"Tracking William Nygren’s Harris Associates Portfolio – Q4 2019 Update"
"Harris Associates 13F portfolio increased from $51.5B to $56.4B this quarter.They increased Liberty Global, Open Text, and DXC Technology while decreasing Apple, Halliburton, National Oilwell Varco, and Diageo during the quarter.The top three positions are Alphabet, Bank of America, and Citigroup and they add up to ~16% of the portfolio.This article is first in a series that provides an ongoing analysis of the changes made to Harris Associates 13F stock portfolio on a quarterly basis. It is based on Harris Associates’ regulatory  filed on 02/14/2020. William Nygren’s 13F portfolio value increased ~10% from $51.53B to $56.41B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions although most of them are very small. There are 62 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 Alphabet, Bank of America, Citigroup, Charter Communications, and General Motors. They add up to ~16% of the portfolio.Harris Associates was founded in 1976. Their roots go back to 1957 when Irving Harris became a partner at R.J Levy and Company. In 1975, Irving Harris left the firm to found William Harris Investors as a Family Office to focus on managing the family assets. The remaining partners founded Harris Associates. William Nygren joined the firm in 1983 as an Equity Analyst and is now the Chief Investment Officer.Harris Associates currently has ~$120B under management. They are long-only equity investors and they invest globally. The strategy is offered thru several mutual funds under the Oakmark umbrella and other vehicles. Their flag ship mutual funds are the Oakmark Fund (OAKMX) incepted in 1991 and the Oakmark International (OAKIX) incepted in 1992. Both funds have produced substantial alpha during their lifetimes – 12.5% annualized return compared to 10% for the S&P 500 index for OAKMX and 9.4% annualized return for OAKIX compared to 6.07% annualized for the MSCI World ex-US Index. The other mutual funds in the group are Oakmark Select (OAKLX), Oakmark Equity and Income (OAKBX), Oakmark Global (OAKGX), Oakmark Global Select (OAKWX), and Oakmark International Small Cap (OAKEX).Note: The top holdings in the Oakmark International Fund are not in the 13F report as they are not 13F securities. The positions are Glencore (GLCNF), BNP Paribas (BNPQF), Intesa Sanpaolo (ISNPY), Continental (CTTAF), Credit Suisse Group (CS), Daimler (DDAIF), CNH Industrial (CNHI), BMW (BMWYY), Lloyds Banking Group (LYB), and Bayer (BAYRY).New Stakes:None.Stake Disposals:None.Stake Increases:General Motors (GM): GM is a top-five position at 3.77% of the portfolio. It is a very long-term stake. The original position was minutely small in 2007 and it was disposed the following year. In 2013, a huge ~70M share stake was established at prices between $27 and $41. The position size peaked at ~81M shares in 2015. The stake has been sold down since: last four years saw a ~28% selling at prices between $28 and $46. The stock currently trades at $21.Regeneron Pharmaceuticals (REGN): REGN is a 2.91% of the portfolio position. The bulk of the stake was built in H1 2018 at prices between $320 and $385. Q2 2019 saw a ~45% increase at prices between $300 and $415. That was followed with minor increases over the last two quarters. The stock is now at ~$441.Hilton Worldwide (HLT): The 2.74% of the portfolio HLT stake was built during the four quarters thru Q1 2019 at prices between $66.50 and $85.75. The stock currently trades at $69.54. Last three quarters have seen only minor adjustments.American International Group (AIG): AIG is a 2.68% of the portfolio position first purchased in 2012 at prices between ~$23 and ~$36. The stake was almost doubled over the next two years at prices between $35 and $56.50. 2016 saw a one-third selling at prices between $50 and $66. 2017-2018 timeframe saw a similar increase at prices between $37.50 and $67. Last three quarters had seen a ~20% reduction at prices between $40 and $57.50 while this quarter saw a marginal increase. The stock is now at $23.25.Booking Holdings (BKNG): BKNG is now a medium-sized 2.43% of the portfolio position. It was a minutely small stake first purchased in 2016. It was increased substantially next year at prices between $1465 and $2035. H1 2019 saw the stake almost doubled at prices between $1665 and $1880. Last two quarters have seen minor trimming. The stock is currently at ~$1290.Liberty Global (LBTYK): LBTYK is a medium size 2.30% position established in 2017 at prices between $28 and $37. 2018 also saw a ~15% stake increase at prices between ~$20 and ~$37. Last two quarters had seen a ~30% selling at prices between $24 and $27.50 while this quarter saw a similar increase at prices between $20.50 and $25. It is now at $14.75.Note: Oakmark has a ~20% ownership stake in Liberty Global.Comcast Corp (CMCSA): CMCSA is a very long-term 1.66% of the portfolio stake that has been in the portfolio for well over 15 years. The first significant buying happened in 2004 when around 10M shares were purchased in the $6 to $8 price-range. The interim period saw some selling but in 2011 there was a 4x stake increase at prices between ~$10 and ~$13. The next five years saw a ~80% reduction at prices between ~$12 and ~$35. 2017-2018 timeframe saw the stake rebuilt at prices between $31 and $43. Last three quarters had seen minor selling while this quarter saw a marginal increase. The stock is now at ~$36.HCA Healthcare (HCA): HCA is now a ~1.5% of the portfolio stake. A large stake was built over the 2016-2017 timeframe at prices between $64 and $89. Q4 2018 saw that original stake reduced by ~50% at prices between ~$120 and ~$144. Next quarter also saw a ~15% stake reduction. Since then, the activity has been minor. The stock currently trades at $84.45.Moody’s Corp (MCO): MCO is a ~1.5% of the portfolio stake established in 2017 at prices between $94 and $152. The stock currently trades at ~$185. The position size has remained steady since although adjustments have been made in most quarters.Baidu Inc. (BIDU): BIDU is a ~1.5% of the portfolio position first purchased in 2015 at prices between ~$134 and ~$233. Next year saw a substantial stake increase at prices between ~$125 and ~$194. 2017-2018 timeframe saw that original stake sold down by ~50% at prices between ~$165 and ~$280. It was built back up over the last four quarters at prices between ~$97 and ~$182. The stock currently trades at ~$90.Grupo televisa (TV), Constellation Brands (STZ), Cenovus Energy (CVE), and Facebook Inc. (FB): These are small positions (less than ~1.5% of the portfolio each) that saw minor increases during the quarter.Note: Oakmark has a ~11% ownership stake in Grupo Televisa.Caterpillar Inc. (CAT), Apache Corp (APA), Concho Resources (CXO), Southwest Airlines (LUV), Philip Morris (PM), Open Text Corp (OTEX), and DXC Technology (DXC): These are very small (less than ~1% of the portfolio each) stakes that were increased during the quarter.Note: Oakmark has a ~5.5% ownership stake in Apache Corp.Stake Decreases:Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F position at 6.37% of the portfolio. The bulk of the position was purchased in 2014 at prices between ~$515 and ~$595. Next year also saw a ~20% stake increase at prices between ~$495 and ~$750. Last four quarters have seen a ~8% trimming. The stock currently trades at ~$1084.Bank of America (BAC) and Citigroup Inc. (C): BAC and C are the second and third largest stakes in the portfolio. BAC was a minutely small position in their first 13F filing in 1999. It became a significant part of the portfolio in 2011. The 2012 to 2015 timeframe saw the stake built from 9.8M shares to 138M shares at prices between ~$6 and $18. The next 3 years saw a ~40% reduction at prices between ~$12 and ~$33. Since then, the position has stayed steady although adjustments were made every quarter. The stock is now at $20.44 and it is the second largest position at 5.11% of the portfolio. The 4.72% C position was built in 2014 at prices between ~$46 and ~$56. The stake was almost doubled over the next three years at prices between ~$37.50 and ~$76. Last two years have seen a combined ~18% selling at prices between ~$50 and ~$80. The stock currently trades at $41.19.Charter Communications (CHTR): CHTR is a top five ~4% of the portfolio stake. It was established in 2015 when around 2M shares were purchased at prices between ~$150 and ~$190. 2017 saw a stake doubling at prices between ~$298 and ~$395. 2018 also saw a ~55% stake increase at prices between ~$260 and ~$390. Last four quarters have seen a ~25% selling at prices between ~$290 and ~$490. The stock currently trades at ~$389.TE Connectivity (TEL): TE is a 3.39% of the portfolio position established in 2011 at prices between ~$28 and ~$39. The position was increased from ~23M shares to ~30M shares over the next three years at prices between $30 and $65. The stake has been sold down since. Last four quarters have seen a ~20% reduction at prices between $74 and $97. The stock is now at ~$61.Ryanair Holdings (RYAAY): RYAAY is a 2.83% of the portfolio stake established in 2018 at prices between ~$69 and ~$125. Q2 2019 also saw a ~20% stake increase at prices between ~$62 and ~$83. There was a ~10% trimming this quarter. The stock currently trades well below those ranges at $53.24.Note: Oakmark has a ~8% ownership stake in Ryanair Holdings.MasterCard Inc. (MA): The 2.24% of the portfolio stake in MA was established in 2011 at prices between $23 and $37. The 2015-2019 timeframe has seen the stake reduced from over 25M shares to 4.23M shares at prices between ~$84 and ~$300. The stock currently trades at ~$236. They are harvesting gains.Ally Financial (ALLY): ALLY is a 1.87% of the portfolio position first purchased in 2015 at prices between $18.50 and $24. Next year saw the position more than doubled at prices between $15.50 and $20.50. Since then, the stake has been kept relatively steady although adjustments were made every quarter. Last four quarters have seen a ~12% selling at prices between $23 and $35. It is now at ~$16.Note: Oakmark has a ~9% ownership stake in Ally Financial.Netflix Inc. (NFLX): NFLX is a 1.77% of the portfolio stake purchased in 2017 at prices between ~$131 and ~$200. Next year also saw a ~50% stake increase at prices between ~$210 and ~$410. Last four quarters have seen only minor adjustments. The stock is now at ~$299.Capital One Financial (COF), CVS Health Group (CVS), Charles Schwab (SCHW), CBRE Group (CBRE), Fiat Chrysler (FCAU), General Electric (GE), MGM Resorts (MGM), Oracle Corp (ORCL), State Street Corp (STT), and Wells Fargo (WFC): These small (less than ~1.5% of the portfolio each) stakes saw reductions during the quarter.Lear Corp (LEA), Arconic Inc. (ARNC), Apple Inc. (AAPL), American Airlines (AAL), Visa Inc. (V), Intel Corp (INTC), Parker Hannifin (PH), Halliburton (HAL), Bank of New York Mellon (BK), Cummins (CMI), Diamondback Energy (FANG), Goldman Sachs (GS), Texas Instruments (TXN), Liberty Broadband (LBRDK), Interpublic Group (IPG), Gartner Inc. (IT), National Oilwell Varco (NOV), Johnson Controls (JCI), Diageo plc (DEO), Automatic Data Processing (ADP), Qurate Retail Group (QRTEA), and Willis Towers Watson (WLTW): These very small (less than ~1% of the portfolio each) positions were reduced during the quarter.Note: Oakmark controls ~6% of Qurate Retail Group, ~3% of National Oilwell Varco, and ~6.5% of Lear Corp.Kept Steady:None.Note: Although the stakes as percentage of the 13F portfolio are very small, Oakmark has significant ownership stakes in the following businesses: 5.8% of CoreLogic (CLGX), 6% of Tenet Healtchare (THC), 6.4% of Volaris - Controladora Vuela Compañía de Aviación (VLRS), 5.6% of LivaNova plc (LIVN), and 6.5% of WPP plc (WPP).Below is a spreadsheet that shows the changes to William Nygren’s Harris Associates 13F portfolio holdings as of Q4 2019:"