Portfolio holdings of William Frels. Mairs & Power Growth's Portfolio. William Frels stock picks:
Stock Holdings
William Frels - Mairs & Power Growth
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Investment Philosophy
Mairs and Power is an independent, employee owned firm whose strength and success has resulted from applying a consistent, conservative growth approach for over 80 years. The mutual funds and the individually managed accounts are built on a foundation of carefully selected, quality growth stocks purchased at reasonable valuation levels. These securities are purchased with the intention to hold them for relatively long periods of time to maximize tax-efficiency, to allow the power of compounding to build wealth for shareholders and to avoid undue risk. Occasionally sales are made in response to factors such as changing fundamentals, investment strategy shifts, and excessive valuation. This buy and hold strategy leads to low portfolio turnover which reduces costs and enhances performance. While this investment approach is not complicated, it has proven to be very effective over the long-term.
Mairs and Power is an independent, employee owned firm whose strength and success has resulted from applying a consistent, conservative growth approach for over 80 years. The mutual funds and the individually managed accounts are built on a foundation of carefully selected, quality growth stocks purchased at reasonable valuation levels. These securities are purchased with the intention to hold them for relatively long periods of time to maximize tax-efficiency, to allow the power of compounding to build wealth for shareholders and to avoid undue risk. Occasionally sales are made in response to factors such as changing fundamentals, investment strategy shifts, and excessive valuation. This buy and hold strategy leads to low portfolio turnover which reduces costs and enhances performance. While this investment approach is not complicated, it has proven to be very effective over the long-term.
Period: Q1 2013
Portfolio date: 31 Mar 2013
No. of stocks: 46
Portfolio value: $2,876,097,000
| Stock | % of portfolio | Shares | Recent activity | Reported Price* | |
| hist | VAL - Valspar Corp. | 4.74 | 2,190,000 | $62.25 | |
| hist | MMM - 3M Co. | 4.51 | 1,220,000 | $106.31 | |
| hist | TGT - Target Corp. | 4.43 | 1,860,000 | Add 6.29% | $68.45 |
| hist | MDT - Medtronic Inc. | 4.18 | 2,560,000 | Add 10.82% | $46.96 |
| hist | EMR - Emerson Electric | 4.10 | 2,110,000 | Add 18.87% | $55.87 |
| hist | HON - Honeywell Int'l Inc. | 4.06 | 1,550,000 | $75.35 | |
| hist | PNR - Pentair Ltd. | 4.02 | 2,190,000 | $52.75 | |
| hist | ECL - Ecolab Inc. | 3.95 | 1,415,153 | $80.18 | |
| hist | FUL - Fuller (H.B.) Co. | 3.87 | 2,850,000 | $39.08 | |
| hist | TTC - Toro Co. | 3.84 | 2,400,000 | $46.04 | |
| hist | GGG - Graco Inc. | 3.77 | 1,870,000 | $58.03 | |
| hist | USB - U.S. Bancorp | 3.56 | 3,020,000 | Add 3.78% | $33.93 |
| hist | DCI - Donaldson Co. | 3.31 | 2,630,000 | Add 0.38% | $36.19 |
| hist | HRL - Hormel Foods Corp. | 3.20 | 2,230,000 | $41.32 | |
| hist | JNJ - Johnson & Johnson | 3.20 | 1,130,000 | Add 1.80% | $81.53 |
| hist | BMS - Bemis Co. | 3.07 | 2,185,000 | $40.36 | |
| hist | BAX - Baxter International Inc. | 2.60 | 1,030,000 | $72.64 | |
| hist | GIS - General Mills | 2.49 | 1,450,000 | $49.31 | |
| hist | WFC - Wells Fargo | 2.47 | 1,920,000 | $36.99 | |
| hist | MTSC - MTS Systems Corp. | 2.43 | 1,200,000 | $58.15 | |
| hist | GE - General Electric | 2.32 | 2,890,000 | Add 4.33% | $23.12 |
| hist | STJ - St Jude Medical | 1.86 | 1,320,000 | Add 0.76% | $40.44 |
| hist | PFG - Principal Financial Group | 1.83 | 1,550,000 | Add 34.78% | $34.03 |
| hist | TCB - TCF Financial | 1.62 | 3,110,000 | $14.96 | |
| hist | UPS - United Parcel Service | 1.58 | 530,000 | Add 60.61% | $85.90 |
| hist | PFE - Pfizer Inc. | 1.56 | 1,550,000 | $28.86 | |
| hist | PDCO - Patterson Cos. Inc. | 1.51 | 1,140,000 | Add 1.79% | $38.04 |
| hist | CHRW - C.H. Robinson Worldwide | 1.35 | 655,000 | Add 98.48% | $59.46 |
| hist | SLB - Schlumberger Ltd. | 1.25 | 480,000 | Add 26.32% | $74.89 |
| hist | FAST - Fastenal | 1.23 | 690,000 | $51.35 | |
| hist | ZMH - Zimmer Holdings | 1.12 | 430,000 | $75.22 | |
| hist | GLW - Corning Inc. | 1.11 | 2,390,000 | Add 16.02% | $13.33 |
| hist | TECH - Techne Corp. | 0.97 | 410,500 | Add 104.74% | $67.85 |
| hist | TRV - Travelers Companies Inc. | 0.88 | 300,000 | $84.19 | |
| hist | GKSR - G & K Services Cl A | 0.81 | 510,000 | $45.51 | |
| hist | NVEC - NVE Corp. | 0.78 | 396,370 | Add 46.53% | $56.42 |
| hist | CRAY - Cray Inc. | 0.72 | 892,500 | $23.21 | |
| hist | DIS - Walt Disney Co. | 0.71 | 360,000 | Add 176.92% | $56.80 |
| hist | DAKT - Daktronics Inc. | 0.71 | 1,937,400 | Add 8.89% | $10.50 |
| hist | ASBC - Associated Banc-Corp. | 0.69 | 1,300,000 | Add 44.44% | $15.19 |
| hist | WU - Western Union Co. | 0.67 | 1,290,000 | Add 118.64% | $15.04 |
| hist | BMI - Badger Meter Inc. | 0.62 | 332,000 | $53.52 | |
| hist | QCOM - QUALCOMM Inc. | 0.61 | 260,000 | Buy | $66.95 |
| hist | SRDX - SurModics Inc. | 0.60 | 628,800 | $27.25 | |
| hist | INTC - Intel Corp. | 0.59 | 780,000 | $21.85 | |
| hist | FISV - Fiserv Inc. | 0.52 | 170,000 | $87.83 |
* Reported Price is the price of the security on the portfolio date. This value is significant in that it indicates the portfolio manager's confidence in the stock at that price and suggests at least some level of undervaluation and/or margin of safety.
Sector % analysis
| Industrials | 34.90 | |
| Health Care | 17.60 | |
| Materials | 15.63 | |
| Financials | 11.05 | |
| Information Technology | 6.64 | |
| Consumer Staples | 5.69 | |
| Consumer Discretionary | 5.14 | |
| Technology | 2.12 | |
| Energy | 1.25 |
Articles & Commentaries
16 Oct 2009 Mairs & Power Growth - Market Commentary
There is little question that the fear gripping the markets in the first quarter has dissipated and that the primary concern among investors is shifting from a fear of being in a declining market to a fear of being out of a rising market. As mentioned, much of this optimism is due to investors’ beliefs that one of the worst recessions since the 1930s appears to be coming to an end
Despite the improving economy and the rebounding stock market, there are some issues to watch longer term. The most prominent of these are rising budget deficits and the increasing federal debt. The concern is that these trends could lead to rising inflation, higher interest rates and a weaker dollar. While these issues are not an immediate threat, it is critical that future federal spending be restrained as the economy and financial system recover. On balance, we continue to believe the long-term outlook for the stock market is favorable. While the stock market is certainly not as cheap as it was earlier this year and a modest pullback would not be a surprise, valuations are still reasonable and the stock market remains over 30% below the highs reached in October of 2007. Going forward, we continue to expect long-term returns to trend toward historical averages of approximately 10% per year.
There is little question that the fear gripping the markets in the first quarter has dissipated and that the primary concern among investors is shifting from a fear of being in a declining market to a fear of being out of a rising market. As mentioned, much of this optimism is due to investors’ beliefs that one of the worst recessions since the 1930s appears to be coming to an end
Despite the improving economy and the rebounding stock market, there are some issues to watch longer term. The most prominent of these are rising budget deficits and the increasing federal debt. The concern is that these trends could lead to rising inflation, higher interest rates and a weaker dollar. While these issues are not an immediate threat, it is critical that future federal spending be restrained as the economy and financial system recover. On balance, we continue to believe the long-term outlook for the stock market is favorable. While the stock market is certainly not as cheap as it was earlier this year and a modest pullback would not be a surprise, valuations are still reasonable and the stock market remains over 30% below the highs reached in October of 2007. Going forward, we continue to expect long-term returns to trend toward historical averages of approximately 10% per year.
27 Feb 2009 Mairs and Power Growth Fund - Annual Report
Considering the economic deterioration that took place both here and abroad during the fourth quarter and the continuing rise in unemployment so far in 2009, the outlook appears anything but encouraging. Moreover, a continuing decline in real estate values and an eroding level of consumer confidence also indicate that an early turnaround appears unlikely. However, contrary to what most experts believe, the rapidity and severity of the recent decline in economic activity also suggests that we could be closer to a bottom from which a sustained recovery can take place.
Looking ahead, we believe such factors as home prices, unemployment rates and personal disposable income will begin to stabilize around mid-year and start to show signs of a slow but gradual recovery by the end of the year. This is suggested by a number of factors including the dramatic change in monetary policy which began last fall, resulting in historically low interest rates, significantly lower commodity prices (especially energy) due to reduced world demand and a number of massive stimulative actions coming out of Washington aimed at increasing liquidity, providing greater access to credit and restoring confidence.
While the exact timing of a turnaround in the stock market is difficult to predict, history tells us that coming out of a recession, prices usually begin to move up well in advance of any tangible improvement in corporate profits and the overall economy. Because valuation levels (13 times a rather depressed level of estimated 2009 earnings for the S & P 500) appear quite reasonable compared to the current level of interest rates (less than 3% for ten year U. S. Treasury bonds and 1.0% or less for money market fund rates), we believe the market has significant upside potential. Moreover, a record high level of cash reserves in the hands of investors should provide more than enough buying power to fuel any upward move. In conclusion, the risk/reward ratio for the stock market would seem to be very attractive, especially for those investors who have the patience to endure the possibility of lower prices near-term in favor of a much greater longer term potential over the next several years.
Considering the economic deterioration that took place both here and abroad during the fourth quarter and the continuing rise in unemployment so far in 2009, the outlook appears anything but encouraging. Moreover, a continuing decline in real estate values and an eroding level of consumer confidence also indicate that an early turnaround appears unlikely. However, contrary to what most experts believe, the rapidity and severity of the recent decline in economic activity also suggests that we could be closer to a bottom from which a sustained recovery can take place.
Looking ahead, we believe such factors as home prices, unemployment rates and personal disposable income will begin to stabilize around mid-year and start to show signs of a slow but gradual recovery by the end of the year. This is suggested by a number of factors including the dramatic change in monetary policy which began last fall, resulting in historically low interest rates, significantly lower commodity prices (especially energy) due to reduced world demand and a number of massive stimulative actions coming out of Washington aimed at increasing liquidity, providing greater access to credit and restoring confidence.
While the exact timing of a turnaround in the stock market is difficult to predict, history tells us that coming out of a recession, prices usually begin to move up well in advance of any tangible improvement in corporate profits and the overall economy. Because valuation levels (13 times a rather depressed level of estimated 2009 earnings for the S & P 500) appear quite reasonable compared to the current level of interest rates (less than 3% for ten year U. S. Treasury bonds and 1.0% or less for money market fund rates), we believe the market has significant upside potential. Moreover, a record high level of cash reserves in the hands of investors should provide more than enough buying power to fuel any upward move. In conclusion, the risk/reward ratio for the stock market would seem to be very attractive, especially for those investors who have the patience to endure the possibility of lower prices near-term in favor of a much greater longer term potential over the next several years.
