between $215 and $296 and it is now at $273.Stake Increases:Credit Acceptance Corp. (CACC): CACC is a large 6.30% stake established in Q1 2017 at prices between $185 and $221. The stock has roughly doubled in the three-year holding period and currently trades at ~$412. There have only been very minor adjustments in the last few quarters.Note: They have a ~6% ownership stake in Credit Acceptance Corp.Wayfair Inc. (W): W is a fairly large 4.47% of the 13F portfolio stake purchased last quarter at prices between $106 and $152. This quarter saw a ~40% stake increase at prices between $80 and $118. The stock currently trades well below the low end of those ranges at $49.82.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 last quarter at prices between $138 and $164.Arista Networks (ANET): The fairly large 4.38% ANET stake was primarily built this quarter at prices between $185 and $249. The stock currently trades near the low end of that range at $186.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is the largest 13F stake at ~17% 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. The stock currently trades at $1216. This quarter saw minor trimming.Berkshire Hathaway (BRK.A) (BRK.B): BRK.B is the second-largest position at ~12% of the portfolio. It is a very long-term stake that was already their 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. The pattern reversed next quarter: ~10% increase at prices between $185 and $201. The stock is now at ~$193. This quarter saw a ~10% trimming.CarMax Inc. (KMX): KMX is a top-three ~9% of the portfolio position. 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. Last seven quarters have seen a one-third selling at prices between $58 and $100. The stock is now at $75.21.Note: They have a ~5% ownership stake in the business.Jacobs Engineering Group (J): J is a large (top five) 6.24% 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 last six quarters saw minor trimming. The stock currently trades at ~$89.Liberty Broadband (LBRDK): LBRDK is a 6.10% 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. The stock currently trades at ~$114. There was minor trimming over the last six quarters.Liberty Media Formula One (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 stock is now at ~$30 and the stake is at ~6% of the portfolio. Last six quarters had seen a ~18% selling at prices between $28.50 and $43 and that was followed with similar selling this quarter at prices between $40 and $46.Note: they have a ~5% ownership stake in Liberty Media Formula One.Facebook Inc. (FB): The FB 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. The stock currently trades at ~$170 and the stake is at 5.77% of the portfolio.  Last few quarters have seen only minor adjustments.MasterCard Inc. (MA): MA is a ~5% of the portfolio stake established soon after its IPO in 2006 at a split-adjusted cost-basis of $4.50 per share. The original position was huge at ~2.4M shares (24M shares after accounting for the 10-for-1 stock-split in 2014). It was sold down by ~72% over the next two years. Recent activity follows: Q3 2018 saw a ~22% selling at prices between $196 and $224. That was followed with a ~30% selling last quarter at prices between $257 and $292. The stock currently trades at ~$262. This quarter saw a ~3% trimming.Charles Schwab (SCHW): SCHW is a ~5% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. Last few quarters have seen only minor adjustments. The stock is now at $30.27.Booking Holdings (BKNG): The 4.24% of the portfolio BKNG stake was purchased in Q1 2017 at prices between $1477 and $1789 and increased by ~40% the following quarter at prices between $1738 and $1911. The stock currently trades at $1528. Last seven quarters have seen only minor adjustments.Amazon.com Inc. (AMZN): AMZN stake was established in Q4 2016 at prices between $719 and $845. Q4 2017 saw the stake almost doubled at prices between $957 and $1196. 2018 saw a ~60% selling at prices between $1170 and $2050. The stock is currently at ~$1800 and the stake is at 3.57% of the portfolio. H1 2019 had also seen a one-third selling at prices between $1500 and $1963. This quarter also saw a ~27% selling at prices between $1705 and $1870. They are realizing gains.Visa Inc. (V): Visa is a now a small ~2% of the portfolio stake. It is a very long-term position first purchased soon after the IPO in 2008. The position was sold down consistently since Q1 2018. That quarter saw a ~30% selling at prices between $114 and $126 and that was followed with a ~22% selling in Q3 2018 at prices between $131 and $151. Last quarter saw another ~40% selling at prices between $169 and $186. The stock is now at $171. There was a ~2% trimming this quarter.Kept Steady:None.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q4 2019:Performance YTD as of 12/20/2019 from : 29.28%.Q3 2019 : Performance: 21.85% YTD vs 20.55% for the index. 0.71% vs 1.70% for the quarter. Trimmed Constellation Software and MasterCard while increasing Rolls Royce and adding Wayfair. The Top 10 Holdings are in the letter (not pasting below from now on…)"