Chuck Akre (Trades, Portfolio)’s Akre Capital Management recently disclosed its fourth-quarter 2019 portfolio updates.
Akre founded Akre Capital Management in 1989 and now serves as the chairman and main financial commitment officer of the business. Headquartered in Middleburg, Virginia, the business invests in a modest range of top quality firms operate by good managers who reinvest their free of charge income movement properly. These are the three parts that make up Akre’s “three-legged stool” financial commitment philosophy, which the business is regarded for sticking carefully to.
As of the quarter’s stop, the equity portfolio consisted of twenty five shares valued at $ten.ninety one billion.
The firm’s top holdings were being American Tower Corp. (AMT) at fifteen.14%, Mastercard Inc. (MA) at 14.fifty nine% and Moody’s Corp. (MCO) at 12.39%. In terms of sector weighting, the business was mostly invested in fiscal providers, serious estate and buyer cyclical.
Akre proven new holdings in CoStar Group Inc. (NASDAQ:CSGP) and Ansys Inc. (NASDAQ:ANSS) during the quarter and manufactured sizeable additions to present investments in Brookfield Asset Management Inc. (NYSE:BAM) and CarMax Inc. (NYSE:KMX).
Akre’s biggest new acquire for the fourth quarter was for 250,000 shares of CoStar Group. The trade had a one.37% effect on the equity portfolio. Shares traded at an common cost of $584.40 over the noticed period of time.
CoStar Group is the company that many contemplate to be the range a person commercial serious estate details company. The Washington, D.C.-based mostly company supplies details, analytics and marketing and advertising providers to commercial properties in the U.S. and many other international locations.
On Feb. seventeen, shares of CoStar traded all over $731.37 for a industry cap of $26.seventy nine billion and a cost-earning ratio of 84.04. The company has reported continuous gains in income and internet income over the yrs.
GuruFocus has assigned CoStar a fiscal energy score of nine out of ten and a profitability score of eight out of ten. The income-personal debt ratio of nine.58 and desire coverage of a hundred thirty.2% are outperforming eighty two.28% of competitors, whilst the return on money of 251.88% is impressive for any market.
As the most dependable serious estate information vendor in the U.S., CoStar has a sizeable economic moat that continues to mature as it expands into other avenues of information assortment and distribution. Its 2014 acquisition of Apartments.com has been a high contributor to income expansion. Far more recently, it acquired STR Inc., a investigation company that tracks supply and desire for a number of sectors, such as the global resort and tourism industries.
Soon after advertising out of a previous keeping in Ansys in the 3rd quarter of 2016, the business proven a new place in the company of 163,740 shares, impacting the equity portfolio by .39%. All through the quarter, the inventory traded at an common cost of $237.46.
Ansys develops and sells multiphysics engineering simulation program for purposes such as product style, screening and procedure. The Canonsburg, Pennsylvania-based mostly company supplies style platform alternatives for a wide range of industries, such as tech, design, vitality, wellness treatment and aerospace, among the others.
On Feb. seventeen, Ansys shares traded all over $291.98 for a industry cap of $24.96 billion and a cost-earnings ratio of fifty seven.03. The company has noticed constant robust expansion in its income and internet income.
Ansys has a GuruFocus fiscal energy rating of seven out of ten and a profitability rating of ten out of ten. The income-personal debt ratio of six.ninety nine is bigger than sixty three.fifty one% of competitors.
Ansys is presently an proven chief in the engineering simulation house, but the market as a complete is envisioned to mature by fifteen% per year over the future 5 yrs, that means that it still has prospective to mature its subscriber foundation. The order backlog continues to mature, shooting up 19% year over year to $650.4 million as of the stop of the 3rd quarter of 2019. Since Ansys sells program, the backlog largely signifies very long-term subscriptions (deferred income) and substantial contracts.
Brookfield Asset Management
The expert boosted the Brookfield Asset Management place by 925,775 shares, or seventeen.39%, bringing the overall range of shares owned up to six,250,000. The trade had a .forty nine% effect on the equity portfolio. Shares traded at an common cost of $fifty six during the quarter.
Brookfield is an different asset manager that requires a very long-term financial commitment method toward high-top quality belongings and organization in extra than thirty international locations around the globe. Its asset investments are generally centered on commercial serious estate, infrastructure and ability plants, with a target on reinvesting money to make improvements to asset top quality.
On Feb. seventeen, Brookfield’s shares traded all over $sixty seven.96 apiece for a industry cap of $seventy one.22 billion and a cost-earnings ratio of 26.26. In accordance to the Peter Lynch chart, the inventory is overvalued.
Brookfield has a GuruFocus fiscal energy rating of three out of ten and a profitability rating of eight out of ten. The income-personal debt ratio of .05, desire coverage of one.41% and Altman Z-rating of .seventy four are rated reduce than 93.36% of competitors. The fifteen.07% running margin is common for the market, whilst the three-year income expansion price of 40.eight% is promising.
The asset manager operates on high leverage, racking up personal debt in order to rapidly improve income. At the stop of 2019, Brookfield had $143.three billion in personal debt in contrast to internet income for the year of $five.4 billion and income on hand of $six.eight billion. Assets underneath administration have developed to $545 billion in worth, whilst fee-bearing money is at $290 billion.
Akre invested in an supplemental 462,three hundred shares of CarMax, boosting the place by seven.36% and bringing the overall range of shares owned up to six,747,651. The trade had a .37% effect on the equity portfolio. All through the quarter, shares traded at an common cost of $94.14.
Headquartered in Richmond, Virginia, CarMax is a utilized-vehicle company with roughly 195 suppliers across the U.S. It delivers upfront charges, nationwide availability and online procuring.
On Feb. seventeen, CarMax shares traded all over $98.81 for a industry cap of $16.14 billion and a cost-earnings ratio of 19.fifteen. The Peter Lynch chart estimates that the inventory is trading close to its good worth.
GuruFocus has given CarMax a fiscal energy score of 4 out of ten and a profitability score of seven out of ten. The Altman Z-core of 2.02 is approximately in the distress zone, but the desire coverage of nine.36% is all over the market common. The company has a three-year income expansion price of 11.nine% and a three-year Ebitda expansion price of ten.six%.
As the most-regarded utilized vehicle retailer in the U.S., CarMax has noticed amplified results after moving into the online utilized vehicle industry.
“We remain enthusiastic about the one of a kind and effective expertise we are giving by means of omni-channel, which is empowering clients to store on their terms, each time and wherever it is most effortless for them. Our skill to seamlessly combine our actual physical and electronic activities whilst continuing to travel equivalent retailer profits expansion, maintain an eye-catching utilized auto gross gain per unit, and supply our outstanding client service is a crucial differentiator,” President and CEO Invoice Nash said in regard to the results for the company’s 2019 3rd quarter.
Disclosure: Author owns no shares in any of the shares described. The mention of shares in this short article does not at any place constitute an financial commitment recommendation. Traders must normally carry out their individual very careful investigation and/or check with registered financial commitment advisors prior to using motion in the inventory industry.
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