This page lists the portfolio holdings of Whitney R. Tilson.
Stock Holdings
Whitney R. Tilson - Tilson Focus
Period: Q1 2010
Portfolio date: 30 Apr 2010
No. of stocks: 70
Portfolio value: $13,554,000
Sector % analysis
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Articles & Commentaries
01 Sep 2010 T2 Partners Presentation
Makes the case for and recommends three large-cap blue chips: Anheuser-Busch InBev, Microsoft, and BP...
Makes the case for and recommends three large-cap blue chips: Anheuser-Busch InBev, Microsoft, and BP...
04 Feb 2010 Buy and Hold Is Risky
Dataroma's opinion: Well, it depends on what stocks you buy and hold. Stocks are businesses and if you plan to buy and hold a business, it must be a durable one with a sustainable competitive advantage and sustainable margins.
Dataroma's opinion: Well, it depends on what stocks you buy and hold. Stocks are businesses and if you plan to buy and hold a business, it must be a durable one with a sustainable competitive advantage and sustainable margins.
11 Jan 2010 Tilson Funds - Commentary
Berkshire Hathaway
Under Warren Buffett’s direction, Berkshire's performance has been nothing short of remarkable over the past two years. His disciplined capital retention looked overly conservative for many years, but when the crisis hit there were few buyers and waves of panicked sellers, so he was able to deploy tens of billions of dollars in some terrific businesses, on highly favorable terms. He paid a full price for his most recent (and largest ever) investment, Burlington Northern Santa Fe, but it made sense for Berkshire – and only for Berkshire – because of the company’s low cost of capital, in the form of float from Berkshire’s vast insurance operations ($62 billion worth as of the end of Q3). Berkshire reported strong operating earnings and an unprecedented 10.1% increase in book value during the third quarter, which reinforce our belief that Berkshire’s stock, at around $100,000 per A share, is at least 25% undervalued.
Pfizer
Pfizer, which recently completed its merger with Wyeth, is weighed down by various concerns including the expiration of the patent on its largest drug, Lipitor, and the impact of Obamacare. Investors fear that health-care reform will hurt the entire industry, a key reason that the sector trades at just 12 times earnings, or 36% below the P/E of the S&P 500 (historically, such high-quality businesses have commanded higher P/Es than the index). We think that the pessimism is overdone.
Historically, however, investors in pharmaceutical companies have over-reacted to possible government actions (it was a fabulous time to buy the sector during the days of Hillarycare) and the end of patent protection on best-selling drugs, underweighting the value of the drug pipeline. Thus, we think the well-known negative scenarios are already priced into the stock, creating a situation ripe for positive surprises.
With the stock around $18, it trades at approximately 8x expected 2010 earnings of $2.26 per share. That’s far too low for a company of its caliber. While waiting for the market to recognize the value we see, investors should earn a dividend yield of approximately 3.5%.
American Express
We’re pleased to report that our analysis was exactly right, as the stock has approximately quadrupled since then. The company is recovering nicely from the perfect storm that hit it – a combination of external factors and the company’s own missteps – and analysts project that earnings in 2010 will rebound to $2.35/share, meaning the stock, at around $39, is trading at less than 17x earnings. This is a modest valuation for such a high-quality business, so we continue to hold the stock, though we’ve trimmed the position substantially.
Berkshire Hathaway
Under Warren Buffett’s direction, Berkshire's performance has been nothing short of remarkable over the past two years. His disciplined capital retention looked overly conservative for many years, but when the crisis hit there were few buyers and waves of panicked sellers, so he was able to deploy tens of billions of dollars in some terrific businesses, on highly favorable terms. He paid a full price for his most recent (and largest ever) investment, Burlington Northern Santa Fe, but it made sense for Berkshire – and only for Berkshire – because of the company’s low cost of capital, in the form of float from Berkshire’s vast insurance operations ($62 billion worth as of the end of Q3). Berkshire reported strong operating earnings and an unprecedented 10.1% increase in book value during the third quarter, which reinforce our belief that Berkshire’s stock, at around $100,000 per A share, is at least 25% undervalued.
Pfizer
Pfizer, which recently completed its merger with Wyeth, is weighed down by various concerns including the expiration of the patent on its largest drug, Lipitor, and the impact of Obamacare. Investors fear that health-care reform will hurt the entire industry, a key reason that the sector trades at just 12 times earnings, or 36% below the P/E of the S&P 500 (historically, such high-quality businesses have commanded higher P/Es than the index). We think that the pessimism is overdone.
Historically, however, investors in pharmaceutical companies have over-reacted to possible government actions (it was a fabulous time to buy the sector during the days of Hillarycare) and the end of patent protection on best-selling drugs, underweighting the value of the drug pipeline. Thus, we think the well-known negative scenarios are already priced into the stock, creating a situation ripe for positive surprises.
With the stock around $18, it trades at approximately 8x expected 2010 earnings of $2.26 per share. That’s far too low for a company of its caliber. While waiting for the market to recognize the value we see, investors should earn a dividend yield of approximately 3.5%.
American Express
We’re pleased to report that our analysis was exactly right, as the stock has approximately quadrupled since then. The company is recovering nicely from the perfect storm that hit it – a combination of external factors and the company’s own missteps – and analysts project that earnings in 2010 will rebound to $2.35/share, meaning the stock, at around $39, is trading at less than 17x earnings. This is a modest valuation for such a high-quality business, so we continue to hold the stock, though we’ve trimmed the position substantially.
31 Dec 2009 Long and Strong
'People ask why I'm a long-term investor. I'm not against making money in the short term. I just don't know how to do it.''
Whatever is causing the undervaluation--typically market neglect, temporary operating troubles and/or the fact that the industry is out of favor--can persist for an inconveniently long time. So patience is a necessary virtue for those who still believe that value investing works.
'People ask why I'm a long-term investor. I'm not against making money in the short term. I just don't know how to do it.''
Whatever is causing the undervaluation--typically market neglect, temporary operating troubles and/or the fact that the industry is out of favor--can persist for an inconveniently long time. So patience is a necessary virtue for those who still believe that value investing works.
06 Jul 2009 Video: Whitney Tilson talks to Steve Forbes
... as far as commodities, you know, when you pour a lot of money into our economy, a lot of that goes seeking something, you know, you got to buy something with it. And I think the intent is that that money would be invested in creating jobs or something like that. But the reality is I think some of that money's just going to speculate on commodities. And it never ceases to amaze me how short investors' memories are. It was only three months ago that there was no price at which people wouldn't sell something, and now it seems there's no price at which they won't buy sometimes the exact same thing they were selling three months ago. So, it constantly surprises me to see it. But as a value investor, it's wonderful because other people behaving irrationally is what creates opportunity for savvy long-term investors.
We think a lot of blue chip stocks have not rallied much in this rally since March. Pfizer's got $18 billion in net cash. They've got the biggest distribution, drug-distribution, network in the world. And they trade at eight times earnings. A company like Pfizer shouldn't trade at eight times earnings unless you think earnings are going to collapse. And we think there's going to be a headwind to earnings, but we don't think they're going to collapse. So, you can build a very nice, pretty safe blue-chip portfolio that isn't going to double in the next few months, but is very likely to double in the next few years. And that's a pretty satisfactory return.
... as far as commodities, you know, when you pour a lot of money into our economy, a lot of that goes seeking something, you know, you got to buy something with it. And I think the intent is that that money would be invested in creating jobs or something like that. But the reality is I think some of that money's just going to speculate on commodities. And it never ceases to amaze me how short investors' memories are. It was only three months ago that there was no price at which people wouldn't sell something, and now it seems there's no price at which they won't buy sometimes the exact same thing they were selling three months ago. So, it constantly surprises me to see it. But as a value investor, it's wonderful because other people behaving irrationally is what creates opportunity for savvy long-term investors.
We think a lot of blue chip stocks have not rallied much in this rally since March. Pfizer's got $18 billion in net cash. They've got the biggest distribution, drug-distribution, network in the world. And they trade at eight times earnings. A company like Pfizer shouldn't trade at eight times earnings unless you think earnings are going to collapse. And we think there's going to be a headwind to earnings, but we don't think they're going to collapse. So, you can build a very nice, pretty safe blue-chip portfolio that isn't going to double in the next few months, but is very likely to double in the next few years. And that's a pretty satisfactory return.