The Harbor Capital Appreciation Fund disclosed in a portfolio update that its top trades during the fourth quarter of 2022 included the trimming of its positions in Apple Inc. (AAPL, Financial) and Amazon.com Inc. (AMZN, Financial) and new holdings of Netflix Inc. (NFLX, Financial), Northrop Grumman (NOC, Financial) and T-Mobile US Inc. (TMUS, Financial).
The fund, which is co-founded by the late Spiros Segalas (Trades, Portfolio), seeks long-term capital appreciation through investments in companies that have unique business models and high economies of scale. The fund also looks for growth catalysts such us disruptive technologies and new product cycles.
As of October 2022, the fund’s $21.45 billion equity portfolio contains 53 stocks, with five new positions and a quarterly turnover ratio of 5%. The top three sectors in terms of weight are technology, consumer cyclical and health care, accounting for 31.89%, 28.32% and 13.38% of the equity portfolio.
Investors should be aware that portfolio updates for mutual funds do not necessarily provide a complete picture of a guru’s holdings. The data is sourced from the quarterly updates on the website of the fund(s) in question. This usually consists of long equity positions in U.S. and foreign stocks. All numbers are as of the quarter’s end only; it is possible the guru may have already made changes to the positions after the quarter ended. However, even this limited data can provide valuable information.
Apple
The fund sold 1,717,092 shares of Apple (AAPL, Financial), trimming 14.3% of the position and 1.14% of its equity portfolio.
Shares of Apple averaged $155.33 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.73 as of Wednesday.
The Cupertino, California-based tech giant has a GF Score of 98 out of 100, driven by a rank of 10 out of 10 for profitability and growth, a GF Value rank of 9 out of 10, a momentum rank of 8 out of 10 and a financial strength rank of 6 out of 10.
Apple’s profitability ranks 10 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased by approximately 2.7% per year on average over the past five years and outperforms approximately 97% of global competitors.
Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) owns 894,802,319 shares of Apple as of the third-quarter 2022 13F equity portfolio filing, giving the position 41.76% equity portfolio weight.
Other gurus with holdings in Apple include Ken Fisher (Trades, Portfolio)’s Fisher Investments and Jeremy Grantham (Trades, Portfolio)’s GMO.
Amazon.com
The fund sold 1,307,987 shares of Amazon.com (AMZN, Financial), slicing 9.72% of the stake and 0.72% of its equity portfolio.
Shares of Amazon.com averaged $125.42 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.44 as of Wednesday.
The Seattle-based e-commerce giant has a GF Score of 89 out of 100, driven by a growth rank of 10 out of 10, a profitability rank of 9 out of 10 and a financial strength rank of 6 out of 10 despite momentum and GF Value ranking just 4 out of 10.
Amazon’s profitability ranks 9 out of 10 on the back of a five-star business predictability rank.
Netflix
The fund invested in 759,421 shares of Netflix (NFLX, Financial), giving the holding 1.03% equity portfolio weight.
Shares of Netflix averaged $240.24 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF Value ratio of 0.49.
The Los Gatos, California-based streaming giant has a GF Score of 92 out of 100, driven by a growth rank of 10 out of 10 and a rank of 9 out of 10 for profitability and momentum despite financial strength ranking just 6 out of 10 and GF Value ranking just 4 out of 10.
Netflix’s profitability ranks 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased by more than 30% per year on average over the past five years and is outperforming over 80% of global competitors.
Northrop Grumman
The fund purchased 319,257 shares of Northrop Grumman (NOC, Financial), giving the position 0.82% equity portfolio weight. Shares averaged $490.47 during the fourth quarter; the stock is significantly overvalued based on its price-to-GF Value ratio of 1.36.
The Falls Church, Virginia-based defense contract company has a GF Score of 79 out of 100 based on a growth rank of 10 out of 10, a profitability rank of 9 out of 10, a financial strength rank of 6 out of 10, a momentum rank of 3 out of 10 and a GF Value rank of 1 out of 10.
Northrop Grumman’s profitability ranks 9 out of 10 on the back of a 3.5-star business predictability rank and a return on equity that outperforms more than 90% of global competitors.
T-Mobile US
The fund invested in 1,017,394 shares of T-Mobile US (TMUS, Financial), giving the position 0.72% equity portfolio weight. Shares averaged $141.11 during the fourth quarter; the stock is fairly valued based on its price-to-GF Value ratio of 1.06.
The Bellevue, Washington-based telecom company has a GF Score of 75 out of 100 based on a growth rank of 8 out of 10, a profitability rank of 7 out of 10, a financial strength rank of 4 out of 10 and a rank of 3 out of 10 for momentum and GF Value.
