"Tracking Ruane, Cunniff, & Goldfarb’s Portfolio – Q3 2022 Update"
"Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased from $7.67B to $6.73B this quarter. The number of positions remained steady at 31.They added Capital One Financial and increased Meta Platforms while decreasing Taiwan Semi, Netflix, and Micron during the quarter.The top three positions are UnitedHealth, Charles Schwab, and Formula One and they add up to ~28% of the portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Ruane, Cunniff & Goldfarb’s 13F portfolio on a quarterly basis. It is based on their regulatory  filed on 11/14/2022. Please visit our  article for an idea on their investment philosophy and our  for the moves during Q2 2022.This quarter Ruane, Cunniff, & Goldfarb’s 13F portfolio value decreased ~12% from $7.67B to $6.73B. The number of holdings remained steady at 31. 17 of those stakes are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The top three positions are at ~28% while the top five are at ~45% of the 13F assets: UnitedHealth, Charles Schwab, Formula One, Intercontinental Exchange, and Alphabet.The firm is best known as the investment advisor of the Sequoia Fund (SEQUX) which has a venerable ~52-year track record (July 15, 1970 inception, 13.09% annualized return compared to 10.91% for the S&P 500 index). The performance this year (through Q3 2022) is terrible: Negative 36.14% compared to Negative 23.87% for the S&P 500 index. After new management took over in Q1 2016, the portfolio has seen a significant shift to information & services businesses from asset-intensive manufacturing & retail. Also, the cash allocation which had averaged ~20% since inception is now close to zero. The following significant stakes in Sequoia’s portfolio are not in the 13F report as they are not 13F securities: Constellation Software (CNSWF), Eurofins Scientific SE (ERFSF), Rolls-Royce Holdings plc (RYCEY), SAP SE (SAP), and Universal Music Group (UMGNF). Bill Ruane was a Benjamin Graham pupil. To learn about Benjamin Graham's teachings, check out the classics  and .New Stakes:Capital One Financial (COF): COF is a 3.87% of the portfolio position established this quarter at prices between ~$91 and ~$116 and the stock currently trades below that range at $87.87.Stake Increases:Meta Platforms (META): The ~6% META position saw a whopping ~600% stake increase in Q1 2018 at prices between $152 and $193. The next two quarters had seen another ~27% increase at prices between $155 and $218. Q1 2019 saw an about turn: ~23% reduction at prices between $124 and $173. Q1 2021 saw a ~13% stake increase at prices between ~$246 and ~$299. This quarter also saw a ~11% stake increase. The stock currently trades below their purchase price ranges at ~$115.Stake Decreases:UnitedHealth (UNH): UNH is now the largest position at 9.90% of the portfolio. It was established in Q4 2019 at prices between $215 and $296 and increased by ~300% next quarter at prices between ~$195 and ~$305. Q3 2020 saw a ~30% stake increase at prices between ~$291 and ~$324. There was a ~25% selling last quarter at prices between ~$452 and ~$546. The stock currently trades at ~$524. This quarter saw a minor ~2% trimming.Charles Schwab (SCHW): SCHW is a large (top three) 9.31% portfolio stake purchased in Q2 2016 at a cost-basis of ~$29. Q1 2020 saw a ~40% stake increase at prices between $28.50 and $49. There was a ~17% selling next quarter at prices between $32.50 and $43. The stock is now at $78.26. Last nine quarters have seen only minor adjustments.Formula One Group (FWONA) (FWONK): Sequoia’s Q4 2016 letter disclosed a new stake in Liberty Media Formula One. They participated in Liberty’s acquisition of Formula One and acquired the shares at a discounted price of $25. There was a 24% stake increase in Q2 2017 at prices between $30.50 and $37. The six quarters thru Q3 2019 had seen a ~18% selling at prices between $28.50 and $43 and that was followed with similar selling next quarter at prices between $40 and $46. Last eleven quarters have seen only minor adjustments. FWONA is currently at $52.14. The stake is now a large (top three) position at 8.86% of the portfolio.Note: their ownership stake in Formula One Group is ~5%.Intercontinental Exchange (ICE): The large (top five) 8.62% ICE stake was purchased in Q3 2020 at prices between ~$92 and ~$107. There was a ~90% stake increase last quarter at prices between ~$90 and ~$133. The stock currently trades at ~$100. This quarter saw a minor ~2% trimming.Alphabet Inc. (GOOG) (GOOGL): GOOG is now at 8.47% of the portfolio. It was first purchased in 2008 and that original stake was almost sold out the following year. In 2010, a much larger position was built in the low-teens price-range. Recent activity follows: Q2 2019 saw a one-third reduction at prices between ~$52 and ~$64. That was followed with a ~60% reduction over the six quarters through Q4 2020 at prices between ~$53 and ~$107. Last quarter also saw a ~18% reduction at prices between ~$106 and ~$144. The stock currently trades at $89.15. This quarter saw another ~9% trimming.Micron Technology (MU) and Elevance Health (ELV) previously Anthem: MU is a 3.66% of the portfolio position built over the two quarters through Q3 2021 at prices between ~$74 and ~$96 and the stock currently trades well below that range at $51.72. This quarter saw a one-third reduction at prices between ~$49 and ~$65. The 6.67% ELV stake was established in H1 2021 at prices between ~$288 and ~$402 and it is now at ~$503. Last quarter saw a ~42% reduction at prices between ~$444 and ~$530. There was a minor ~3% trimming this quarter.CarMax Inc. (KMX): KMX is currently at 6.34% of the 13F portfolio. It was purchased in Q2 2016 at prices between $46 and $56 and increased by ~70% in Q4 2016 at prices between $48.50 and $66. Q4 2017 saw a ~30% selling at prices between $64 and $77 while next quarter there was a ~80% increase at prices between $59 and $72. The eleven quarters through Q4 2020 had seen a ~45% selling at prices between ~$44 and ~$109. The stock is now at ~$58. Last several quarters have also seen minor trimming.Credit Acceptance Corp. (CACC): CACC is a 5.35% stake established in Q1 2017 at prices between $185 and $221. There was a ~25% stake increase in Q4 2020 at prices between $288 and $356. Q3 2021 saw a ~18% selling at prices between ~$438 and ~$670. That was followed with a one-third reduction next quarter at prices between ~$582 and ~$696. The stock is now at ~$440. Last three quarters saw minor trimming.Note: They have a ~5.7% ownership stake in Credit Acceptance Corp.Taiwan Semi (TSM): The 4.74% of the portfolio TSM stake was purchased in Q4 2019 at prices between $46.50 and $59. There was a ~130% stake increase in Q2 2020 at around the same price range. Q1 2021 saw a ~12% selling while in Q3 2021 there was a ~20% stake increase. This quarter saw a ~30% selling at prices between ~$69 and ~$92. The stock currently trades at $76.10.Note: their investment thesis is based on the following: fabs are capital intensive (~$10B per facility) and the leader naturally has a strong moat thereby yielding big profit margins. Debatably, they produce the most important manufactured component in the modern economy. It is essentially a monopoly, and the main concern is geopolitical risks.Jacobs Solutions (J) previously Jacobs Engineering: J is a 4.48% long-term stake first purchased in 2012. Recent activity follows: Q2 2018 saw a ~20% increase at prices between $56.50 and $67 while the next six quarters saw minor trimming. There was a ~25% selling in Q1 2020 at prices between ~$63 and ~$104. That was followed with a similar reduction in Q2 2021 at prices between ~$129 and ~$143. The stock currently trades at ~$119. Last five quarters also saw minor trimming.Netflix Inc. (NFLX): NFLX is a 4.29% of the portfolio position purchased in Q4 2020 at prices between ~$471 and ~$554. There was a ~15% stake increase in Q2 2021 at prices between ~$485 and ~$555. That was followed with a ~85% stake increase in Q1 2022 at prices between ~$331 and ~$597. Last quarter also saw another ~45% stake increase at prices between ~$166 and ~$392. This quarter saw an about turn: ~40% selling at prices between ~$174 and ~$249. The stock currently trades at ~$288.Note: the Netflix investment thesis is based around the idea that as the global trend toward subscription-based streaming video consumption accelerates, the leaders will be more profitable than the leaders of the cable era.Liberty Broadband (LBRDK): LBRDK is a 3.59% of the portfolio position purchased in Q1 2018 at prices between $86 and $97 and increased by ~20% next quarter at prices between $69 and $85. Q1 2020 saw a ~18% reduction at prices between ~$91 and ~$139. There was a ~23% stake increase in Q1 2021 at prices between ~$143 and ~$157. The stock currently trades at $69.56. Last six quarters saw minor trimming.Wayfair Inc. (W): W is a 2.27% of the 13F portfolio stake purchased in Q3 2019 at prices between $106 and $152. Next quarter saw a ~40% stake increase at prices between $80 and $118. That was followed with another ~30% increase in Q1 2020 at prices between ~$24 and ~$110. The four quarters through Q1 2021 saw a ~75% reduction at prices between ~$47 and ~$346. Q3 2021 saw a ~80% stake increase at prices between ~$239 and ~$317. That was followed with a one-third increase next quarter at prices between ~$190 and ~$280. Last quarter saw another ~45% stake increase at prices between ~$44 and ~$117. The stock currently trades at $34.23. There was a minor ~5% trimming this quarter.Note: Wayfair has seen a previous roundtrip. It was a very small 0.76% of the portfolio position purchased in Q1 2019 at prices between $85 and $172 and disposed next quarter at prices between $138 and $164.Berkshire Hathaway (BRK.A) (BRK.B): Berkshire stake is now at 3.27% of the portfolio. It is a very long-term position that was the largest stake in their first 13F filing in 1999. Recent activity follows:  Q1 2018 saw a one-third selling at prices between ~$191 and ~$217. The nine quarters through Q1 2022 had seen the large stake sold down at prices between ~$169 and ~$359. Last quarter saw another one-third selling at prices between ~$268 and ~$353. The stock is now at ~$300. There was minor trimming this quarter.The spreadsheet below highlights changes to Ruane, Cunniff, & Goldfarb’s 13F stock holdings in Q3 2022:Source: John Vincent. Data constructed from Ruane, Cunniff, & Goldfarb's 13F filings for Q2 2022 and Q3 2022.Q2 2022 Portfolio Review video, Letter, Factsheet: Performance: Negative 29.30% vs negative 19.96% for the S&P 500 index in H1 2022. 13.09% vs 10.91% since 1970 inception. Increased:  Charles Schwab, Wayfair & Netflix minor increases. Trimmed: Alphabet. NEW: SAP. Commentary: Decreased Elevance Health & UnitedHealth while increasing Intercontinental Exchange.Note:  is an affiliated but separate business that invests in early stage. They also have a long-term structure whereby they hold public businesses as well once their portfolio companies do a successful IPO – DASH, U, etc. are examples. Related article from 6/2022 -Regulatory filings from 6/11/2022 to 9/3/2022: None."