Ruane, Cunniff and Goldfarb’s Portfolio Tracking – Q3 2023 Update (MUTF:SEQUX)

This article is part of a series providing ongoing analysis of changes made to Ruane, Cunniff & Goldfarb’s 13F portfolio each quarter. This is based on a Regulatory 13F form filed on November 14, 2023. please visit Our Tracking Portfolio of Ruane, Cunniff & Goldfarb Articles about their investment philosophy and our ideas Previous update About movements during the second quarter of 2023

This quarter, the value of Ruane, Cunniff and Goldfarb’s 13F portfolio decreased ~5%, from $6.34 billion to $6.02 billion. The number of shares increased from 34 to 36. Fifteen of those holdings are fairly large (each more than ~0.5% of the portfolio) and are the focus of this article. The top three positions are approximately 30% of 13F assets (Alphabet, Intercontinental Exchange, UnitedHealth, Elevance Health, and Liberty Media) and the top five positions are approximately 47%.

that much The company has Sequoia Fund No Load (MUTF: Next) has a storied track record of ~53 years (starting July 15, 1970, annual returns of 13.05% compared to 11.07% for the S&P 500 Index). Performance in 2022 was terrible. It was minus 30.52% compared to minus 18.11% for the S&P 500 index. In the first half of 2023, it again performed poorly compared to the S&P 500 index at 12.91% and 16.89%. Since new management took over in the first quarter of 2016, the portfolio has shifted significantly from asset-intensive manufacturing and retail to information and services businesses. Additionally, cash distribution, which has averaged about 20% since founding, is currently less than 5%. The following significant holdings in Sequoia’s portfolio are not included in the 13F report because they are not 13F securities: Constellation Software Inc. (OTCPK:CNSWF), Eurofins Scientific SE (OTCPK:ERFSF), Lumine Group Co., Ltd.OTCPK:LMGIF), Rolls-Royce Holdings PLC (OTCPK:RYCEY), SAP SE (sap), Universal Music Group NV (OTCPK:UMGNF). Bill Ruane was a student of Benjamin Graham. To learn about Benjamin Graham’s teachings, check out the classic The Intelligent Investor and Security Analysis.

Increase your stake:

Elevance Health, Inc. (rule): 8.31% ELV stake is set for prices between ~$288 and ~$402 in the first half of 2021. Q2 2022 saw a ~42% price reduction between ~$444 and ~$530. This was followed by ~16% sales during the fourth quarter of 2022 at prices between ~$454 and ~$547. Last quarter, the stake increased by ~30% at prices ranging from ~$436 to ~$496. It’s also up about 10% this quarter. The current stock price is ~$459.

formula one group (FWONK) (LLYVK) (LLYVA): Sequoia’s Q4 2016 letter reveals new stake in Liberty Media Formula One. They participated in Liberty’s Formula One takeover, acquiring shares at a discounted price of $25. The stakes were shaken. The current price of FWONK is $64.69. The current stake is 8.13% of the portfolio. There was a small trimming of ~2% last quarter and a small increase this quarter.

Stake reduction:

Alphabet Inc. (GOOG) (GOOGL): GOOG is currently the largest 13F position at 10.71% of the portfolio. First purchased in 2008, the original shares were almost sold out the following year. In 2010, a much larger position was built in the low teens price range. Recent activities include: In the second quarter of 2019, prices were reduced by a third, ranging from ~$52 to ~$64. It then declined ~60% over six quarters through Q4 2020, with prices ranging from ~$53 to ~$107. Over the past six quarters, prices have decreased by ~40%, ranging from ~$83 to ~$139. The stock is currently trading at ~$140.

InterContinental Exchange, Inc. (ice): ICE is currently the second largest 13F position at 10.51% of the portfolio. Purchased in Q3 2020 for prices ranging from ~$92 to ~$107. In Q2 2022, the stake increased by ~90% at prices ranging from ~$90 to ~$133. The stock is currently trading at ~$122. Over the past five quarters, there has been a trimming of about 13%.

UnitedHealth Group Consolidation (UNH): UNH is a large (top 3) company, accounting for 9.17% of portfolio shares. It was founded in Q4 2019 with prices between ~$215 and ~$296 and increased by ~300% in the following quarter with prices between ~$195 and ~$305. In Q3 2020, the stake increased by ~30% at prices ranging from ~$291 to ~$324. Q2 2022 saw ~25% sales at prices between ~$452 and ~$546. It was then reduced by ~15% in Q4 2022, with prices ranging from ~$499 to ~$555. The stock is currently trading at ~$516. There was only a minor adjustment in the last third quarter.

Charles Schwab Corporation (Black color): SCHW is currently at ~8% of the portfolio. I first purchased it in Q2 2016 for ~$29. In the first quarter of 2020, shares increased by up to 40% at prices between $28.50 and $49. The following quarter saw sales of about 17% at prices between $32.50 and $43. The current stock price is $67.12. Last quarter, the stake increased by about 9%, while this quarter, the stake decreased by about 3%.

Carmax Co., Ltd. (KMX): KMX currently accounts for 6.53% of the 13F portfolio. In the second quarter of 2016, it was priced between $46 and $56, and in the fourth quarter of 2016, it was priced between $48.50 and $66, an increase of about 70%. In the fourth quarter of 2017, there was about a 30% increase in sales at prices between $64 and $77, and the next quarter saw an increase of about 80% at prices between $59 and $72. In the 11 quarters through Q4 2020, ~45% of sales occurred at prices between ~$44 and ~$109. The current stock price is $74.68. Trimming has also been seen in the past few quarters.

Jacobs Solutions Co., Ltd. (Jay): J is a 6.49% long-term stake first purchased in 2012. Recent activities include: The second quarter of 2018 saw prices rise by up to 20% between $56.50 and $67, while the next six quarters saw minor corrections. Q1 2020 saw ~25% sales at prices between ~$63 and ~$104. Similar cuts were then made in the second quarter of 2021, with prices ranging from ~$129 to ~$143. The stock is currently trading at ~$126. Last quarter it was up about 12%, while this quarter it’s down about 3%.

Taiwan Semiconductor Manufacturing Company Limited (TSM): Portfolio About 6% of TSM shares were purchased in the fourth quarter of 2019 at prices between $46.50 and $59. Q2 2020 saw a ~130% stake increase at roughly the same price point. While the first quarter of 2021 saw a sell-off of approximately 12%, the stake increased by approximately 20% in the third quarter of 2021. Q3 2022 saw ~30% of sales at prices between ~$69 and ~$92. The stock is currently trading at ~$100. There has been some trimming in the last few quarters.

Liberty Broadband Corporation (LBDK): LBRDK was ~6% of the portfolio position purchased in the first quarter of 2018 at prices between $86 and $97, and increased by ~20% in the following quarter at prices between $69 and $85. In Q1 2020, there was a ~18% price reduction between ~$91 and ~$139. In Q1 2021, the stake increased by ~23% at prices between ~$143 and ~$157. Last quarter, prices between ~$71 and ~$85 increased by another third. The stock is currently trading at $77.39. There was some trimming this quarter.

Credit Reception Corporation (CACC): CACC is a 5.84% stake founded in the first quarter of 2017 at prices ranging from $185 to $221. The fourth quarter of 2020 saw a stake increase of approximately 25% at prices ranging from $288 to $356. Q3 2021 saw sales of ~18% at prices between ~$438 and ~$670. Then the next quarter it was cut by a third, with prices ranging from ~$582 to ~$696. The current stock price is ~$510. There have been only minor adjustments in the last few quarters.

Note: They hold a ~5.8% ownership stake in Credit Acceptance Corp.

Capital One Financial Co., Ltd. (COF): COF is 5.32% of the portfolio position set for prices between ~$91 and ~$116 in Q3 2022, with the stock currently trading at ~$128. Last quarter, the stake increased by ~25% at prices ranging from ~$86 to ~$114. There was a small trimming of ~3% this quarter.

Metaplatforms (META): The 4.45% META position saw a whopping ~600% stake increase in Q1 2018 at prices ranging from $152 to $193. In the next two quarters, prices between $155 and $218 rose another 27%. The first quarter of 2019 saw a reversal: prices were reduced by about 23% between $124 and $173. In Q1 2021, the stake increased by ~13% at prices ranging from ~$246 to ~$299. The stake also increased by about 11% in the third quarter of 2022. Over the past two quarters, ~70% of sales have occurred at prices between ~$125 and ~$289. The stock is currently trading at ~$349. There was a trimming of about 3% this quarter.

Berkshire Hathaway Inc. (BRK.B) (BRK.A): Berkshire’s stake currently amounts to about 4% of the portfolio. It is a very long-term position, having been the largest holding in our first 13F filing in 1999. Recent activities include: In the first quarter of 2018, one-third were sold at prices ranging from ~$191 to ~$217. Over the course of nine quarters through Q1 2022, large stakes were sold at prices ranging from ~$169 to ~$359. The next quarter saw another third sold, priced between ~$268 and ~$353. The current stock price is ~$355. There was some trimming in the last five quarters as well.

The spreadsheet below highlights changes to Ruane, Cunniff and Goldfarb’s 13F stock holdings in the third quarter of 2023.

Source: John Vincent. Data constructed from Ruane, Cunniff and Goldfarb’s 13F filings for Q2 2023 and Q3 2023.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.