"Tracking Tweedy Browne Portfolio – Q2 2017 Update"
"Tweedy Browne’s 13F portfolio value decreased from $3.48B to $3.37B this quarter.The largest five individual stock positions are Cisco Systems, Berkshire Hathaway, Johnson & Johnson, Baidu, and Alphabet and they account for ~43% of the portfolio.Tweedy Browne decreased Devon Energy, IBM, Verizon, & Avnet and dropped Wal-Mart 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 08/11/2017. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q1 2017.This quarter, Tweedy Browne’s US long portfolio decreased ~3% from $3.48B to $3.37B. The number of holdings decreased from 52 to 51. The largest position is Cisco Systems at 9.74% of the US long portfolio. Largest five individual stock positions are Cisco Systems, Berkshire Hathaway, Johnson & Johnson, Baidu Inc., and Alphabet. Combined they are at 43.08% of the portfolio. 29 of the 51 13F stakes are significantly large (over ~0.5% of the US long portfolio each) and they are the focus of this article.Tweedy Browne (TBGVX) (TWEBX) (TBHDX) (TBCUX) 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 ~76% of the portfolio and cash at ~16%. The top five holdings are Safran SA (SAFRY) (SAFRF), Nestle SA (NSRGY) (NSRGF), Heineken Holding (HEINY) (HKHHF), Roche Holding AG (RHHVF), and Novartis AG (NVSEF) (NVS). Together, they are at ~15% of the fund.Stake Disposals:Wal-Mart Stores (WMT): WMT was a very small ~0.5% of the 13F portfolio stake as of last quarter. It was disposed of this quarter at prices between $71 and $80 and the stock is now at $80.40.Stake Increases:Baidu Inc. (BIDU): BIDU is a top-five ~7.5% portfolio stake purchased last quarter at prices between $168 and $186 and the stock is now well above that range at $224.   There was a marginal increase this quarter.Note: Tweedy Browne’s buy thesis on BIDU is on the idea that 50% margins in the company’s core Search business is being masked by money-losing subsidiaries.Stake Decreases:Cisco Systems (CSCO): CSCO was a 2.2% of the US long portfolio position when first established in 2011. It is currently their largest 13F stake at 9.74% of the US long 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 $31.47. Last five quarters have seen a combined ~23% trimming at prices between $26.50 and $34.50.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 9.73% of the 13F 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 in Q4 2016: ~37% increase at prices between $143 and $167. The stock currently trades at $175. There was marginal trimming in the last two quarters.Johnson & Johnson (JNJ): JNJ is the third-largest position in the portfolio at 9.03%. It is a long-term stake. The position was built up 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 and that was followed with minor trimming in the last two quarters. The share count is now at ~2.3M shares. The stock currently trades at $133. Tweedy Browne is harvesting long-term gains from this position.Alphabet Inc. (GOOG) (GOOGL): GOOG is a top-five 7.11% position first purchased in 2012 at much lower prices compared to the current trading price of $914. Q3 2016 saw a ~9% trimming at prices between $692 and $787. There was a very minor ~3% increase in the following quarter and that was followed with marginal trimming in the last two quarters.Bank of New York Mellon (BK): BK is a large ~7% 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. The stock currently trades at $52.19. Q4 2016 saw a ~4% increase while last two quarters saw marginal trimming.Wells Fargo (WFC): WFC is a fairly large position at 5.80% of the US long portfolio. The initial stake was established in 2010 with the bulk of the current position purchased in 2011 at prices between $25 and $34. Q3 2016 saw a ~12% reduction at prices between $44 and $51 and that was followed with another ~14% selling the following quarter at prices between $43.50 and $57.50. There was a very minor ~3% selling last quarter and that was followed with a ~4% further trimming this quarter. The stock is now at $51.94.Halliburton Company (HAL): HAL is a 4.44% of the portfolio stake. It was established in 2012 at prices between $27.50 and $38.50. There had only been very minor adjustments since. Q3 2016 saw a ~20% reduction at prices between $41 and $47 and that was followed with another ~13% selling the following quarter at prices between $44.50 and $55. The stock currently trades at $40.02. Last two quarters have seen marginal trimming.Philip Morris (PM): PM is a 4.29% of the portfolio stake established in 2009 at a cost-basis in the high-30s. The following year also saw a ~50% increase in the low-50s price range. Around two-thirds of that original stake was disposed of in 2012 in the high-80s price range. The remaining position had been kept relatively steady since. Last five quarters have seen a one-third reduction at prices between $88 and $122. The stock is now at $115. Tweedy Browne is harvesting long-term gains.3M Company (MMM): MMM is a 3.44% long-term stake first purchased in 2008. Last five quarters have seen a combined ~46% reduction at prices between $165 and $213. The stock is now at $206. Tweedy Browne is harvesting huge long-term gains.Baxter International (BAX): BAX is a 2.76% portfolio stake established in 2010. The position saw a ~10% selling in Q3 2016 at prices between $41 and $49. Last quarter saw another ~28% reduction at prices between $44.44 and $52.30. It currently trades at $59.84. There was marginal selling this quarter.Devon Energy (DVN): DVN is a 2.72% of the US long portfolio position. The bulk of the stake was purchased in 2012 when around 2.2M shares were acquired at prices between $51 and $75. Q3 2016 saw a ~11% reduction at prices between $36 and $45 and that was followed with a ~9% selling last quarter at prices between $38.50 and $49. There was another ~11% trimming this quarter at prices between $30 and $43. The stock currently trades at $31.61.ConocoPhillips (COP): COP was a minutely small position in 2007. The majority of the current ~2M share stake (2.56 % of portfolio) was purchased in 2009 at prices between $22 and $40. The stock currently trades at $44.79. The three quarters thru Q3 2016 had seen minor reductions. Q4 2016 saw a ~14% selling at prices between $40.50 and $53 and that was followed with a ~3% trimming each in the last two quarters. Tweedy Browne is starting to harvest long-term gains.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.Emerson Electric (EMR): EMR is a long-term 2.22% 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 had since been further reduced. Q4 2016 saw a ~20% selling at prices between $49 and $58 and that was followed with a ~10% trimming over the last two quarters. The stock currently trades at $58.89.MRC Global (MRC): The 2.19% MRC stake was purchased in Q3 & Q4 2015 at prices between $11 and $16. Q3 2016 saw a ~22% selling at prices between $12.50 and $16.50 and that was followed with a ~6% trimming last quarter. The stock is now at $15.71. There was marginal trimming this quarter.Note: Tweedy Browne controls ~4.8% of MRC Global.Comcast Corporation (CMCSA): CMCSA is a very long-term stake that has been in the portfolio since before the financial crisis. The stake was reduced by ~11% in Q4 2015 at prices between $28 and $31.50. Q3 2016 saw another ~16% selling at prices between $32.50 and $34. The stock is now at $41.11. Tweedy Browne is harvesting gains. There was marginal trimming in the last three quarters.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February.Agco Corporation (AGCO): AGCO was a minutely small stake as of Q3 2015. The following quarter saw a ~90% increase at prices between $43.50 and $51.50 and that was followed with another ~50% increase in Q1 2016 at prices between $44 and $53.50. The next three quarters had seen another roughly one-third increase at prices between $46.50 and $60. The stock is currently above those ranges at $68.82 and the position is at 2.03% of the 13F portfolio. There was marginal trimming in the last two quarters.Unilever (UN) (UL): The 1.73% portfolio UN stake saw a one-third increase in Q4 2016 at prices between $38.50 and $46.50 and the stock is now at $57.96. There was marginal trimming in the last two quarters.Note: Kraft Heinz (KHC) offered to acquire Unilever in February but withdrew the offer soon after. Unilever stock has been on an uptrend since. It has returned just over 40% YTD.International Business Machines (IBM): IBM is a ~1% of the 13F portfolio position established in Q3 2015 at prices between $141 and $173. Q1 2016 saw a 22% increase at prices between $118 and $152. Last four quarters had seen a one-third selling at prices between $146 and $181. There was another ~14% selling this quarter at prices between $151 and $175. The stock currently trades at $142.Avnet Inc. (AVT): AVT is a small 1.12% of the US long portfolio stake established in Q1 2016 at prices between $37.50 and $45 and increased by ~20% in Q4 2016 at prices between $40.50 and $49. This quarter saw an about-turn: roughly one-third reduction at prices between $36 and $46. The stock currently trades at $36.99.Verizon Communications (VZ): VZ is a 0.73% of the US long portfolio position established in Q3 2014 at prices between $48.50 and $52. The next three quarters saw a ~75% increase at prices between $45.50 and $51.50. Q4 2016 saw an about turn: ~55% sold at prices between $46 and $54 and that was followed with a ~23% reduction this quarter at prices between $44.50 and $49.50. The stock currently trades at $48.06.American Express (AXP), Diageo plc (DEO), MasterCard Inc. (MA), National Western Life (NWLI), and Union Pacific (UNP): These small 13F positions (less than ~1% of the US long portfolio) saw minor reductions this quarter.Note: The firm has a large stake in Diageo although the 13F position is very small. The rest of the shares are held in the native UK market which is outside the realm of 13F filings.Kept Steady:Phillips 66 (PSX), Coca Cola FEMSA (KOF), and US Bancorp (USB): These are very small (less than ~1% of the US long portfolio each) stakes kept steady this quarter.Other minutely small (less than 0.5% of the US long portfolio each) positions in the 13F portfolio include American National Insurance (ANAT), CKX lands (CKX), Connecticut Water Service (CTWS), General Electric (GE), GlaxoSmithKline (GSK), HSBC Holdings (HSBC), Leucadia National (LUK), Merck & Co. (MRK), Novartis AG (NVS), NOW Inc. (DNOW), Royal Dutch Shell (RDS.A) (RDS.B), Shenandoah Tel. (SHEN), Shire plc (SHPG), Signet Jewelers (SIG), Torchmark Corp. (TMK), Total SA (TOT), Trustmark Corp (TRMK), UniFirst Corporation (UNF), and Williams Sonoma (WSM).Note: GlaxoSmithKline, HSBC, Novartis AG, Royal Dutch Shell, and Total SA are top positions in the firm. Shares in these European businesses are primarily held in their native markets and so are outside the realm of US 13F filings.The spreadsheet below highlights changes to Tweedy Browne’s US stock holdings in Q2 2017:Regulatory filings thru 5/22/2017: None.Info from : New Stake - BIDU - thesis: 50% margins in Search masked by money losing subsidiaries. Revenue growth concerns due to a medical scandal &some market share loss in advertising. EBITDA multiple is cheap at 11.5x (2017 projection)."