Bill Nygren (Trades, Portfolio) disclosed the Oakmark Fund’s first-quarter equity portfolio last month.
To achieve long-term capital appreciation, the renowned guru, who also manages the Chicago-based firm’s Select and Global Select funds, usually invests in mid- and large-cap companies. When picking stocks, he looks for growing companies that have shareholder-oriented management teams. According to the fund’s fact sheet, he prefers to take a position when the stock is trading at a substantial discount to his estimate of intrinsic value, then waits for the gap between the two to close before selling.
Keeping these considerations in mind, the NPORT-P filing shows Nygren established two new positions during the three months ended March 31, sold out of three stocks and added to or trimmed a slew of other existing investments. Notable trades included new holdings in The Kroger Co. (KR, Financial) and Truist Financial Corp. (TFC, Financial), an increase in the ConocoPhillips (COP, Financial) stake and the divestment of Etsy Inc. (ETSY, Financial) and Gartner Inc. (IT, Financial).
Investors should be aware that, just like with 13F reports, NPORT-P reports do not provide a complete picture of a guru’s holdings to the public. Filed by certain mutual funds after each quarter’s end, they collect a wide variety of information on the fund for the SEC’s reference, but in general, the only information made public is in regard to long equity positions. Unlike 13Fs, they do require some disclosure for long equity positions in foreign stocks. Despite their limitations, even these limited filings can provide valuable information.
Kroger
The guru invested in 3.30 million shares of Kroger (KR, Financial), allocating 1.10% of the equity portfolio to the stake. The stock traded for an average price of $45.71 per share during the quarter.
The Cincinnati-based operator of a supermarket chain has a $33.15 billion market cap; its shares were trading around $46.19 on Monday with a price-earnings ratio of 15.05, a price-book ratio of 3.29 and a price-sales ratio of 0.23.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 93 out of 100, the GF Score indicates the company has high outperformance potential. While it received high ratings for profitability, growth and momentum, the financial strength and value ranks are more moderate.
Of the gurus invested in Kroger, Warren Buffett (Trades, Portfolio) has the largest stake with 6.97% of its outstanding shares. Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also have notable positions.
Truist Financial
The investor picked up 4.60 million shares of Truist Financial (TFC, Financial), dedicating 1.06% of the equity portfolio to the stake. Shares traded for an average price of $43.65 each during the quarter.
The bank holding company headquartered in Charlotte, North Carolina has a market cap of $43.17 billion; its shares were trading around $32.41 on Monday with a price-earnings ratio of 7.22, a price-book ratio of 0.77 and a price-sales ratio of 1.82.
According to the GF Value Line, the stock is significantly undervalued currently.
The GF Score of 62 implies the company has poor performance potential on the back of a high value rank, middling marks for profitability and low growth, financial strength and momentum ratings.
With a 1.53% stake, Dodge & Cox is the company’s largest guru shareholder. Diamond Hill Capital (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), Simons’ firm, Charles Brandes (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Louis Moore Bacon (Trades, Portfolio) and several other gurus also own the stock.
ConocoPhillips
Nygren boosted the ConocoPhillips (COP, Financial) stake by 63.45%, buying 1.10 million shares. The transaction impacted the equity portfolio by 0.74%. During the quarter, the stock traded for an average per-share price of $109.42.
The guru now holds 2.83 million shares, which occupy 1.90% of the equity portfolio. GuruFocus estimates he has gained 64.76% on the investment so far.
The Houston-based energy company has a $123.91 billion market cap; its shares were trading around $102.40 on Monday with a price-earnings ratio of 8.19, a price-book ratio of 2.59 and a price-sales ratio of 1.71.
Based on the GF Value Line, the stock appears to be modestly undervalued currently.
Receiving solid ratings for four of the criteria and a more moderate momentum rank, the company has good outperformance potential with a GF Score of 88.
Dodge & Cox is ConocoPhillips largest guru shareholder with a 1.16% stake. Other top guru investors include Ken Fisher (Trades, Portfolio), Diamond Hill, the Smead Value Fund (Trades, Portfolio) and Yacktman Asset Management (Trades, Portfolio).
Etsy
The guru exited his 1.05 million-share position in Etsy (ETSY, Financial), which had an impact of -0.91% on the equity portfolio. The stock traded for an average price of $124.01 per share during the quarter.
GuruFocus data shows Nygren gained around 17.59% on the short-lived investment.
The e-commerce company headquartered in New York, which specializes in handmade items, vintage wares and craft supplies, has a market cap of $10.85 billion; its shares were trading around $87.98 on Monday with a price-sales ratio of 4.51.
The GF Value Line suggests the stock is significantly undervalued currently.
Further, the GF Score of 82 means the company has good outperformance potential, driven by high profitability, growth and momentum ratings as well as more moderate financial strength and value ranks.
Holding 0.04% of its outstanding shares, Joel Greenblatt (Trades, Portfolio) is Etsy’s largest guru shareholder. John Hussman (Trades, Portfolio), Simons’ firm, Dalio’s firm and Jefferies Group (Trades, Portfolio) also own the stock.
Gartner
Nygren closed his 325,000-share Gartner (IT, Financial) holding, which impacted the equity portfolio by -0.79%. During the quarter, shares traded for an average price of $330.57 each.
GuruFocus found he gained about 128.92% on the investment over its lifetime.
The Stamford, Connecticut-based tech company, which provides research and analysis on information technology and other related industries, has a $27.66 billion market cap; its shares were trading around $349.90 on Monday with a price-earnings ratio of 30.19, a price-book ratio of 58.81 and a price-sales ratio of 5.
According to the GF Value Line, the stock is fairly valued currently.
Supported by high ratings for profitability, momentum and growth, the GF Score of 91 means the company has high outperformance potential. The financial strength and value ranks, however, were more moderate.
Ron Baron (Trades, Portfolio) is the company’s largest guru shareholder with a 6.07% stake. Gartner is also being held by Al Gore (Trades, Portfolio)’s Generation Investment, Wallace Weitz (Trades, Portfolio), Simons’ firm, Cohen, Greenblatt, Tom Gayner (Trades, Portfolio) and Caxton Associates (Trades, Portfolio).
Additional trades and portfolio performance
During the quarter, Nygren also sold out of Cummins Inc. (CMI, Financial), added to the Moody’s Corp. (MCO, Financial) and Bank of America Corp. (BAC, Financial) investments and cut back the Netflix Inc. (NFLX, Financial) and HCA Healthcare Inc. (HCA, Financial) holdings.
The Oakmark Fund’s $14.81 billion equity portfolio, which is composed of 57 stocks, is most heavily invested in the financial services sector.
The fund returned -13.40% in 2022, outperforming the S&P 500’s -18.11% return.
