Markets

Lou Simpson Increases 7 Stakes in 3rd Quarter

Warren Buffett met Lou Simpson in 1996 when he was CEO of Geico's capital operations and Buffett was completing his purchase of the insurance company. Buffett kept Simpson on as chief investment officer. At his retirement from Geico in 2010, Simpson managed more than $4 billion worth of stocks.

During the third quarter, Simpson's investment firm SQ Advisors bought shares of seven companies, and all of them have been additions to existing stakes.

He increased his stake in Ametek Inc. ( AME ) by 351.47% with an impact of 11.3% on the portfolio. The current stake is 14.3% of his total assets and 3.42% of the company's outstanding shares.

Ametek is a manufacturer of electronic instruments and electromechanical devices with operations in North America, Europe, Asia and South America. During the last quarter, sales decreased by 3% and operating income increased 3% from the same quarter of a year before. Operating margins were up 130 basis points to 23.8%, and diluted EPS grew by 5%.

GuruFocus gives Ametek a profitability and growth rating of 8 out of 10 with strong returns of ROE 4.67% and ROA 3.71% that are outperforming 87% of the companies in the Global Diversified Industrials industry. Financial strength has a high rating of 6 out of 10 with cash to debt of 0.17 that is below the industry median of 0.74.

Simpson is the largest shareholder of the company among the gurus, followed by Columbia Wanger ( Trades , Portfolio ) with 2.68% of outstanding shares, Mario Gabelli (Trades, Portfolio) with 1.11% and Meridian Funds (Trades, Portfolio) with 0.47%.

Simpson increased his stake in Liberty Global PLC ( LBTYK ) by 61.45% with an impact of 8.66% on the portfolio. The current stake is 10.97% of his total assets and 0.93% of the company's outstanding shares.

Liberty Global provides video, broadband internet, fixed-line telephone and mobile services across 14 countries. As they expected, Q3 organic additions showed a strong improvement from the modest subscriber gains in the first half of 2015. The company reported a 4% increase in revenue for the third quarter.

GuruFocus gives Liberty Global a profitability and growth rating of 4 out of 10 with negative returns of ROE 4.67% and ROA 3.71% that are underperforming 78% of the companies in the Global Pay TV industry. Financial strength has a high rating of 6 out of 10 and a very weak cash to debt of 0.02 that is far below industry median of 0.4.

Dodge & Cox is largest shareholder of the company among the gurus with 2.46% of outstanding shares, followed by Chris Davis (Trades, Portfolio) with 2%, First Eagle Investment (Trades, Portfolio) with 1.42% and Lee Ainslie (Trades, Portfolio) with 1.42%.

Simpson also increased his stake in Brookfield Asset Management Inc. ( BAM ) by 25.84% with an impact of 2.91% on the portfolio. The current stake is 14.9% of his total assets and 1.4% of the company's outstanding shares.

The company owns and operates assets with a focus on property, renewable energy, infrastructure and private equity. Its segments include Asset management, Property, Renewable energy, Infrastructure, Private equity, Residential development, Service and Corporate. During the third quarter, funds from operations grew by 10% year over year.

GuruFocus gives Brookfield Asset a profitability and growth rating of 8 out of 10 with strong ROE of 11.59% that is outperforming 68% of the companies in the Global Real Estate - General industry. Financial strength has a high rating of 6 out of 10 with cash to debt of 0.13 that is below industry median of 0.29.

Simpson is largest shareholder of the company among the gurus with 1.4% of outstanding shares, followed by Glenn Greenberg (Trades, Portfolio) with 0.89%, Tom Gayner (Trades, Portfolio) with 0.52% and Third Avenue Management (Trades, Portfolio) with 0.48%.

Simpson increased his stake in Valeant Pharmaceuticals International Inc. ( VRX ) by 13% with an impact of 1.35% on the portfolio. The current stake is 11.69% of his total assets and 0.57% of the company's outstanding shares.

It is a multinational, specialty pharmaceutical and medical device company that develops, manufactures, and markets a range of branded, generic and branded generic pharmaceuticals, over-the-counter products OTC, and medical devices. The company reported a 36% increase for total revenues over the prior year, despite negative foreign exchange impact. Same store sales organic had a growth of 13%.

GuruFocus gives Valeant Pharmaceuticals a profitability and growth rating of 9 out of 10 with good ROE of 9.78% that is outperforming 59% of the companies in the Global Drug Manufacturers - Specialty & Generic industry. Financial strength has a high rating of 6 out of 10 and cash to debt of 0.05 that is far below industry median of 1.42.

Ruane Cunniff (Trades, Portfolio) is largest shareholder of the company among the gurus with 10.46% of outstanding shares, followed by Bill Ackman (Trades, Portfolio) with 9.94%, Jeff Ubben (Trades, Portfolio) with 4.37% and John Paulson (Trades, Portfolio) with 2.59%.

Simpson increased his stake in Berkshire Hathaway Inc. (BRK.B) by 6.32% with an impact of 0.7% on the portfolio. The current stake is 11.8% of his total assets and 0.11% of the company's outstanding shares.

It is a holding company owning subsidiaries engaged in a number of diverse business activities, including insurance and reinsurance, freight rail transportation, utilities and energy, finance, manufacturing, service and retailing. During the third quarter, operating earnings decreased 3.2% year over year due to lower insurance underwriting income, while revenue was up 15.2% year over year.

GuruFocus gives Berkshire Hathaway a profitability and growth rating of 7 out of 10 with good returns of ROE 9.38% and ROA 4.28% that are outperforming 51% of the companies in the Global Insurance - Diversified industry. Financial strength has a high rating of 4 out of 10 with cash to debt of 0.78.

Bill Gates (Trades, Portfolio) is the largest shareholder of the company among the gurus with 3.24% of outstanding shares, followed by Ken Fisher (Trades, Portfolio) with 0.23%, Ruane Cunniff (Trades, Portfolio) with 0.2% and David Rolfe (Trades, Portfolio) with 0.19%.

He increased his stake in Charles Schwab Corp. ( SCHW ) by 3.58% with an impact of 0.41% on the portfolio. The current stake is 11.95% of his total assets and 0.95% of the company's outstanding shares.

The company, through its subsidiaries, is engaged in securities brokerage, banking and related financial services. During the third quarter, earnings grew 17% year-over-year. Net income grew by 7% from the second quarter and was up 17% from the third quarter of 2014.

GuruFocus gives Charles Schwab a profitability and growth rating of 7 out of 10 with good ROE 10.77% that is outperforming 67% of the companies in the Global Capital Markets industry. Financial strength has a high rating of 6 out of 10 and cash to debt of 3.58 that is positive but underperforming the industry, which has an average ratio of 22.29.

Dodge & Cox is the largest shareholder of the company among the gurus with 7.32% of outstanding shares, followed by PRIMECAP Management (Trades, Portfolio) with 4.28%, Frank Sands (Trades, Portfolio) with 3.19% and Steve Mandel (Trades, Portfolio) with 1.02%.

Simpson also increased his stake in Wells Fargo & Co. ( WFC ) by 3.85% with an impact of 0.4% on the portfolio. The current stake is 10.87% of his total assets and 0.12% of the company's outstanding shares.

Wells Fargo provides retail, commercial and corporate banking services. GuruFocus gives Wells Fargo a profitability and growth rating of 5 out of 10 with positive returns such as ROE 11.54% and ROA 1.35% that are outperforming 72% of the companies in the Global Banks - Global industry. Financial strength has a high rating of 6 out of 10 with cash to debt of 0.06 that is below industry median of 1.47

Warren Buffett (Trades, Portfolio) is the largest shareholder of the company among the gurus with 9.21% of outstanding shares, followed by Dodge & Cox with 1.4%, James Barrow (Trades, Portfolio) with 0.79% and Chris Davis (Trades, Portfolio) with 0.59%.

About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .

This article first appeared on GuruFocus .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BAM LBTYK SCHW WFC

Other Topics

Stocks

Latest Markets Videos