"Tracking Charles Akre's Akre Capital Management Portfolio – Q1 2020 Update"
"Chuck Akre’s portfolio value decreased from $10.91B to $10.29B this quarter.Akre Capital Management added Adobe and Live Nation during the quarter.The top three positions are American Tower, MasterCard, and Moody’s, and they add up to ~40% 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 05/11/2020. Please visit our  series to get an idea of their investment philosophy and our  for their moves in Q4 2019.This quarter, Akre’s 13F portfolio value decreased ~6% from $10.91B to $10.29B. The number of positions increased from 25 to 28. The largest five stakes are American Tower, MasterCard, Moody’s Corporation, Visa, and SBA Communications. They account for ~55% of the total portfolio value.AUM is distributed among private funds, separately managed accounts, and the Akre Focus Mutual Fund (AKREX) (AKRIX) (AKRSX). Since the 2009 inception, the mutual fund’s annualized returns are at 15% compared to 11.50% for the S&P 500 Index. For Q1 2020, the fund returned negative 11.20% compared to negative 19.60% for the S&P 500 Index. Their cash allocation came down during the quarter from ~17% to ~10%. Akre coined the term "compounding machines" to describe the type of businesses he invests in. To learn more about that investing style, check out .New Stakes:Adobe Inc. (ADBE), Live Nation Entertainment (LYV), and Marriott International (MAR): These are the new stakes established this quarter. ADBE is a 3.52% of the portfolio position purchased at prices between $285 and $383 and the stock currently trades at ~$365. The 2.42% of the portfolio stake in LYV was established at prices between $29.50 and $76 and it is now at $38.16. MAR is a minutely small 0.01% of the portfolio position.Stake Disposals:None.Stake Increases:MasterCard (MA): MA is currently the second-largest 13F stake at 14.90% 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 ~$272 per share. Last few quarters had seen minor trimming while this quarter there was a ~9% stake increase.Note: In a WealthTrack interview last November, 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.Visa Inc. (V): V is a large (top five) 8.21% 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. The stock is now at ~$180. This quarter saw a ~7% stake increase.Note: Visa stock split 4-for-1 in March 2015. The prices quoted above are adjusted for that split.Roper Technologies (ROP): ROP is a large 5.17% 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 stock is now at ~$357. There was a ~9% stake increase this quarter.CarMax Inc. (KMX): The 4.28% 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. The stock is now at ~$75. Last four quarters had also seen a ~17% stake increase at prices between $58 and $98 and that was followed with a ~20% further increase this quarter at prices between $44 and $102.KKR & Company (KKR): KKR is a 3.23% 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 stock currently trades at $25.71. This quarter also saw a ~11% further increase.Note: KKR converted from a partnership to a corporation effective July 1, 2018.Brookfield Asset Management (BAM): BAM is a ~3% of the portfolio stake established in Q3 2019 at prices between $32 and $36 and increased by ~18% last quarter at prices between $34 and $39. The stock currently trades at ~$31. This quarter saw a ~15% further increase at prices between $22 and $45.50.Note: the prices quoted are adjusted for the 3-for-2 stock-split last month.CoStar Group (CSTR) and Ansys Inc. (ANSS): These two positions were established last quarter and substantially increased this quarter. The 2.50% CSTR stake was purchased at prices between $544 and $617 and increased by ~75% this quarter at prices between $523 and $740. The stock currently trades at $637. ANSS is a ~1% of the portfolio position established at prices between $214 and $259 and increased by ~190% this quarter at prices between $205 and $296. It is now at $260.AlarmCom Holding (ALRM): ALRM is a small 0.67% first purchased in Q2 2015. Q3 2019 saw a ~130% stake increase at prices between $46 and $53. The stock currently trades at $49.66. Last two quarters have also seen a ~30% further increase. For investors attempting to follow, ALRM is a good option to consider for further research.Colony Capital (CLNY), Descartes Systems (DSGX), and Ollie’s Bargain (OLLI): These minutely small (less than ~0.25% of the portfolio each) stakes were increased this quarter.Stake Decreases:American Tower (AMT): AMT has been in the portfolio for well over seventeen years. It is the largest stake at ~15% 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 and the stock is now at ~$232. Since then, there has only been marginal activity.Note: Akre is very bullish on AMT – growth in wireless communication depends on them and incremental margins are at over 90%. Crown Castle (CCI) is another option in the same mold.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 ~$251 and is now the third-largest stake at ~12% of the portfolio. There was marginal trimming in the last four quarters.Note: Akre’s cost-basis on MCO is ~$39.O’Reilly Automotive (ORLY): ORLY is a large 5.39% 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 prices between $173 and $270. There has only been marginal activity since. The stock is now at ~$394.Note: In A WSJ interview in early 2018, Akre disclosed that the large increases in 2017 happened at an overall cost-basis of ~$195 per share.Markel Corporation (MKL): MKL is another fairly large 4.48% portfolio stake that has been in the portfolio for over twenty years. Recent activity follows: H2 2013 and H1 2014 saw a stake doubling at prices between $510 and $655 and since then the position has remained relatively steady. The stock is now at ~$837. Last two quarters have seen a ~10% combined trimming.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 has only increased ~90%. Markel currently trades at around ~1.2 times book value.Verisk Analytics (VRSK): VRSK is a 3.32% 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 ~$157. This quarter saw minor trimming.Dollar Tree (DLTR): DLTR is a 3.25% of the portfolio position first purchased in 2010 at a cost-basis in the low-20s. The stock currently trades at ~$76. Recent activity follows: there was a ~15% stake increase in Q2 2017 at prices between $66.50 and $83. This quarter saw a ~10% trimming.Berkshire Hathaway (BRK.A) (BRK.B) and Primo Water (PRMW): Berkshire Hathaway is now a minutely small 0.10% of the portfolio stake. This quarter saw the small position almost sold out at prices between $162 and $230. The stock is now at ~$173. The minutely small 0.14% PRMW stake was sold down by ~50% during the quarter.Note: Akre Capital Management has a ~4% ownership stake in Primo Water.Kept Steady:SBA Communications (SBAC): SBAC is a 6.46% 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. The stock currently trades well above those ranges at ~$289.Danaher Corporation (DHR): DHR is a 2.33% 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 ~$160.Note: The prices quoted above are adjusted for the Fortive spinoff in July 2017.Goosehead Insurance (GSHD): GSHD is a minutely small position established in Q4 2018 and increased over the next two quarters. Goosehead Insurance had an IPO in April 2018 priced at $10. Since then, the stock has traded as high as ~$62. It currently goes for $59.33.Lamar Advertising (LAMR): The minutely small 0.02% LAMR stake was kept steady during the quarter.Below is a spreadsheet that highlights the changes to Chuck Akre’s 13F stock portfolio as of Q1 2020:Q4 2019 Akre Focus Fund : Performance: 35.35% for the year compared to 31.49% for S&P. For Q4 3.45% vs 9.07%. Since 8/30/09 inception – 16.72% annualized compared 14.14% for the S&P. Cash: 17% compared to 18.8% as of Q3 – added two new positions and increased some stakes. Total positions now at 19.Regulatory Filings thru 02/26/2020: 13G – 2/10 – FOCS – 0, ESGR – 0, PRMO – 3.2M shares – 8.11% of business."