ORCL - Tracking William Nygren's Harris Associates Portfolio - Q1 2023 Update

2023-06-27 07:15:46 ET

Summary

• Harris Associates' 13F portfolio value increased from $52.56B to $55.60B in Q1 2023, with the largest five stakes being Alphabet, Amazon.com, Fiserv, Oracle, and Charter Communications, which add up to around 21% of the portfolio.
• The firm currently has around $90B under management, with its flagship mutual funds being the Oakmark Fund and the Oakmark International Fund, which have produced substantial alpha during their lifetimes.
• In Q1 2023, Harris Associates increased its stakes in Alphabet, Amazon, KKR & Company, Oracle, Charter Communications, Capital One Financial, Intercontinental Exchange, CNH Industrial, Bank of America, and Wells Fargo, among others, while decreasing stakes in Fiserv, Salesforce, General Motors, HCA Healthcare, CBRE Group, Warner Bros. Discovery, TE Connectivity, Booking Holdings, and several smaller positions.

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 5/15/2023. William Nygren's 13F portfolio value increased from $52.56B to $55.60B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions. There are 59 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, Amazon.com, Fiserv, Oracle, and Charter Communications. 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 Q4 2022.

Harris Associates currently has ~$90B 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: 12.39% annualized return compared to 9.95% for the S&P 500 index for OAKMX and 8.69% annualized return for OAKIX compared to 5.81% 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 Mercedes-Benz Group (MBGAF), BNP Paribas ( OTCQX:BNPQF ), Intesa Sanpaolo ( OTCPK:ISNPY ), Lloyds Banking Group ( LYG ), BMW ( OTCPK:BMWYY ), Bayer ( OTCPK:BAYRY ), Continental ( OTCPK:CTTAF ), Allianz ( OTCPK:ALIZF ), and Prosus ( OTCPK:PROSY ).

Stake Increases:

Alphabet Inc. ( GOOG ) ( GOOGL ) : GOOG is currently the largest 13F position by far at 7.35% 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. The stock currently trades at ~$119. The last nine quarters have seen only minor adjustments.

Amazon.com ( AMZN ) : The top three 4.25% of the portfolio AMZN stake was built during the last five quarters at prices between ~$85 and ~$170. The stock currently trades at ~$127.

KKR & Company ( KKR ) and Oracle Corp. ( ORCL ): KKR is a 2.52% of the portfolio stake that saw a ~115% increase last quarter at prices between ~$43 and ~$57.50. The stock currently trades at ~$53. The 3.21% ORCL position saw a ~90% increase last quarter at prices between ~$61 and ~$84. The stock currently trades at ~$117. Both stakes were increased marginally this quarter.

Charter Communications ( CHTR ) : CHTR is a 2.77% 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. The two years through Q4 2020 had seen a ~58% selling at prices between ~$275 and ~$680. 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 stock currently trades at ~$337. There was a ~10% trimming last quarter while this quarter there was a similar increase.

Capital One Financial ( COF ) and Intercontinental Exchange ( ICE ): COF is a 2.65% of the portfolio stake built during the last three quarters at prices between ~$88 and ~$122 and it is now at ~$106. The 2.31% ICE stake saw a whopping 170% increase last quarter at prices between ~$90 and ~$110. The stock currently trades at ~$110. This quarter also saw a ~30% increase at prices between ~$95 and ~$109.

CNH Industrial ( CNHI ): CNHI is a 2.61% of the portfolio position purchased in Q4 2020 at prices between $7.75 and $13 and the stock currently trades at ~$14. The five quarters through Q1 2022 saw a ~55% selling at prices between ~$11 and ~$17. The last several quarters have seen only minor adjustments.

Note: They control ~7% of the business.

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. The next 3 years saw a ~40% reduction at prices between ~$12 and ~$33. 2019-2021 timeframe saw another ~40% selling at prices between ~$20 and ~$48. Q3 2022 saw a ~15% selling and that was followed with marginal trimming last quarter. There was a ~20% increase this quarter at prices between ~$27 and ~$37. The stock is now at ~$28, and the stake is at 2.60% of the portfolio.

Wells Fargo ( WFC ): The 1.53% WFC stake saw a ~45% increase during Q3 2022 at prices between ~$39 and ~$46. It now goes for $40.59. The last two quarters saw only minor adjustments.

APA Corporation ( APA ), Adobe ( ADBE ), American Express ( AXP ), Altria Group ( MO ), Bank of New York Mellon ( BK ), Charles Schwab ( SCHW ), Comcast Corp. ( CMCSA ), ConocoPhillips ( COP ), EOG Resources ( EOG ), Equifax ( EFX ), First Citizens BancShares ( FCNCA ), Liberty Broadband ( LBRDK ), Lithia Motors ( LAD ), Masco Corp. ( MAS ), and Moody's Corp. ( MCO ): These small (less than 1.5% of the portfolio each) positions were increased this quarter.

Stake Decreases:

Fiserv, Inc. ( FI ) : FI is a large (top three) 3.53% of the portfolio position primarily built during 2021 at prices between ~$96 and ~$111. The last four quarters saw a ~30% selling at prices between ~$89 and ~$122. The stock currently trades at ~$120.

Salesforce.com ( CRM ): CRM is a 2.20% stake that saw a roughly two-thirds increase last quarter at prices between ~$128 and ~$191. It is now at ~$207. There was a minor ~5% trimming this quarter.

General Motors ( GM ) : GM is a 2.53% 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 last four quarters have seen only minor adjustments. The stock currently trades at $36.70.

HCA Healthcare ( HCA ) : HCA is now at 2.34% of the portfolio stake. A large position 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. There was a one-third increase in Q2 2020 at prices between $82 and $118. That was followed with a ~15% stake increase next quarter at prices between ~$94 and ~$138. The last nine quarters saw a ~28% selling at prices between ~$122 and ~$267. That was followed with a similar reduction this quarter at prices between ~$243 and ~$264. The stock currently trades at ~$295.

CBRE Group ( CBRE ): The 1.76% CBRE stake saw a ~20% increase during H1 2022 at prices between ~$70 and ~$109. The stock currently trades at $75.56. The last two quarters also saw a similar increase at prices between ~$67.50 and ~$88. There was a minor ~2% trimming this quarter.

Warner Bros. Discovery ( WBD ): WBD is a 1.64% of the portfolio position purchased during Q3 2022 at prices between ~$11.30 and ~$17.50 and the stock currently trades at $11.78. Last quarter also saw a ~10% stake increase. There was marginal trimming this quarter.

TE Connectivity ( TEL ): TEL is a very long-term stake first purchased in 2011 in the high-20s price range. Recent activity follows. There was a 16% reduction in Q2 2020 at prices between ~$59 and ~$92. That was followed with a ~55% reduction over the nine quarters through Q3 2022 at prices between ~$79 and ~$165. The last quarter saw a ~13% stake increase while this quarter saw a ~18% reduction. The stock currently trades at ~$134 and the stake is at 1.62% of the portfolio.

Booking Holdings (BKNG) : BKNG is now a 1.21% of the portfolio position. It was a minutely small stake first purchased in 2016 and was increased substantially next year at prices between $1465 and $2035. H1 2019 saw the stake almost double at prices between $1665 and $1880. H2 2019 saw minor trimming. There was a ~25% stake increase in Q1 2020 at prices between ~$1152 and ~$2087. The four quarters through Q2 2021 had seen a ~20% trimming. That was followed with another ~23% selling in the last three quarters at prices between ~$1635 and ~$2372. This quarter saw another ~50% reduction at prices between ~$2032 and ~$2652. The stock is currently at ~$2616.

American International Group ( AIG ), Ally Financial ( ALLY ), Berkshire Hathaway ( BRK.B ), BorgWarner ( BWA ), BlackRock, Inc. ( BLK ), Citigroup Inc. ( C ), Goldman Sachs ( GS ), Hilton Worldwide ( HLT ), Interpublic Group ( IPG ), Liberty Global ( LBTYK ), Mastercard Inc. ( MA ), Meta Platforms ( META ) previously Facebook, Netflix, Inc. ( NFLX ), NOV Inc. ( NOV ), Open Text Corp. ( OTEX ), Parker-Hannifin ( PH ), Pinterest ( PINS ), PulteGroup ( PHM ), Ryanair Holdings ( RYAAY ), Reinsurance Group of America ( RGA ), State Street Corp. ( STT ), Tenet Healthcare ( THC ), Visa Inc. ( V ), Vipshop Holdings ( VIPS ), Workday Inc. ( WDAY ), and Willis Towers Watson (WTW): These small (less than ~2% 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, Grupo Televisa, Lear Corp, 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 Q1 2023:

For further details see: