This article is part of a series that provides an ongoing analysis of the changes made to David Winters’ 13F stock portfolio on a quarterly basis. It is based on Winters’ regulatory 13F Form filed on 08/14/2018. Please visit our Tracking David Winters’ Wintergreen Advisers Portfolio series to get an idea of his investment philosophy and our previous update for the fund’s moves during Q1 2018.
This quarter, Winters’ 13F portfolio value decreased ~6% from $142M to $134M. The number of holdings remained steady at 6. The top three positions represent ~92% of the 13F assets, making it a heavily concentrated portfolio.
The mutual fund (WGRNX) (WGRIX) has a global orientation: ~37% US, ~23% cash & short-term investments, and the rest outside US. Switzerland and United Kingdom together account for around one-third of the overall portfolio. AUM is ~$250M. Performance wise, the fund was down 3.37% YTD through July 2018 compared to up 2.36% for the MSCI World Index. The three largest investments are Consolidated-Tomoka Land (NYSEMKT:CTO), British American Tobacco plc (NYSEMKT:BTI), and Elbit Systems (NASDAQ:ESLT), and they together account for ~50% of the overall portfolio. Elbit Systems, Nestle SA (OTCPK:NSRGY), Compagnie Financiere Richemont SA (OTCPK:CFRUY), Heineken Holding NV (OTCQX:HKHHF), Swatch Group (OTCPK:SWGAY), and Birchcliff Energy (OTCPK:BIREF) are the positions in the top 10 not listed in the 13F report.
Note: Wintergreen Fund’s tobacco allocation is large at ~22%.
New Stakes:
None.
Stake Disposals:
None.
Stake Decreases:
Altria Group (MO): MO was first purchased in Q1 2012 at prices between $28 and $31. In Q1 2013, the original position was reduced by ~25% at prices between $31 and $35.50. The five quarters through Q4 2015 had seen a combined ~55% stake reduction at prices between $45 and $62. 2016 saw another ~55% selling at prices between $57 and $68. There was a one-third further reduction in Q1 2017 at prices between $67.50 and $76.50. Last quarter saw another ~28% selling at prices between $59 and $72. The stock currently trades at $58.52 and the remaining stake is at ~12% (second-largest) of the 13F portfolio. This quarter saw a ~3% trimming.
British American Tobacco: The ADR stake listed in the 13F report came about as a result of the merger with Reynolds American. RAI shareholders received 0.526 BTI shares along with $29.44 cash for each share held. The original BTI position was consistent with this ratio: they had ~1.87M shares of RAI for which they received ~985K shares. Q4 2017 saw the position reduced by ~75% at prices between $61 and $68 and that was followed with a ~22% selling this quarter at prices between $48 and $60. The stock is now at $48.38. As a percentage of the 13F portfolio, the stake is at ~7%.
Note: In the Wintergreen mutual fund, British American Tobacco is the second-largest holding at ~16% of the AUM. Most of that is through the London listed shares and so is not in the 13F report.
Kept Steady:
Consolidated-Tomoka Land Company: CTO is a very long-term stake. It was the largest 13F position at over 24% in 2006. The stake was increased by over 60% in 2007 as well. Since then, the position has been kept relatively steady. Wintergreen owns over 1.55M shares, which translates to an ownership of 28% of the business. As a percentage of the 13F portfolio, the position is the largest stake at ~71%. The stock currently trades at $62.78.
Note: Wintergreen had two unsuccessful proxy contests over the last couple of years. In November last year, they made a shareholder proposal urging the board to take immediate steps to narrow the NAV discount – hire an independent adviser to evaluate all options for the Company, including a sale or liquidation of assets.
Union Pacific (UNP): UNP is a ~9% of the 13F portfolio stake established in Q2 2013 at prices between $67.50 and $80. Q3 2014 saw a ~50% stake increase at prices between $97 and $110. There was a ~30% reduction in Q4 2015 at prices between $75 and $97 and that was followed with another ~25% selling in the following quarter at prices between $68.50 and $84.50. The stock currently trades at $151. Q4 2017 saw a ~14% trimming and that was followed with a ~37% reduction last quarter at prices between $124 and $142.
Liberty Media Formula One (FWONA) and Liberty Global LiLAC (LILA): These are minutely small (less than ~0.35% of the 13F portfolio) stakes established in Q1 2017 and kept steady this quarter.
The spreadsheet below highlights changes to Wintergreen’s US stock holdings in Q2 2018:
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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.
Be the first to comment