Value Guru Sees Stocks Fairly Priced, Bullish on Berkshire (TBGVX, TWEBX, JNJ, PM, HD, WMT, COP, DVN, UNP, KOF, SKM, BRK-A, BRK-B)
For value investors, the stock market plunge made for plenty of buying opportunities, but after the market’s huge rebound, one value-focused Pro believes stocks are “pretty fairly valued today.” The same Pro was vocally bullish on Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B).
Venerable mutual fund firm Tweedy Browne reiterated in a letter to investors last month that “lower quality” stocks led the rebound in 2009, outperforming “steadier, higher quality businesses, particularly those that pay a dividend.” As a result, Tweedy Browne believes the latter class of stocks is trading at “very reasonable multiples.”
Tweedy Browne reopened its flagship Tweedy Browne Global Value Fund (TBGVX) to new investors in 2008, and the firm also runs the smaller Tweedy Browne Value Fund (TWEBX). Both funds are slightly above breakeven for 2010. The firm’s newly disclosed end-of-Q1 holdings are now available on tickerspy.com.
Looking at Tweedy’s top-15, U.S.-listed, equity holdings across all its funds, one can see that the firm was upping its stake in Berkshire. When Berkshire bought Tweedy holding Burlington Northern, Tweedy chose to take proceeds from the sale in Berkshire stock rather than cash, stating that Berkshire’s value was reasonable at the time. The stock has since moved higher.
The firm also added to stakes in healthcare giant Johnson & Johnson (JNJ) and tobacco company Philip Morris Intl (PM), while trimming stakes in in home improvement retailer Home Depot (HD), discount retailer Wal-Mart Stores (WMT), big energy firms ConocoPhillips (COP) and Devon Energy (DVN), and railroad Union Pacific (UNP).
Tweedy’s Global Value Fund holds a number of international equities as well as U.S.-listed ADRs. The U.S.-listed international firms figuring most prominently among Tweedy’s holdings at the end of Q1 were Mexican bottler Coca-Cola Femsa SAB (KOF) and South Korean wireless firm SK Telecom Co (SKM).
Looking at tickerspy.com’s graph charting the performance of Tweedy’s end-of-Q1 holdings so far in Q2, one can see that the holdings have kept pace with the volatile market. If you want to see how your performance stacks up to Tweedy’s or take a look at some of the other stocks it’s invested in, visit tickerspy.com to see the firm’s top holdings and a chart of their combined performance.
Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.
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