Additions

  • CVS HEALTH – CVS: Stock experienced weakness in June, and position was added to the portfolio. CVS continues to be one of the largest PBM organizations in the US.
  • FOX – FOXA: Market continues to value Fox very conservative despite wide moat comprised of high quality content generation and distribution assets globally. Sky acquisition proceeds are planned. Stock analysis is featured in the section below.
  • GE – GE: With the CEO change and ongoing traction in industrial segment, we believe that GE remains undervalued. GE’s wide moat is based on the value of the installed equipment base and recurring nature of after-market services.
  • WELLS FARGO – WFC: Wells hovers in low $50 territory which allowed us to add to the position at attractive prices. Normalized interest environment and low cost stable deposit base will eventually unlock Well’s underlying earning power. Stock analysis is featured in the section below.

Reductions

None

%

12mth Performance

Portfolio Performance

Underlying companies’ earnings remain robust with no major surprises in Q1 earnings cycle. Google, Apple and Microsoft continued to rapidly grow earnings and stocks are correspondingly tracking the underlying earnings trends. IBM is lagging with another disappointing quarter, we’re not sellers at this price though. We remain optimistic on large cap IT as this sector of the economic is gaining share and the incumbents are widening the moat around their core services and products with the help of machine learning and access to large data sets.

Healthcare stocks remain a good value, in our opinion, with high margins, improving R&D productivity and continued opportunity for innovation. We have no views on the likely effects of the healthcare reforms, other than that there will always remain a scope for innovation that patients and payers are happy to pay for.

Financials continue to perform well and in line with underlying economic trends. Credit quality remains stable whilst low interest environment is causing interest income to lag. Normalized interest environment will support financial’s earnings, however we can predict neither the likelihood or nor timing of such event.

Our portfolio philosophy centers on holding wide moat companies, purchased at reasonable prices and held for long-term with low portfolio turnover. Investors rarely benefit from rapid buying and selling of securities and inaction is often the most rational course of action. After buying security at reasonable prices, long-term security holders will get fair share of wealth created by the underlying companies, which in the case of US select portfolio we believe will be satisfatory.

For investors looking to replicate the US selection portfolio, we recommend to only add/initiate positions highlighted in Green and wait for other holdings to become available at more attractive prices. Holdings highlighted in Green, we believe, are available at prices that rational investors would consider reasonable and attractive.

Featured Companies Analysis

Wells Fargo (WFC) – All You Need To Know About This Bank and When to Buy In


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Investment Thesis Wells Fargo (WFC) franchise is founded on its the vast and low cost deposit base, its prudent lending practices and its superior non-interest fee revenue streams. Wells is one of the top 3 deposit takers in the US with 10% market share with average...

21st Century Fox (FOXA) – Powerful franchise, Underappreciated assets


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Investment Thesis 21st Century Fox is a global media conglomerate with strong and in our opinion durable competitive advantage in both content creation (film and TV studios) and content distribution (cable network assets, Hulu stake). We believe, that despite ongoing...

Alphabet (GOOGL) – Savvy Ways to Profit with Google


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Investment Thesis GOOG remains top large cap technology pick with number of growth opportunities. GOOG has built a tremendous competitive moat around its business. Company dominates the online search market with global market share of above 80%, thus remaining a...

Featured Investing Learnings

All Howard Marks Knows About the Investing


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Wonderful recording from Howard Marks' visit to India, summarizing "everything" that he knows about investing (mp3 download - 79MB)

Wells Fargo (WFC): Fake Accounts Case Study – Aim for Eight or Lessons in Humility for the Mighty and Successful


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“Aim for Eight” In summer of 2010, John Stumpf, Wells Fargo CEO, marched with his management team in front of an auditorium full of analysts to showcase Wells Fargo successes and strategies at bi-annual investor day. Spirits were high and optimism was abound. Wells...