BNPQY - Tracking William Nygren's Harris Associates Portfolio - Q3 2022 Update

Summary

• Harris Associates’ 13F portfolio value decreased from $62.85B to $59.68B this quarter.
• They added Warner Bros. Discovery and increased Salesforce, KKR, and Oracle while decreasing Keurig Dr Pepper and Humana.
• The top three positions are Alphabet, Fiserv, and Amazon.com, and they add up to ~12% of the portfolio.

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 11/14/2022. William Nygren’s 13F portfolio value decreased from $62.85B to $59.68B this quarter. The portfolio is diversified with recent 13F reports showing around 200 positions. There are 55 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, Fiserv, Amazon.com, HCA Healthcare, and General Motors. They add up to ~16% 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 2022.

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: 11.94% annualized return compared to 9.60% for the S&P 500 index for OAKMX and 7.63% annualized return for OAKIX compared to 5.11% annualized 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 Intesa Sanpaolo ( ISNPY ), BNP Paribas ( BNPQF ), Lloyds Banking Group ( LYG ), Mercedes-Benz Group (MBGAF), Allianz ( ALIZF ), BMW ( BMWYY ), Prosus ( PROSY ), Exor ( EXXRF ), Worldline ( WRDLY ), and Bayer ( BAYRY ).

New Stakes:

Warner Bros. Discovery ( WBD ): WBD is a ~1% of the portfolio position purchased this quarter at prices between ~$11.30 and ~$17.50 and the stock currently trades well below that range at $8.87.

Stake Increases:

Amazon.com ( AMZN ) : The top three 2.56% of the portfolio AMZN stake was primarily built during the last two quarters at prices between ~$102 and ~$170. The stock currently trades well below that range at ~$82. There was a marginal further increase this quarter.

Charter Communications ( CHTR ) : CHTR is a 2.20% 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 ~$332. There was a minor ~4% further increase this quarter.

CNH Industrial ( CNHI ): CNHI is a 1.87% of the portfolio position purchased in Q4 2020 at prices between $7.75 and $13 and the stock currently trades at ~$16. The five quarters through Q1 2022 saw a ~55% selling at prices between ~$11 and ~$17. Last two quarters have seen minor increases.

Note: They control ~7.4% of the business.

KKR & Company ( KKR ), Oracle Corp ( ORCL ), Salesforce Inc. ( CRM ), and Wells Fargo ( WFC ): These four positions saw large increases this quarter. KKR is a 1.52% of the portfolio stake that saw a ~70% increase this quarter at prices between ~$43 and ~$58. The stock currently trades at $45.20. The 1.49% ORCL position saw a ~45% increase this quarter at prices between ~$61 and ~$80. The stock currently trades at ~$80. CRM is a 1.58% stake that saw a roughly one-third increase this quarter at prices between ~$144 and ~$191. It is now at ~$128. The 1.43% WFC stake saw a ~45% increase this quarter at prices between ~$39 and ~$46. It now goes for $41.12.

Ally Financial ( ALLY ) : ALLY is a 1.25% of the portfolio position first purchased in 2015 at prices between $18.50 and $24. Next year saw the position more than doubled at prices between $15.50 and $20.50. The ten quarters through Q2 2021 had seen a ~40% selling at prices between ~$12 and ~$55. The stock is now at $23.52. Last five quarters have seen minor increases.

Note: They have a ~7.5% ownership stake in Ally Financial.

Meta Platforms ( META ) previously Facebook: META is a 1.25% of the portfolio position. The stake saw a ~42% increase in Q1 2020 at prices between ~$146 and ~$223. That was followed with a ~35% stake increase last quarter at prices between ~$156 and ~$223. The stock currently trades at ~$116. There was a minor ~3% increase this quarter.

CBRE Group ( CBRE ), Capital One Financial ( COF ), Global Payments ( GPN ), Goldman Sachs ( GS ), Intercontinental Exchange ( ICE ), Koninklijke Philips NV ( PHG ), Open Text Corp ( OTEX ), Parker-Hannifin ( PH ), Ryanair Holdings ( RYAAY ), State Street Corp ( STT ), Willis Towers Watson (WTW), and Workday Inc. ( WDAY ): These small (less than 1.5% of the portfolio each) positions were increased this quarter.

Stake Decreases:

Alphabet Inc. ( GOOG ) ( GOOGL ) : GOOG is currently the largest 13F position by far at 5.85% 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 had seen a ~28% selling at prices between ~$53 and ~$91. The stock currently trades at $86.46. Last seven quarters have seen only minor adjustments.

Fiserv Inc. ( FISV ) : FISV is a large (top three) 3.34% of the portfolio position primarily built last year at prices between ~$96 and ~$111. There was a minor ~4% trimming last quarter and a ~8% trimming this quarter. The stock currently trades at ~$100.

HCA Healthcare ( HCA ) : HCA is now a 2.32% 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 four quarters through Q3 2021 had seen a ~14% selling at prices between ~$124 and ~$262. The stock currently trades at ~$236. Last four quarters have seen only minor adjustments.

General Motors ( GM ) : GM is a 2.23% of the portfolio position. It is a very long-term stake. The original position was minutely 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 $32.53. Last quarter saw a ~6% further increase while this quarter saw similar trimming.

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. Q1 2022 saw a ~17% reduction while last quarter there was a similar increase. This quarter saw a ~15% selling. The stock is now at $32.77, and the stake is at 2.12% of the portfolio.

American International Group ( AIG ) : AIG is a 1.79% of the portfolio position first purchased in 2012 at prices between ~$23 and ~$36. The stake was almost doubled over the next two years at prices between $35 and $56.50. 2016 saw a one-third selling at prices between $50 and $66. 2017-2018 timeframe saw a similar increase at prices between $37.50 and $67. The three quarters through Q3 2019 had seen a ~20% reduction at prices between $40 and $57.50. The stock is now at $62.89. Last several quarters have seen further selling.

Citigroup Inc. ( C ) : The 1.61% Citigroup position was built in 2014 at prices between ~$46 and ~$56. The stake was almost doubled over the next three years at prices between ~$37.50 and ~$76. Since 2018, there had been a combined ~30% selling at prices between ~$35 and ~$82. This quarter also saw a ~12% trimming. The stock currently trades at $44.62.

Netflix Inc. ( NFLX ): The 1.49% NFLX stake was built over the last two quarters at prices between ~$166 and ~$392. The stock currently trades at ~$277. There was a minor ~5% trimming this quarter.

Booking Holdings ( BKNG ) : BKNG is now a 1.48% 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 doubled at prices between $1665 and $1880. H2 2019 had seen 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. The stock is currently at ~$1959. This quarter saw a ~13% trimming.

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 last nine quarters at prices between ~$79 and ~$165. The stock currently trades at ~$112 and the stake is at 1.38% of the portfolio.

APA Corporation ( APA ), Berkshire Hathaway ( BRK.B ), BlackRock Inc. ( BLK ), BorgWarner ( BWA ), Comcast Corp ( CMCSA ), Charles Schwab ( SCHW ), ConocoPhillips ( COP ), EOG Resources ( EOG ), General Electric ( GE ), Grupo Televisa ( TV ), Hilton Worldwide ( HLT ), Humana Inc. ( HUM ), Interpublic Group ( IPG ), Keurig Dr. Pepper ( KDP ), Lear Corp ( LEA ), Liberty Global ( LBTYK ), Mastercard Inc. ( MA ), Pinterest ( PINS ), Regeneron Pharmaceuticals ( REGN ), Reinsurance Group of America ( RGA ), Visa Inc. ( V ), and Vipshop Holdings ( VIPS ): 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, Grupo Televisa, Lear Corp, Liberty Global, and Reinsurance Group of America.

Kept Steady:

Liberty Broadband ( LBRDK ): The very small 0.35% of the portfolio stake in LBRDK was kept steady this quarter.

Below is a spreadsheet that shows the changes to William Nygren’s Harris Associates 13F portfolio holdings as of Q3 2022:

For further details see: