Monthly Roundup: May
Time for another installment of my Monthly Roundup where I discuss my portfolio, market news, and anything else I feel like writing about. This month I get into:
Latest stock buys
Major news from company’s in my portfolio
Super Investors portfolio changes
Remembering Sam Zell
Portfolio News and Changes
During the month I sold all Advanced Emissions Solutions (ADES) shares for a 51% loss. I purchased ADES when its stock price was around its net current asset value, which seemed like an attractive valuation. The company had a lot of cash sitting on its books. After my purchase, the company raised a good amount of debt, issued stock, and acquired a company. Then in their latest earnings release they mentioned they were going to spend the rest of their cash hoard on capex. The market must not have liked all these drastic changes, and neither did I so I cut my losses.
The other stock I sold was EMCORE (EMKR) for a 26% loss. This was another stock that was trading below net current asset value. EMKR has been struggling with its RF devices business segment that seemed to supply the cable TV industry. The company’s other business unit seems to be growing, but the company wound down its RF device business. That is unfortunate, but I can live with it. My problem with EMKR is that they issued stock, increasing their shares outstanding by around 30%. Buying a basket of company’s below net current asset value typically works out. However if the company materially changes its net current assets per share, then it is time to move on.
The main news worthy article for a portfolio company concerns Capital One. The New York City banking commission voted to freeze deposits from Capital One and a few other banks due to failing to submit plans to show how the banks plan on eliminating discrimination. Capital One has $7.2M in city deposits. Obviously I would not want COF to discriminate, but this issue sounds more like failing to do some paper pushing for the city. It will be interesting if COF publicly announces how they will navigate the situation.
Also speaking of Capital One, either Buffett or Ted/Todd bought some of the company’s stock this quarter.
Super Investors
Each quarter, large investors have to disclose their holdings in 13F filings with the SEC. I like tracking the portfolio moves from some of my favorite value investors using dataroma. Here are some of the big portfolio changes during the first quarter:
Note: The percentage in parentheses is the change to the portfolio
Warren Buffet - Berkshire Hathaway:
Reduce 18.8% Chevron (CVX) (3.4%)
Add 2.3% Apple (AAPL) (1%)
Sold 100% Bank of New York Mellon (BK) (0.4%)
Add 8.9% Occidental Petroleum (OXY) 0.3%)
Reduce 6.2% Activision Blizzard (ATVI) (0.09%)
Seth Klarman - Baupost Group:
Sold 100% Meta Platforms (META) (3.5%)
Add 46.5% Alphabet (GOOG) (3.5%)
Reduce 73.3% Fiserv (FISV) (3%)
Sold 100% Micron (MU) (2.8%)
Add 124.6% Fidelity National Information Services (FIS) (2.6%)
Bill Nygren - Oakmark Select Fund:
Sold 100% Citigroup (C) (4.5%)
Sold 100% Netflix (NFLX) (4.2%)
Bought Charles Schwab (SCHW) (3%)
Li Lu - Himalaya Capital Management:
Reduced 40.5% Micron (MU) (13.4%)
Bought East West Bancorp (EWBC) (6.3%)
Add 23.9% Bank of America (BAC) (4.9%)
Sam Zell
A few weeks ago we lost one of the great real estate investors, Sam Zell. While I did not follow Zell super closely, I did admire him from the couple podcast interviews I’ve heard of him, as well as reading his great autobiography “Am I Being Too Subtle?”. In his book, he tells the harrowing journey of his Jewish parents fleeing Poland during the Nazi invasion, basically sneaking their way through Europe with no passport, ending up in Japan, and eventually making it to the United States. Sam seemed like a casual guy, a non-conformist in the world of Suits in big business. I enjoyed reading about his early days, building his own property management company, developing student housing, then doing real estate syndication deals in less competitive smaller markets. If I ever build a real estate empire, Sam Zell would be my model.