"Tracking Akre Capital Management Portfolio – Q3 2021 Update"
"Akre Capital Management portfolio value remained almost steady at $16.24B this quarter.They dropped Markel Corporation during the quarter.The top three positions are MasterCard, Moody’s, and American Tower and they add up to ~36% of the entire portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Akre Capital Management’s 13F portfolio on a quarterly basis. It is based on Akre’s regulatory  filed on 11/12/2021. Please visit our  series to get an idea of their investment philosophy and our  for their moves in Q2 2021.This quarter, Akre’s 13F portfolio value remained almost steady at $16.24B. The number of positions decreased from 24 to 23. The largest five stakes are MasterCard, Moody’s Corporation, American Tower, Visa, and O’Reilly Auto. They account for ~49% of the total portfolio value.AUM is distributed among private funds, separately managed accounts, and the Akre Focus Mutual Fund (AKREX) (AKRIX). Since the 2009 inception, the mutual fund’s annualized returns are at 17.87% compared to 15.48% for the S&P 500 Index. Through Oct 31, 2021, the fund returned 24.29% compared to 24.04% YTD for the S&P 500 Index. Their cash allocation has come down from ~17% to ~2% over the last seven quarters. Akre coined the term "compounding machines" to describe the type of businesses he invests in. To learn more about that investing style, check out .Note: positions in the mutual fund not reported through the 13F filings include Adyen NV (ADYEY), Constellation Software (CNSWF), and Topicus.com (TOITF). Topicus.com is a spinoff from Constellation Software that started trading in February 2021 at ~$55 per share. The stock currently trades at ~$98.New Stakes:None.Stake Disposals:Markel Corporation (MKL): MKL was a very long term stake that has been in the portfolio for over twenty years. H2 2013 and H1 2014 saw a stake doubling at prices between $510 and $655. The five quarters through Q4 2020 saw a ~50% combined selling at prices between $785 and $1341. The position was almost eliminated in Q1 2021 at prices between ~$945 and ~$1155. The remainder stake was disposed this quarter. The stock is now at ~$1242.Note: Akre saw 20-times compounding over 20 years on his first purchases of MKL. However, they also increased their original stake substantially twelve years ago at a cost-basis of $444 (2.5 times book value) and that portion increased by only ~180%.Stake Increases:MasterCard (MA): MA is currently the largest 13F stake at 12.56% of the portfolio. It was first purchased in 2010 and consistently increased since. Their overall cost-basis is ~$22 compared to the current price of ~$340 per share. Q1 2020 saw a ~9% stake increase. Last five quarters have seen only minor adjustments.Note: In a WealthTrack interview in November 2019, Akre commented that something extraordinary is happening at MasterCard – if the rate of return is cut down twice, they would still be earning above average. On the question “one investment every investor should own some of”, Akre responded with two: MasterCard and Visa.Stake Decreases:Moody’s Corporation (MCO): The initial purchase of MCO happened in Q1 & Q2 2012 in the high-30s price-range. Since then, the position size was doubled at higher prices. Recent activity follows: Q4 2016 saw a ~15% increase at prices between $94 and $109 and that was followed with a ~22% increase the following quarter at prices between $95 and $114. It currently trades at ~$387 and is now the second-largest stake at 12.29% of the portfolio. There was marginal trimming in the last nine quarters.Note: Akre’s cost-basis on MCO is ~$39.American Tower (AMT): AMT has been in the portfolio for well over eighteen years. It is the third-largest stake at 11.46% of the portfolio. Recent activity follows: the six years thru Q3 2018 saw consistent buying almost every quarter. The share count increased over four times from 1.7M shares to 7.1M shares during that period. The buying happened at prices between $65 and $118. Since then, there have only been minor adjustments. The stock is now at ~$261.Note: Akre is very bullish on AMT as incremental margins are at over 90% and growth in wireless communication is a significant tail-wind.O’Reilly Automotive (ORLY): ORLY is a large 5.94% portfolio stake first purchased in 2005. Over 800K shares were purchased at the time. The position was at 825K shares as of Q1 2017 - every year had seen adjustments but overall the stake had remained remarkably steady over that twelve-year period – the stock returned ~10x during that time. 2017 saw a ~130% stake increase at an average cost of ~$195. There had only been marginal adjustments since. Q1 2021 saw a ~14% selling at prices between ~$425 and ~$509. The stock is now at ~$636. This quarter saw marginal trimming.CarMax Inc. (KMX): The 5.60% KMX stake is a very long-term position first purchased in 2002. The bulk of the current stake was built over the four quarters thru Q2 2016 at prices between $42 and $68. There was a ~10% stake increase in Q4 2018 at prices between $57 and $74. 2019 had also seen a ~17% stake increase at prices between $58 and $98 and that was followed with a ~20% further increase in Q1 2020 at prices between $44 and $102. The two quarters through Q1 2021 had seen a ~12% selling. The stock is now at ~$147. There was marginal trimming in the last two quarters.KKR & Company (KKR): KKR is a 5.52% of the portfolio position established in Q1 2018 at prices between $20 and $24.50 and doubled next quarter at prices between $19.50 and $25.50. There was another ~25% increase in Q4 2018 at prices between $18.50 and $28. The first three quarters of last year had also seen a ~15% increase. Since then, there have only been minor adjustments. The stock currently trades at ~$78.Note: KKR converted from a partnership to a corporation effective July 1, 2018.Adobe Inc. (ADBE): ADBE is a 5.42% of the portfolio position purchased in Q1 2020 at prices between $285 and $383 and increased by roughly one-third last quarter at prices between ~$421 and ~$502. The stock currently trades at ~$688. There was a marginal trimming this quarter.CoStar Group (CSGP): The ~5% CSGP stake was purchased in Q4 2019 at prices between ~$54 and ~$62 and increased by ~75% next quarter at prices between ~$52 and ~$74. Q2 2020 saw another ~120% stake increase at prices between ~$53 and ~$73. The stock currently trades well above those ranges at ~$82. Last five quarters have seen only minor adjustments.Note: The prices quoted above are adjusted for the 10-for-1 stock split in June.Roper Technologies (ROP): ROP is a 4.57% of the portfolio position first purchased in Q2 & Q3 2014 at prices between $129 and $150. The stake saw incremental buying in the following quarters. In Q2 2016, there was a ~20% increase at prices between $165 and $185. The first three quarters of last year had seen a ~22% stake increase at prices between $254 and $453. The stock is now at ~$498. Last two quarters had seen a combined ~12% trimming. This quarter also saw marginal trimming.Brookfield Asset Management (BAM): BAM is a 4.32% of the portfolio stake established in Q3 2019 at prices between $32 and $36 and increased by ~18% next quarter at prices between $34 and $39. The first three quarters of last year had seen another ~45% increase at prices between $22 and $45.50. The stock currently trades at $59.60. Last few quarters have seen only minor adjustments.Note: the prices quoted are adjusted for the 3-for-2 stock-split last year.Verisk Analytics (VRSK): VRSK is a ~3% portfolio position first purchased in H2 2012 at prices between $46.50 and $51. 2015 saw a huge 3x stake increase at prices between $63 and $81. The position has since been kept relatively steady. The stock is currently at ~$230.Dollar Tree (DLTR): DLTR is a 2.11% of the portfolio position first purchased in 2010 at a cost-basis in the low-20s. Recent activity follows: there was a ~15% stake increase in Q2 2017 at prices between $66.50 and $83. Q1 2020 saw a ~10% selling and that was followed with marginal trimming in the next three quarters. Q1 2021 saw a ~20% reduction at prices between ~$98 and ~$116. The stock currently trades at ~$135. There was marginal trimming in the last two quarters.Berkshire Hathaway (BRK.B): The minutely small 0.03% stake in BRK.B was further reduced this quarter.Kept Steady:Visa Inc. (V): Visa is a large (top five) 7.19% of the portfolio stake. It was established in Q2 2012 at a cost-basis of around $30. Q2 2013 saw a one-third increase in the low-40s and that was followed with a 60% increase in Q2 2016 in the high 70s. Q1 2017 also saw another roughly one-third increase at prices between $79.50 and $90. Since then, the activity has been minor. The stock is now at ~$201.Note: Visa stock split 4-for-1 in March 2015. The prices quoted above are adjusted for that split.Salesforce.com (CRM): CRM is a 4.68% of the portfolio position established last quarter at prices between ~$211 and ~$246 and the stock currently trades well above that range at ~$301.SBA Communications (SBAC): SBAC is a 3.93% portfolio stake. The position is from H1 2014 at prices between $88 and $102. Q4 2015 saw a one-third increase at prices between $100 and $121 and a similar increase occurred in Q4 2016 as well at prices between $96 and $115. Last two quarters had seen a ~22% selling at prices between ~$236 and ~$323. The stock currently trades at ~$345.Danaher Corporation (DHR): DHR is a 3.10% of the portfolio position established in Q4 2013 at prices between $47 and $55 and increased by roughly five-times in Q2 2014 at prices between $52 and $59. The stock is now at ~$314.Note: The prices quoted above are adjusted for the Fortive spinoff in July 2017.Ansys Inc. (ANSS): ANSS is a 1.28% of the portfolio position established in Q4 2019 at prices between $214 and $259 and increased by ~190% next quarter at prices between $205 and $296. Q2 2020 saw another ~30% stake increase at prices between ~$211 and ~$294.  It is now at ~$403.AlarmCom Holding (ALRM): ALRM is a small ~1% position first purchased in Q2 2015. Q3 2019 saw a ~130% stake increase at prices between $46 and $53. The four quarters through Q3 2020 had seen a ~43% further increase at prices between ~$37 and ~$71. The stock currently trades at ~$83.DigitalBridge (DBRG) previously Colony Capital: The DBRG stake saw a ~6x increase in Q3 2020 at prices between ~$1.80 and ~$2.90. The stock currently trades at $7.56. The stake is still very small at 0.39% of the portfolio. There was a marginal trimming this quarter.Goosehead Insurance (GSHD): GSHD is a minutely small position established in Q4 2018 and increased over the next two quarters. Goosehead had an IPO in April 2018 priced at $10. It has since gone up ~13x and currently trades at ~$131. Q3 2020 saw a ~30% stake increase and that was followed with a ~20% increase last quarter. The position is still very small at 0.28% of the portfolio.Ollie’s Bargain (OLLI) and ThredUp Inc. (TDUP): These two minutely small stakes were kept steady this quarter.Below is a spreadsheet that highlights the changes to Akre Capital Management’s 13F stock portfolio as of Q3 2021:Source: John Vincent. Data constructed from Akre Capital Management’s 13F filings for Q2 2021 and Q3 2021.8/28/2021: There was a reader comment about including holdings not in the 13F report. The complete holdings of AKREX is published twice a year (April & October) and is available at  . Use this as a reference to update this information in our updates.Regulatory filings from 8/15/2021 to 11/15/2021: None.Performance Summary: Performance: 19.80% vs 17.99% for S&P 500 thru July 31, 2021. 17.92% since 2009 inception compared to 15.35% for the S&P 500. Cash: down from ~17% as of EOY 2019 to ~2% as of Q2 2021.10/29/2020 – Chuck Akre  EOY 2020."