thitimon toyai
This text is a part of a sequence that gives an ongoing evaluation of the modifications made to Akre Capital Administration’s 13F portfolio on a quarterly foundation. It’s primarily based on Akre’s regulatory 13F Kind filed on 5/12/2023. Please go to our Monitoring Akre Capital Administration Portfolio sequence to get an concept of their funding philosophy and our final replace for his or her strikes in This autumn 2022.
This quarter, Akre’s 13F portfolio worth elevated ~3% from $11.06B to $11.37B. The variety of positions decreased from 20 to 19. The most important 5 stakes are Mastercard (MA), Moody’s (MCO), American Tower (AMT), Visa (V), and O’Reilly Auto (ORLY). They account for two-thirds of the full portfolio worth.
AUM is distributed amongst personal funds, individually managed accounts, and the Akre Focus Mutual Fund (MUTF:AKREX) (MUTF:AKRIX). Because the 2009 inception by way of Q1 2023, the mutual fund’s annualized returns are at 14.14% in comparison with 13.01% for the S&P 500 Index. For Q1 2023, the fund returned 5.85% in comparison with 7.50% for the S&P 500 Index. Their money allocation has elevated from ~2% to ~5.4% since EOY 2021. Akre coined the time period “compounding machines” to explain the kind of companies he invests in. To be taught extra about that investing model, take a look at 100 to 1 within the Inventory Market.
Notice: positions within the mutual fund not reported by way of the 13F filings embody Constellation Software program (OTCPK:CNSWF), and Topicus.com (OTCPK:TOITF). Topicus.com is a derivative from Constellation Software program that began buying and selling in February 2021.
Stake Disposals:
Alarm.com Holdings (ALRM): ALRM was a really small 0.12% place first bought in Q2 2015. Q3 2019 noticed a ~130% stake enhance at costs between $46 and $53. The 4 quarters by way of Q3 2020 noticed a ~43% additional enhance at costs between ~$37 and ~$71. There was a ~50% discount in Q1 2022 whereas within the subsequent quarter there was a ~73% enhance. The disposal this quarter was at costs between ~$48 and ~$58. The inventory presently trades at $51.50.
Stake Will increase:
Mastercard (MA): MA is presently the biggest 13F stake at ~19% of the portfolio. It was first bought in 2010 and has persistently elevated since. Their general cost-basis is ~$22 in comparison with the present worth of ~$385 per share. Q1 2020 noticed a ~9% stake enhance whereas Q2 2022 noticed a ~14% promoting at costs between ~$309 and ~$379. The final two quarters noticed solely minor changes.
American Tower (AMT): AMT has been within the portfolio for over twenty years. It’s the second-largest stake at ~13% of the portfolio. Current exercise follows: the six years by way of Q3 2018 noticed constant shopping for virtually each quarter. The share depend elevated over 4 occasions from 1.7M shares to 7.1M shares throughout that interval. The shopping for occurred at costs between $65 and $118. Since then, there have solely been minor changes. The inventory is now at ~$194. There was a marginal enhance over the past two quarters.
Notice: Akre could be very bullish on AMT as incremental margins are at over 90% and progress in wi-fi communication is a major tailwind.
KKR & Firm (KKR): KKR is a ~7% of the portfolio place established in Q1 2018 at costs between $20 and $24.50 and doubled subsequent quarter at costs between $19.50 and $25.50. There was one other ~25% enhance in This autumn 2018 at costs between $18.50 and $28. The primary three quarters of 2020 additionally noticed a ~15% enhance. The inventory presently trades at $51.19. The final a number of quarters noticed solely minor changes.
Notice: KKR transformed from a partnership to a company efficient July 1, 2018.
Brookfield Corp. (BN) beforehand Brookfield Asset Administration: BN is a 5.22% of the portfolio stake established in Q3 2019 at costs between $20 and $24 and elevated by ~18% subsequent quarter at costs between $22 and $27. The primary three quarters of 2020 noticed one other ~45% enhance at costs between $10 and $33.50. That was adopted with one other ~30% stake enhance final quarter at costs between ~$31 and ~$35. The inventory presently trades at $31.30. There was a minor ~5% enhance this quarter.
Notice: the costs quoted above are adjusted for the Asset Administration Enterprise spinoff accomplished final December. Shares of the spinoff, which assumed the title Brookfield Asset Administration have been distributed at a ratio of 1 share of the separated enterprise for each 4 Class A shares held. The mum or dad firm was then renamed Brookfield Corp.
DigitalBridge (DBRG) beforehand Colony Capital: The DBRG stake noticed a ~6x enhance in Q3 2020 at costs between ~$7.20 and ~$11.60. Q2 2022 noticed a ~55% stake enhance at costs between ~$18.20 and ~$30.20. That was adopted with a ~22% enhance within the final two quarters at costs between ~$11.50 and ~$23.50. The inventory presently trades at $11.29. The stake remains to be very small at 0.54% of the portfolio. There was a minor ~3% additional enhance this quarter.
Notice: The costs quoted above are adjusted for the one-for-four reverse stock-split final August.
Stake Decreases:
O’Reilly Automotive (ORLY): ORLY is a big (high 5) ~9% portfolio stake first bought in 2005. Over 800K shares have been bought on the time. The place was at 825K shares as of Q1 2017 – yearly had seen changes however general, the stake had remained remarkably regular over that twelve-year interval – the inventory returned ~10x throughout that point. 2017 noticed a ~130% stake enhance at a median value of ~$195. Q1 2021 noticed a ~14% promoting at costs between ~$425 and ~$509. There was a ~20% promoting final quarter at costs between ~$703 and ~$865. The inventory is now at ~$928. This quarter noticed marginal trimming.
Adobe Inc. (ADBE): ADBE is a ~4% of the portfolio place bought in Q1 2020 at costs between $285 and $383 and elevated by roughly one-third in Q1 2021 at costs between ~$421 and ~$502. There was a ~25% discount final quarter at costs between ~$275 and ~$346. The inventory presently trades at ~$372. There was a minor ~3% trimming this quarter.
CarMax Inc. (KMX): The 1.75% KMX stake is a really long-term place first bought in 2002. The majority of the present stake was constructed over the 4 quarters by way of Q2 2016 at costs between $42 and $68. There was a ~10% stake enhance in This autumn 2018 at costs between $57 and $74. 2019 had additionally seen a ~17% stake enhance at costs between $58 and $98 and that was adopted with a ~20% additional enhance in Q1 2020 at costs between $44 and $102. The 2 quarters by way of Q1 2021 had seen a ~12% promoting. That was adopted with a ~60% discount within the final two quarters at costs between ~$56 and ~$79. The inventory is now at $72.21.
Greenback Tree (DLTR): DLTR place was first bought in 2010 at a cost-basis within the low-20s. Current exercise follows. There was a ~15% stake enhance in Q2 2017 at costs between $66.50 and $83. Q1 2020 noticed a ~10% promoting and that was adopted with marginal trimming within the subsequent three quarters. Q1 2021 noticed a ~20% discount at costs between ~$98 and ~$116. That was adopted with a ~25% promoting in This autumn 2021 at costs between ~$96 and ~$147. The place was virtually bought out subsequent quarter at costs between ~$126 and ~$160. The inventory presently trades at ~$160. The final a number of quarters noticed minor trimming.
Stored Regular:
Moody’s Company (MCO): The preliminary buy of MCO occurred in Q1 & Q2 2012 within the high-30s price-range. Since then, the place measurement was doubled at increased costs. Current exercise follows: This autumn 2016 noticed a ~15% enhance at costs between $94 and $109 and that was adopted with a ~22% enhance the next quarter at costs between $95 and $114. Since then, the exercise has been minor. It presently trades at ~$321 and is now the second-largest stake at 15.36% of the portfolio.
Notice: Akre’s cost-basis on MCO is ~$39.
Visa Inc. (V): Visa is a big (high 5) ~10% of the portfolio stake. It was established in Q2 2012 at a cost-basis of round $30. Q2 2013 noticed a one-third enhance within the low-40s and that was adopted with a 60% enhance in Q2 2016 within the excessive 70s. Q1 2017 additionally noticed one other roughly one-third enhance at costs between $79.50 and $90. Since then, the exercise has been minor. The inventory is now at ~$231. There was a ~6% trimming final quarter.
Notice: Visa inventory break up 4-for-1 in March 2015. The costs quoted above are adjusted for that break up.
Roper Applied sciences (ROP): ROP is a 6.42% of the portfolio place first bought in Q2 & Q3 2014 at costs between $129 and $150. The stake noticed incremental shopping for within the following quarters. In Q2 2016, there was a ~20% enhance at costs between $165 and $185. The primary three quarters of 2020 noticed a ~22% stake enhance at costs between $254 and $453. The inventory is now at ~$457. H1 2021 noticed a ~12% trimming.
CoStar Group (CSGP): The 4.31% CSGP stake was bought in This autumn 2019 at costs between ~$54 and ~$62 and elevated by ~75% subsequent quarter at costs between ~$52 and ~$74. Q2 2020 noticed one other ~120% stake enhance at costs between ~$53 and ~$73. There was a ~25% discount in Q2 2022 at costs between ~$54 and ~$68. The inventory presently trades at $79.85.
Notice: The costs quoted above are adjusted for the 10-for-1 inventory break up final June.
Danaher Company (DHR): DHR is a ~4% of the portfolio place established in This autumn 2013 at costs between $47 and $55 and elevated by roughly five-times in Q2 2014 at costs between $52 and $59. The inventory is now at ~$231. There was a ~8% stake enhance final quarter.
Notice: The costs quoted above are adjusted for the Fortive spinoff in July 2017.
Brookfield Asset Administration (BAM): BAM is a small ~1% of the portfolio place established on account of the spinoff from Brookfield Corp. The inventory presently trades at $31.60.
Goosehead Insurance coverage (GSHD): GSHD is a minutely small place established in This autumn 2018 and elevated over the following two quarters. There was periodic shopping for since. Goosehead had an IPO in April 2018 priced at $10. Q3 2022 noticed a ~30% promoting at costs between ~$36 and ~$71. It presently trades at $57.62. The place could be very small at 0.11% of the portfolio.
Alphabet (GOOG) Calls: The leveraged lengthy stake in GOOGL by way of Calls is a really small 0.09% of the portfolio place established in Q2 2022. GOOG presently goes for ~$126.
Berkshire Hathaway (BRK.B) and Verisk Analytics (VRSK): These two minutely small stakes have been stored regular this quarter.
Beneath is a spreadsheet that highlights the modifications to Akre Capital Administration’s 13F inventory portfolio as of Q1 2023:
Chuck Akre – Akre Capital Administration’s Q1 2023 13F Report Q/Q Comparability (John Vincent (writer))
Supply: John Vincent. Knowledge constructed from Akre Capital Administration’s 13F filings for This autumn 2022 and Q1 2023.
Editor’s Notice: This text discusses a number of securities that don’t commerce on a serious U.S. trade. Please concentrate on the dangers related to these shares.
