"Tracking John Rogers’ Ariel Investments Portfolio – Q4 2020 Update"
"Ariel Investments’ 13F portfolio value increased from $6.89B to $8.88B this quarter.They increased Nielsen Holdings, First American Financial, Madison Square Garden Entertainment, & FLIR Systems while decreasing Nokia and dropping Generac Holdings.The top three positions are Baidu, Philip Morris, and Microsoft and they add up to ~15% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Ariel Investments’ 13F stock portfolio on a quarterly basis. It is based on Ariel Investments’ regulatory  filed on 02/12/2021. John Rogers’ 13F portfolio value increased ~29% from $6.89B to $8.88B this quarter. The portfolio is diversified with recent 13F reports showing around 150 positions. There are 59 securities that are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five stakes are Baidu, Philip Morris, Microsoft, Mattel, and Envista Holdings. They add up to ~21% of the portfolio. Please visit our  Portfolio series to get an idea of their investment philosophy and our  for the fund’s moves during Q3 2020.Their flagship mutual fund is the Ariel Fund (ARGFX) incepted in 1986. Ariel Fund has a lifetime annualized return of 11% compared to 10.76% for the Russell 2500 Index and 10.78% for the S&P 500 Index. In the most recent 10-year period, it has underperformed the S&P index by a substantial margin: 10.04% vs 13.88%. The other mutual funds in the group are Ariel Appreciation Fund (CAAPX), Ariel Focus Fund (ARFFX), Ariel International Fund (AINTX), and Ariel Global Fund (AGLOX).Note: Some of the top holdings in their International and Global funds are not in the 13F report as they are not 13F securities. They are Deutsche Boerse AG (DBOEY), Nintendo Company (NTDOY), Roche Holding AG (RHHBY), Koninklijke Ahold Delhaize (ADRNY), Michelin (MGDDY), Snam SpA (SNMRY), and Endesa SA (ELEZF).Stake Disposals:Generac Holdings (GNRC): The very small 0.65% GNRC position was first purchased in Q1 2019 in the low-50s price range. The disposal this quarter was at prices between ~$196 and ~$233. The stock is now at $337.Stake Increases:Baidu Inc. (BIDU): BIDU is currently the top position at 7.14% of the portfolio. It was established in 2013 with the bulk of the current position purchased in 2015 at prices between ~$134 and ~$234. The interim years had seen minor buying and in 2018 there was a ~25% increase at prices between $157 and $273. Q1 to Q3 2019 saw another one-third increase at prices between ~$97 and ~$142. H1 2020 had seen a ~50% stake increase at prices between ~$84 and ~$145. The stock currently trades at ~$336. Last two quarters have also seen minor increases.Envista Holdings (NVST): The 2.69% NVST stake was purchased in Q1 2020 at prices between ~$12 and ~$33. There was a ~75% stake increase next quarter at prices between ~$13 and ~$24.50. That was followed with minor increases in the last two quarters. The stock currently trades at $38.30Lazard Ltd. (LAZ): LAZ is a 2.64% of the portfolio position first purchased in 2009 at prices between ~$19 and ~$38. Next year saw a stake-tripling at prices between ~$25 and ~$36. The interim period saw further buying but in 2014 there was a ~25% selling at prices between ~$39 and ~$50. Since then, the stake has remained relatively steady although adjustments were made every quarter. 2019 saw a ~15% combined increase at prices between ~$31 and ~$40.50. The stock is now at ~$41.  Last four quarters have seen only minor adjustments.Note: Ariel Investments have a ~5% ownership stake in Lazard.Interpublic Group (IPG): The 2.58% IPG stake is a very long-term position that goes back almost two decades. It was first purchased in 2001 and the position was built to over 41M shares by 2005 at prices between $9 and $42. Since then, the stake has wavered. Recent activity follows: 2018 saw a ~20% selling at prices between $20 and $25. 2019 had seen a ~40% stake increase at prices between $19.50 and $24. The stock currently trades at $26.49. Last four quarters have seen only minor adjustments.Nielsen Holdings (NLSN): The 2.57% NLSN stake was purchased in 2017 at prices between ~$36 and ~$45. Next year saw a ~60% stake increase at prices between $22 and $37.50 and that was followed with a ~45% further increase in 2019 at prices between $19.50 and $27. This quarter saw a similar increase at prices between ~$13.50 and ~$21. The stock currently trades at $23.60.First American Financial (FAF): FAF is a 2.54% of the portfolio stake established in 2011 at prices between ~$11 and ~$17. 2013 also saw a ~25% stake increase at prices between ~$21 and ~$28. The position has seen consistent reductions since 2015. Recent activity follows: 2019 had seen a ~20% selling at prices between ~$45 and ~$64. There was a ~25% stake increase this quarter at prices between ~$44.50 and ~$54.50. The stock is now at $56.34.Kennametal Inc. (KMT): KMT is a 2.50% of the portfolio position. It was established in 2014 at prices between $34 and $52. The position had seen minor buying over the years. Q1 2020 saw a ~15% stake increase at prices between $15 and $37. There was a ~10% trimming in Q2 2020 while last two quarters saw minor increases. The stock currently trades at $36.95.Note: Ariel Investments has a ~7% ownership stake in Kennametal Inc.Madison Square Garden Entertainment (MSGE): MSGE is a 2.49% of the portfolio stake built over the last three quarters at prices between ~$64 and ~$105 and the stock currently trades at $96.31.Note: Ariel Investments has a ~11% ownership stake in Madison Square Garden Entertainment.Stericycle Inc. (SRCL): SRCL is a 2.42% of the portfolio position established in Q1 2018 at prices between ~$58 and ~$76. The bulk of the current stake was purchased in H2 2018 at prices between ~$36.50 and ~$71. The stock currently trades at $67.78. Last two years have seen only minor activity.Snap-On Inc. (SNA): SNA is a 2.08% of the portfolio stake purchased in 2012 at prices between ~$52 and ~$80. Next year saw a ~50% stake increase at prices between ~$80 and ~$110. The stock currently trades at ~$194. Last few years have seen only minor adjustments.Gilead Sciences (GILD): A very small stake in GILD was first purchased in 2012. The position had seen consistent increases every year since. 2014-2015 and 2017 saw bulk buying at prices between ~$65 and ~$120. There was a ~40% stake increase last quarter at prices between ~$62 and ~$78. That was followed with a ~15% further increase this quarter. The stock currently trades at $64.11. The stake is currently at ~2% of the portfolio. For investors attempting to follow, GILD is a good option to consider for further research.Jones Lang LaSalle (JLL): The 1.70% JLL position is a very long-term stake first purchased in 2001. Next year saw a huge stake build-up at prices between ~$14.50 and ~$25. The position has seen selling since 2004. The bulk of the selling happened in 2006 at prices between ~$55 and ~$93. The last decade had also seen consistent selling almost every year. Last two quarters have seen a ~25% stake increase at prices between ~$90 and ~$154. The stock currently trades at ~$167.MSG Networks (MSGN): The MSG Networks position goes back to 2011 when the company was called Madison Square Garden. It was established at prices between $6.75 and $8.50. 2013 saw a one-third selling at prices between $13.50 and $19. Following the Madison Square Garden split-off in 2015, the position was increased from ~1.6M shares to almost 9M shares by 2017 at prices between ~$15 and ~$26. Next year saw a ~23% reduction at prices between ~$19 and ~$27 while 2019 saw a similar increase at prices between ~$14 and ~$25. The stock is currently at $16.87 and the stake is at 1.68% of the portfolio. Last two quarters have seen minor increases.Note: Ariel Investments has a ~23% ownership stake in MSG Networks.Johnson & Johnson (JNJ): The ~2% JNJ position was established in 2015. The stake has stayed remarkably steady since. The stock currently trades at ~$162.Affiliated Managers Group (AMG), BOK Financial (BOKF), Brink’s Co (BCO), Cardinal Health (CAH), Core Laboratories (CLB), FLIR Systems (FLIR), Janus Henderson Group (JHG), Knowles Corp (KN), Masco Corp. (MAS), Meredith Corp (MDP), Mohawk Industries (MHK), OneSpaWorld Holdings (OSW), Simpson Manufacturing (SSD), Tegna Inc. (TGNA), US Silica (SLCA), Vanguard FTSE Dev Mkts ETF (VEA), and Walgreens Boots Alliance (WBA): These small (less than ~1.5% of the portfolio each) stakes were increased this quarter.Note: Ariel Investments have significant ownership stakes in the following businesses: ~5% of Knowles Corp, ~12% of OneSpaWorld, ~11% of Meredith Corp, and ~12% of US Silica Holdings.Stake Decreases:Philip Morris (PM): A very small position in PM was first purchased in 2013. By 2017, the stake was built to a ~1M share stake. Next year saw the position increased by ~220% at prices between $66 and $110. 2019 had seen another ~20% stake increase at prices between $70 and $91. The stock currently trades at $86.50 and it is currently the second largest position at ~4% of the portfolio. Last three quarters had also seen a ~20% stake increase. For investors attempting to follow, PM is a good option to consider for further research. There was a ~4% trimming this quarter.Microsoft Corp (MSFT): MSFT is a top three position at 3.57% of the 13F portfolio. It was a very small stake first purchased in 2010. The 2013-2015 timeframe saw a 2.2M share build-up at prices between ~$26 and ~$56. Recent activity follows: 2019 had seen a ~22% reduction at prices between ~$100 and $160. Last four quarters saw another ~35% selling at prices between ~$135 and ~$232. The stock currently trades at ~$235. They are harvesting gains.Mattel Inc. (MAT): The top five 3.13% MAT position was first purchased in 2016 at prices between ~$25 and ~$34. Next year saw a stake doubling at prices between ~$13 and ~$30.50. 2018 also saw a one-third stake increase at prices between ~$9.50 and ~$18. Q1 2019 saw a ~12% trimming while the next two quarters saw another one-third increase at prices between ~$9.50 and ~$14.50. Q1 2020 saw another ~15% stake increase at prices between $7.25 and $14.75. The stock currently trades at $19.46. For investors attempting to follow, MAT is a good option to consider for further research. Last three quarters have seen only minor adjustments.Northern Trust (NTRS): NTRS is a 1.80% very long-term position first purchased in 2002. The 2002-2004 timeframe saw a ~10M share stake built at prices between ~$30 and ~$60. The position has since been sold down. The bulk of the selling was in the 2005-2007 timeframe at prices between ~$42 and ~$81. Recent activity follows: last three quarters saw minor trimming. The stock currently trades at $97.63.Berkshire Hathaway (BRK.B): BRK.B is a long-term position first purchased in 2011. Recent activity follows. Q2 2020 saw a ~25% stake increase at prices between $169 and $202. The stock is now at ~$245. Last two quarters have seen a ~12% trimming.Laboratory Corp (LH): LH is a 1.59% of the portfolio stake first purchased in 2008 at prices between ~$60 and ~$80. That original stake was sold out in 2011 at prices between ~$73 and ~$101. 2014 saw a larger position built at prices between ~$89 and ~$111. Next year also saw a ~30% stake increase at prices between ~$112 and ~$127. Last five years has seen consistent selling. The stake was reduced by ~70% over that period at prices between ~$105 and ~$215. The stock currently trades at ~$244.KKR & Company (KKR): KKR is a 1.56% of the portfolio position purchased in 2011 at prices between $10.50 and $19. The position had remained relatively steady over the years although most quarters had seen minor adjustments. Last four quarters saw a ~45% selling at prices between ~$18.50 and ~$40.50. The stock currently trades at $45.35.ViacomCBS Inc. (VIAC) previously CBS Corporation: The original CBS position goes back to 2006 when around 6.2M shares were purchased at prices between $24 and $32. The position size peaked at over 13M shares in 2008. That year saw a ~175% stake increase at prices between $5 and $25. Last December, CBS Corporation merged with Viacom to form ViacomCBS. Ariel Investments also had a position in Viacom for which they got shares in the combined business in the ratio 1:0.59625. Including that, Q4 2019 saw a minor stake increase. There was a ~55% stake increase in Q1 2020 at prices between ~$11 and ~$42. Last two quarters saw another ~45% selling at prices between ~$22 and ~$37. The stock is currently at $66.14 and the stake is at 1.55% of the portfolio.J M Smucker (SJM): SJM is a very long-term stake that has been in the portfolio for well over a decade. The original huge stake was sold down in 2008. Q1 2020 saw another ~30% selling at prices between ~$96 and ~$119. The stock currently trades at ~$114 and the stake is at 1.25% of the portfolio. There was a ~12% trimming over the last two quarters.Adtalem Global Education (ATGE), Aflac Inc. (AFL), Amdocs Ltd. (DOX), BorgWarner Inc. (BWA), CBRE Group (CBRE), Charles River Laboratories (CRL), Charles Schwab (SCHW), Goldman Sachs (GS), Keysight Technologies (KEYS), Littelfuse Inc. (LFUS), NetApp Inc. (NTAP), Nokia Corp (NOK), Progressive Corp (PGR), Stanley Black & Decker (SWK), Tapestry (TPR), Vail Resorts (MTN), Verizon Communications (VZ), Zebra Technology (ZBRA), and Zimmer Biomet Holdings (ZBH): These small (less than ~2% of the portfolio each) stakes were reduced during the quarter.Kept Steady:None.Note: Although the position sizes relative to the 13F portfolio are very small, Ariel Investments have significant ownership stakes in the following small-cap businesses: 180 degree capital (TURN), Atlassian (TEAM, Ballantyne Strong (BTN), Cumberland Pharma (CPIX), Glassbridge Enterprises (GLAE), GAIA Inc. (GAIA), GSI Technology (GSIT), RealNetworks (RNWK), Mind Technology (MIND), and MTS Systems (MTSC).Below is a spreadsheet that shows the changes to John Rogers’ Ariel Investments 13F portfolio holdings as of Q4 2020:Regulatory filings thru 12/19/2020:13G/A – 12/9 – STRT (Strattec Security) – 41K shares – 1.1% of business. 13G – 12/9 – MSGE – 1.91M shares – 10.2% of business. 13G – 12/9 – CLB (Core Laboratories) – 4.57M shares – 10.3% of business. 13G – 11/10 – OSW (OneSpaWorld Holdings) – 7.47M shares – 11% of business. 13G – 11/10 – MDP (Meredith Corp) – 4.62M shares – 11.4% of business."