CBRE - Tracking William Nygren's Harris Associates Portfolio - Q3 2023 Update

2023-12-25 19:06:09 ET

Summary

• William Nygren's 13F portfolio value decreased from $56.60B to $51.39B in Q3 2023.
• The portfolio is diversified with around 200 positions, with the largest five stakes being Alphabet, Charter Communications, Capital One Financial, Intercontinental Exchange, and Fiserv.
• Harris Associates' flagship mutual funds, Oakmark Fund and Oakmark International, have produced substantial alpha compared to their respective benchmarks.

This article is part of 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 13F Form filed on 11/14/2023. William Nygren’s 13F portfolio value decreased from $56.60B to $51.39B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions. There are 61 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, Charter Communications, Capital One Financial, Intercontinental Exchange, and Fiserv. They add up to ~21% of the portfolio. Please visit our Tracking William Nygren’s Harris Associates Portfolio series to get an idea of their investment philosophy and our last update for the fund’s moves during Q2 2023.

Harris Associates currently has ~$100B under management. Their flagship 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: 12.40% annualized return compared to 9.96% for the S&P 500 index for OAKMX and 8.40% annualized return for OAKIX compared to 5.67% annualized return 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 Lloyds Banking Group (LYG), BNP Paribas (BNPQF), Mercedes-Benz Group (DDAIF), Intesa Sanpaolo (ISNPY), Bayer (BAYRY), Fresenius (FSNUY), Continental (CTTAF), Kering (PPRUF), and Prudential (PUK).

New Stakes:

Cisco Systems (CSCO): The 1.14% of the portfolio stake in CSCO was established this quarter at prices between ~$50 and ~$57. The stock currently trades near the bottom of that range at $50.09.

Stake Increases:

Capital One Financial ( COF ) : COF is a large (top three) 3.67% of the portfolio stake built during the last four quarters at prices between ~$85 and ~$122 and it is now above that range at ~$130. There was a minor ~2% further increase this quarter.

Intercontinental Exchange ( ICE ) : COF is a large (top five) 3.32% of the portfolio stake built during the last four quarters at prices between ~$85 and ~$122 and it is now at ~$126. This quarter saw a ~7% further increase.

IQVIA Holdings ( IQV ) : The ~3% IQV stake was built this quarter at prices between ~$197 and ~$232. The stock is now at ~$229.

CNH Industrial ( CNHI ) : CNHI is a 2.92% of the portfolio position purchased in Q4 2020 at prices between $7.75 and $13. The five quarters through Q1 2022 saw a ~55% selling at prices between ~$11 and ~$17. There was a ~20% stake increase last quarter at prices between ~$12.80 and ~$14.60. This quarter also saw a ~9% further increase. The stock currently trades at $11.98.

Note: They control ~8% of the business.

American International Group ( AIG ) : The 2.70% AIG position saw a ~45% stake increase last quarter at prices between ~$50 and ~$57. The stock currently trades well above that range at $66.93. There was a minor ~2% increase this quarter.

CBRE Group ( CBRE ) : The 2.20% CBRE stake saw a ~20% increase during H1 2022 at prices between ~$70 and ~$109. H2 2022 also saw a similar increase at prices between ~$67.50 and ~$88. The stock currently trades at $91.95. The last two quarters saw minor increases.

Willis Towers Watson ( WTW ) : The 1.71% WTW stake saw a ~20% increase this quarter at prices between ~$196 and ~$234. The stock is now at ~$240.

Warner Bros. Discovery ( WBD ) : WBD is a 1.57% of the portfolio position purchased during Q3 2022 at prices between ~$11.30 and ~$17.50 and the stock currently trades just below that range at $11.27. Q4 2022 also saw a ~10% stake increase. There was marginal trimming during Q1 2023 and a ~7% increase last quarter. This quarter also saw a ~16% increase at prices between $10.66 and $14.47.

Ally Financial (ALLY), Altria Group (MO), American Express (AXP), Bank of New York Mellon (BK), Citigroup Inc. (C), Corebridge Financial (CRBG), Danaher Corp (DHR), Goldman Sachs (GS), Global Payments (GPN), Interpublic Group (IPG), Kroger Co. (KR), Liberty Broadband (LBRDK), Open Text Corp (OTEX), and Truist Financial (TFC): These small (less than ~1.5% of the portfolio each) stakes were increased during the quarter.

Stake Decreases:

Alphabet Inc. ( GOOG ) : GOOG is currently the largest 13F position by far at 6.48% of the portfolio. The bulk of the stake was purchased in 2014 at prices between ~$26 and ~$30. Next year also saw a ~20% stake increase at prices between ~$25 and ~$38. The two years through Q4 2020 saw a ~28% selling at prices between ~$53 and ~$91. That was followed by a ~26% selling last quarter at prices between ~$104 and ~$128. This quarter also saw a ~12% reduction at prices between ~$117 and ~$139. The stock currently trades at ~$143.

Charter Communications (CHTR) : CHTR is a large (top three) 4.48% of the portfolio stake. It was established in 2015 when around 2M shares were purchased at prices between ~$150 and ~$190. Recent activity follows. There was a ~20% stake increase in H1 2021 at prices between ~$597 and ~$722. That was followed with a ~30% increase in Q1 2022 at prices between ~$545 and ~$648. The last quarter also saw a ~25% increase at prices between ~$320 and ~$367. The stock currently trades at ~$382. There was a minor ~3% trimming this quarter.

Fiserv Inc. ( FI ) : FI is a large (top five) 3.29% of the portfolio position primarily built during 2021 at prices between ~$96 and ~$111. The last five quarters saw a ~40% selling at prices between ~$89 and ~$126. The stock currently trades at ~$134. This quarter also saw a minor ~3% trimming.

KKR & Company (KKR) : KKR is a 3.23% of the portfolio stake that saw a ~115% increase during Q4 2022 at prices between ~$43 and ~$57.50. The stock currently trades at $81.92. The last quarter saw a ~9% stake increase while this quarter there was a similar trimming.

ConocoPhillips (COP) : COP is a 3.15% of the portfolio stake primarily built during the last two quarters at prices between ~$94 and ~$125. The stake was decreased by 10% this quarter at prices between ~$99 and ~$123. The stock currently trades at ~$118.

Bank of America (BAC) : 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. Recent activity follows. Q3 2022 saw a ~15% selling and that was followed with marginal trimming next quarter. There was a ~20% increase during Q1 2023 at prices between ~$27 and ~$37. The stock is now at $33.43, and the stake is at 2.79% of the portfolio. The last quarter saw a ~6% increase while this quarter there was a minor ~2% trimming.

Amazon.com ( AMZN ) : The 2.61% of the portfolio AMZN stake was built during the five quarters through Q1 2023 at prices between ~$85 and ~$170. There was a one-third selling last quarter at prices between ~$98 and ~$130. This quarter saw another one-third reduction at prices between ~$126 and ~$145. The stock currently trades at ~$153.

General Motors ( GM ) : GM is a 2.28% of the portfolio position. It is a very long-term stake. The original position was 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 was sold down by ~25% in the 2016-2019 timeframe at prices between $28 and $46. That was followed with a ~45% reduction in the five quarters through Q2 2021 at prices between ~$18 and ~$64. There was a ~25% stake increase in Q1 2022 at prices between ~$40 and ~$66. The stock currently trades at $36.02. There was an ~8% trimming this quarter.

Charles Schwab (SCHW) : The ~2% SCHW stake was built during H1 2023 at prices between ~$47 and ~$86. The stock is now at $68.58. There was marginal trimming this quarter.

EOG Resources ( EOG ) : The ~2% EOG position saw a ~45% increase in the last two quarters at prices between ~$101 and ~$136. The stock currently trades at ~$122. There was an ~8% trimming this quarter.

Wells Fargo (WFC) : The 1.90% WFC stake saw a ~45% increase during Q3 2022 at prices between ~$39 and ~$46. It now goes for $49.18. The last quarter saw a ~6% increase while this quarter saw marginal trimming.

Salesforce.com (CRM) : CRM is a 1.85% stake that saw a roughly two-thirds increase during Q4 2022 at prices between ~$128 and ~$191. There was a ~35% selling last quarter at prices between ~$189 and ~$223. It is now at ~$266. This quarter also saw a ~7% trimming.

Oracle Corp (ORCL) : The 1.73% ORCL position saw a ~90% increase during Q4 2022 at prices between ~$61 and ~$84. There was a ~37% selling last quarter at prices between ~$93 and ~$127. That was followed by another ~30% reduction this quarter at prices between ~$104 and ~$126. The stock currently trades at ~$106.

APA Corporation (APA), BorgWarner (BWA), BlackRock Inc. (BLK), Carlisle Companies (CSL), Comcast Corp (CMCSA), Equifax (EFX), First Citizens BancShares (FCNCA), Fortune Brands (FBIN), Hilton Worldwide (HLT), HCA Healthcare (HCA), Liberty Global (LBTYK), Lithia Motors (LAD), Masco Corp (MAS), Moody’s Corp (MCO), Meta Platforms (META), Parker-Hannifin (PH), Pinterest (PINS), PulteGroup (PHM), Reinsurance Group of America (RGA), Ryanair Holdings (RYAAY), State Street Corp (STT), TE Connectivity (TEL), THOR Industries (THO), Visa Inc. (V), and Workday, Inc. (WDAY): These small (less than ~1.5% of the portfolio each) stakes were reduced during the quarter.

Note: Although the position sizes relative to the total portfolio value are very small, they have significant ownership stakes in APA Corporation, Liberty Global, and Reinsurance Group of America.

Below is a spreadsheet that shows the changes to William Nygren’s Harris Associates 13F portfolio holdings as of Q3 2023:

Source: John Vincent. Data constructed from Harris Associates' 13F filings for Q2 2023 and Q3 2023.

For further details see: