"Tracking John Rogers’ Ariel Investments Portfolio – Q3 2021 Update"
"Ariel Investments’ 13F portfolio value increased from $10.64B to $10.94B this quarter.They increased Madison Square Garden Entertainment, Madison Square Garden Sports, and ADT Inc. while decreasing Meredith Corp, Vail Resorts, and Keysight Technologies.The top three positions are Madison Square Garden Entertainment, Baidu, and Philip Morris and they add up to ~11% 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 11/12/2021. John Rogers’ 13F portfolio value increased ~3% from $10.64B to $10.94B this quarter. The portfolio is diversified with recent 13F reports showing around 150 positions. There are 61 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 Madison Square Garden Entertainment, Baidu, Philip Morris, Lazard, and First American Financial. They add up to ~18% of the portfolio. Please visit our  Portfolio series to get an idea of their investment philosophy and our  for the fund’s moves during Q2 2021.Their flagship mutual fund is the Ariel Fund (ARGFX) incepted in 1986. Ariel Fund has a lifetime annualized return of 11.48% compared to 11.14% for the Russell 2500 Index and 11.01% for the S&P 500 Index. In the most recent 10-year period, it has underperformed the S&P index: 15.79% vs 16.63%. 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 Roche Holding AG (RHHBY), Deutsche Boerse AG (DBOEY), Endesa SA (ELEZF), Nintendo Company (NTDOY), Michelin (MGDDY), Koninklijke Ahold Delhaize (ADRNY), and Snam SpA (SNMRY).New Stakes:Manchester United (MANU) and Gentex Corp (GNTX): These are the new positions this quarter. MANU is a 1.17% of the portfolio position established this quarter at prices between $14.75 and $18.30 and the stock currently trades at $14.41. The 0.98% GNTX stake was purchased at prices between $30.75 and $34.10 and the stock currently trades at $34.84.Note: Regulatory filings since the quarter ended show them owning 10.6M shares (20.1% of business). This is compared to 6.58M shares in the 13F report.Stake Disposals:MSG Networks: 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. There was a ~15% selling in Q1 2021 at prices between ~$15 and ~$21 while last quarter there was a ~25% stake increase. The stake was at 1.46% of the portfolio. MSG Entertainment merged with MSG Networks in an all-stock (0.172 shares of MSGE for each MSGN held) deal that closed in July.Stake Increases:Madison Square Garden Entertainment (MSGE): MSGE is a 3.75% of the portfolio stake built over the last six quarters at prices between ~$62.40 and ~$116 and the stock currently trades at $70.94.Note: Ariel Investments has a ~16% ownership stake in Madison Square Garden Entertainment.Baidu Inc. (BIDU): BIDU is currently the second-largest position at 3.66% 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. Q1 2021 saw a ~18% selling at prices between ~$204 and ~$340 while this quarter there was a ~12% stake increase at prices between ~$137 and ~$202. The stock currently trades at ~$144.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 three quarters through Q3 2020 had also seen a ~20% stake increase. Q1 2021 saw another ~15% stake increase at prices between ~$79 and ~$91 while last quarter there was a ~20% selling at prices between ~$88 and ~$101. The stock currently trades at $93.54, and it is currently the third largest position at 3.53% of the portfolio. There was a marginal increase this quarter.Lazard Ltd. (LAZ): LAZ is a 3.35% 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. Recent activity follows. 2019 saw a ~15% increase at prices between ~$31 and ~$40.50. Last three quarters saw another ~45% stake increase at prices between $38.70 and $48.75. The stock is now at $45.16.Note: Ariel Investments have a ~7% ownership stake in Lazard.Mattel Inc. (MAT): The 2.82% 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 $21.11. Last six quarters have seen only minor adjustments.Kennametal Inc. (KMT): KMT is a 2.74% 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. Last three quarters have seen a ~43% stake increase at prices between ~$33 and ~$42. The stock currently trades at $36.31.Note: Ariel Investments has a ~10% ownership stake in Kennametal Inc.BOK Financial (BOKF) and Mohawk Industries (MHK): These two stakes were built over the last two years. The 2.69% BOKF stake was built at prices between ~$37 and ~$98. The stock currently trades at ~$105. MHK is  a 2.14% of the portfolio position purchased at prices between ~$59 and ~$168 and it is now at ~$175. Both stakes saw minor increases in the last two quarters.Jones Lang LaSalle (JLL): The 2.56% 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. H2 2020 saw a ~25% stake increase at prices between ~$90 and ~$154. The stock currently trades at ~$268. There was a ~12% further increase over the last three quarters.Stericycle Inc. (SRCL): SRCL is a 2.49% 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. Since then the activity had been minor. Q1 2021 saw a ~20% stake increase at prices between ~$65 and ~$72.50. The stock currently trades at $59.83. Last two quarters have seen a ~10% further increase.Nielsen Holdings (NLSN): The 2.46% 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. Q4 2020 saw a similar increase at prices between ~$13.50 and ~$21. The stock currently trades at $21.21. Last three quarters have seen a combined ~30% increase.Snap-On Inc. (SNA): SNA is a ~2% 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 ~$214. Last few years have seen only minor adjustments.Northern Trust (NTRS): NTRS is a 1.89% 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. Last several quarters have seen only minor adjustments. The stock currently trades at ~$121.ADT Inc. (ADT) and Progressive Corporation (PGR): ADT is a 1.80% of the portfolio position purchased over the last two quarters at prices between ~$8.50 and ~$11.50 and the stock currently trades at $8.66. The small 0.72% PGR stake was established last quarter at prices between ~$92 and ~$107 and the stock is now at ~$103. There was a minor increase this quarter.Note: Progressive is back in the portfolio after a quarter’s gap.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 in Q3 2020 at prices between ~$62 and ~$78. That was followed with a ~15% further increase in Q4 2020. Last two quarters saw a similar reduction while this quarter there was a minor increase. The stock currently trades at $72.87, and the stake is at 1.67% of the portfolio.Axalta Coating (AXTA): The 1.54% AXTA stake was built over the last two quarters at prices between $26.75 and $33.75 and the stock currently trades at $32.42. There was a ~3% increase this quarter.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. Q1 2021 saw a ~40% stake increase at prices between ~$111 and ~$131. The stock currently trades at ~$134 and the stake is at 1.52% of the portfolio. Last two quarters have seen minor increases.Adtalem Global Education (ATGE), Affiliated Managers Group (AMG), Aflac Inc. (AFL), Amdocs Ltd. (DOX), BorgWarner Inc. (BWA), Brink’s Co (BCO), Check Point Software (CHPK), Credicorp Ltd. (BAP), Cardinal Health (CAH), CBRE Group (CBRE), Core Laboratories (CLB), Johnson & Johnson (JNJ), Madison Square Garden Sports (MSGS), Masco Corp. (MAS), nVent Electric (NVT), OneSpaWorld Holdings (OSW), Simpson Manufacturing (SSD), Stanley Black & Decker (SWK), Tegna Inc. (TGNA), Trip.coom (TRIP), Walgreens Boots Alliance (WBA), and Zimmer Biomet Holdings (ZBH): These small (less than ~1.5% of the portfolio each) positions were increased this quarter.Note: Ariel Investments has significant ownership stakes in OneSpaWorld and Core Laboratories. They increased their position in Core Laboratories (~4.3M shares to ~7.2M shares – 15.5% of business) after the quarter ended.Stake Decreases:First American Financial (FAF): FAF is a 3.23% 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 in Q4 2020 at prices between ~$44.50 and ~$54.50. That was followed with a similar increase in Q1 2021 at prices between ~$51 and ~$58. The stock is now at $77.91. Last two quarters have seen only minor adjustments.Interpublic Group (IPG): The 2.89% 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. Recent activity follows: 2018 saw a ~20% selling at prices between $20 and $25 while next year saw a ~40% stake increase at prices between $19.50 and $24. Since then, the activity had been minor. There was a ~12% trimming this quarter. The stock currently trades at $37.89.Microsoft Corp (MSFT): MSFT is now at 2.80% 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 seven quarters saw another ~55% selling at prices between ~$137 and ~$305. The stock currently trades at ~$343. They are harvesting gains.Envista Holdings (NVST): The 2.33% 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. The stock currently trades at $46.74. Last five quarters have seen only minor adjustments.KKR & Company (KKR): KKR is a 1.93% 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 year saw a ~45% selling at prices between ~$18.50 and ~$40.50. The stock currently trades at $77.25. Last three quarters have seen only minor adjustments.Laboratory Corp (LH): LH is a 1.63% 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. 2016-2020 timeframe had seen consistent selling. The stake was reduced by ~70% over that period at prices between ~$105 and ~$215. The stock currently trades at ~$307. Last three quarters have seen a ~10% trimming.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. The three quarters through Q1 2021 saw a ~88% selling at prices between ~$22 and ~$100 while last quarter saw an about turn: ~300% stake increase at prices between ~$38 and ~$45. The stock is currently at $30.12, and the stake is at ~1% of the portfolio. There was a minor ~2% trimming this quarter.Berkshire Hathaway (BRK.B), Charles Schwab (SCHW), Charles River Laboratories (CRL), Goldman Sachs (GS), Janus Henderson Group (JHG), Littelfuse Inc. (LFUS), Keysight Technologies (KEYS), Korn Ferry (KFY), Knowles Corp (KN), Meredith Corp (MDP), Vail Resorts (MTN), and Zebra Technology (ZBRA): These small (less than ~1.25% of the portfolio each) stakes were reduced during the quarter.Note: Ariel Investments has significant ownership stakes in the following businesses: Meredith Corp and Knowles Corp.Kept Steady:None.Below is a spreadsheet that shows the changes to John Rogers’ Ariel Investments 13F portfolio holdings as of Q3 2021:Source: John Vincent. Data constructed from Ariel Investments’ 13F filings for Q2 2021 and Q3 2021.Regulatory filings from 6/25/2021 through 8/23/2021: 13G/As – 7/9 – MSGE – 3.2M shares – 16.3% of business, Mind Technology – MIND – 1.29M shares – 9.3% of business, GlassBridge Enterprises – GLAE – zero, Cumberland Pharma – CPIX - ~12K shares – 0.1% of business."