"Tracking Tweedy Browne Portfolio – Q4 2019 Update"
"Tweedy Browne’s 13F portfolio value decreased marginally from $2.83B to $2.77B this quarter.The largest five individual stock positions are Berkshire Hathaway, Alphabet, Johnson & Johnson, Cisco Systems, and Baidu, and they account for ~60% of the portfolio.Tweedy Browne increased Baidu while reducing Unilever.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 02/14/2020. Please visit our  series to get an idea of their investment philosophy and our  for the fund’s moves during Q3 2019.This quarter, Tweedy Browne’s 13F portfolio value decreased marginally from $2.83B to $2.77B. The number of holdings decreased from 47 to 43. The largest position is Berkshire Hathaway at ~13% of the portfolio. Largest five individual stock positions are Berkshire Hathaway, Alphabet, Johnson & Johnson, Cisco Systems, and Baidu. Combined they are at ~60% of the portfolio. 27 of the 43 13F stakes are significantly large (over ~0.5% of the 13F 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 ~90% of the portfolio and cash at ~14%. The top five holdings are Nestle (NSRGY), Diageo plc (DEO), Safran SA (SAFRY) (SAFRF), Heineken (HKHHF), and Roche Holding (RHHBY). Together, they are at ~20% of the fund. Per Q4 2019 Commentary, the fund returned 14.63% for 2019 compared to 24.64% for MSCI EAFE. Since inception (1993), annualized returns are at 9.02% compared to 6.30% for MSCI EAFE.New Stakes:None.Stake Disposals:Devon Energy (DVN): The bulk of the original DVN stake was purchased in 2012 when around 2.2M shares were acquired at prices between $51 and $75. The position had seen selling since Q3 2016. Recent activity follows: Q2 2018 saw a ~24% reduction at prices between $30 and $43 and that was followed with a ~30% selling in Q4 2018 at prices between $21 and $41. The stock currently trades at $7.27. Last three quarters had seen minor selling. The disposal this quarter was at prices between $19.80 and $26.50.Avnet Inc. (AVT): AVT was a ~1% of the portfolio stake purchased in Q1 2016 at prices between $38 and $45. This quarter saw the stake disposed at prices between $39.20 and $44.50. The stock is currently at $23.44.Note: Tweedy Browne’s Q4 2019 commentary mentions that the exit of Avnet for a modest profit was done due to competitive concerns.Stake Increases:Baidu Inc. (BIDU): BIDU is a large 7.41% portfolio stake purchased in Q1 2017 at prices between $168 and $186 and the stock is now well below the low end of that range at ~$99. The position was increased by roughly two-thirds in Q2 2019 at prices between $108 and $185. Last quarter saw an about turn: 40% selling at prices between $94 and $119. There was a ~15% stake increase this quarter at prices between $99.50 and $129. For investors attempting to follow, BIDU is a good option to consider for further research.Fox Corporation (FOX): The FOX stake was a minutely small position established in Q2 2019. Last quarter saw the stake built to a 1.45% portfolio position at prices between $31.50 and $38. The stock currently trades well below that range at $25.56. There was a ~15% stake increase this quarter.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. For investors attempting to follow, FOX is a good option to consider for further research.Coca Cola FEMSA (KOF): The KOF stake saw a ~55% stake increase this quarter at prices between $55 and $62. The stock currently trades at $45.30.Stake Decreases: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 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. The stock currently trades at ~$176. There was a ~12% selling in Q4 2017 and that was followed with minor trimming over the next three quarters. Q4 2018 saw a ~10% overall increase while last four quarters have seen only marginal activity.Alphabet Inc. (GOOG) (GOOGL): GOOG is a top-five ~12% position first purchased in 2012 at much lower prices compared to the current trading price of ~$1115. Q3 2016 saw a ~9% trimming at prices between $692 and $787. Since then, the activity has been minor.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 and that was followed with minor trimming over the last three years. The share count is now at ~1.97M. The stock currently trades at ~$125. Tweedy Browne is harvesting long-term gains from this position.Cisco Systems (CSCO): CSCO position was first purchased in 2011. It is currently their fourth-largest 13F stake at ~10% 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 $33.20. 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 two quarters have also seen minor trimming.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 below the low end of those ranges at $29.52. Q4 2016 saw a ~4% increase while the three years saw minor trimming.Wells Fargo (WFC): WFC is a fairly large position at ~5% of the 13F 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. 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 near the low end of those ranges at $27.20. There was marginal trimming over the last three quarters.AutoZone (AZO): AZO is a 4.42% 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 ~$978. 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 marginal trimming in the last two quarters.ConocoPhillips (COP): COP was a minutely small position in 2007. The majority of the current 1.6M share stake (3.77% of portfolio) was purchased in 2009 at prices between $22 and $40. The stock currently trades at $28.20. The three quarters thru Q3 2016 had seen minor reductions. Q4 2016 saw a ~14% selling at prices between $40.50 and $53. 2017 saw another similar trimming at prices between $43 and $56. There was a ~9% reduction in Q2 2018 and minor trimming in the last six quarters. Tweedy Browne is harvesting 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.3M Company (MMM): MMM is a ~2% 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. Last five quarters had also seen a ~15% combined selling at prices between $160 and $220. The stock is now at ~$134. Tweedy Browne is harvesting huge long-term gains. Last two quarters also saw minor trimming.Emerson Electric (EMR): EMR is a long-term 1.82% 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 $46.18. Last four quarters have seen minor trimming.MRC Global (MRC): The 1.79% 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 in Q1 2017. Q3 2017 saw a ~15% increase at prices between $15.40 and $17.50. This quarter saw another ~20% selling at prices between $10.80 and $15.15. The stock is now at $4.54.Note: Tweedy Browne controls 4.41% of MRC Global.Goldman Sachs (GS): GS is a small 0.72% of the portfolio stake established in Q4 2018 at prices between $155 and $232. The stock currently trades just below the low end of that range at ~$151. Last year saw minor trimming.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. 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. The stock is now at $34.94 and the stake is at 0.74%. Last year saw minor selling.Note: The prices quoted above are adjusted for the 2-for-1 stock-split in February 2017.American Express (AXP), Diageo plc (DEO), National Western Life (NWLI), Novartis AG (NVS), Phillips 66 (PSX), US Bancorp (USB), 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. The rest of the shares are held in London market which is outside the realm of 13F filings.Kept Steady:None.Other minutely small (less than 0.5% of the 13F portfolio each) positions in the 13F portfolio include Alcon Inc. (ALC), American National Insurance (ANAT), Baxter International (BAX), Carnival Corp (CCL), CKX lands (CKX), CNH Industrials (CNHI), GlaxoSmithKline (GSK), HSBC Holdings (HSBC), Halliburton (HAL), Merck & Company (MRK), Royal Dutch Shell (RDS.A) (RDS.B), Shenandoah Tel. (SHEN), Total SA (TOT), UniFirst Corporation (UNF), and WPP plc (WPP).Note: GlaxoSmithKline, HSBC, Novartis AG, Royal Dutch Shell, Total SA, and WPP plc 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 13F stock holdings in Q4 2019:Info from Commentary – Q3 2019: PERFORMANCE – TBGVX – negative 0.86% for Q3 2019 vs 2.31% for the MSCI EAFE (hedged) – from 1993 inception 8.98% vs 6.14%. EXITS: AGCO, Daily Mail, Euromoney Institutional, Hyundai, Kia, and Lumax Intl. The AGCO, Daily Mail, Lumax, and MasterCard exits were based on valuation. TRIMMED –Axel Springer, Baidu, G4S plc, HSBC Holdings, Royal Dutch Shell plc, Sina Corp, Standard Chartered, and Thinking Electronic. Baidu reduction was due to their estimates coming down. INCREASED - None. Commentary –Fox purchase – they are focused on Live programming and Fox News is highly profitable – also significant insider buying – they purchased at a price estimated to be at 8% earnings-yield.Regulatory filings thru 11/7/2019: None."