The Tweedy Browne Team was first established in 1920 by Forrest Birchard Tweedy. At the onset, he specialized in trading closely held and not actively traded securities. The firm is still based on dealing with undervalued securities. Over the years the firm has changed names a few times and grown into a multi billion dollar company, offering clients a wide variety of investment strategies to help them realize long term growth of capital.
Currently the Tweedy, Browne Value (MUTF:TWEBX) holds shares in 47 stocks, with a portfolio worth $429,147,000. Main holdings include Nestle, Heineken, Total SA, Diageo PLC, Novartis AG. Many of these names are also owned by legendary value investor, Tom Russo.
Nestle SA (PINK:NSRGY) had no activity this quarter but still remained the fund’s largest holding.
Henri Nestle founded the Nestle Company in 1867 when he developed the first baby formula from milk in order to save his neighbor’s baby. The formula, Farine Lactee became the number one source of nutrition for babies unable to feed from their mothers or who where intolerant of other breast milk substitutes.
The company was founded on providing nutrition and that is still the company’s premium objective.
Over the years Nestle has bought up smaller companies who believe in quality and nutrition, making them the largest food and beverage company in the world. It strives to produce and market a large variety of foods which satisfy consumer’s nutritional needs in a pleasurable way.
Nestle predicts 2012 will be a challenging year, in spite of first quarter sales being up a hefty 5.6 percent from last year. The company fears higher retail prices and strong growth in emerging markets will have a major impact on sales.
Heineken N.V. (PINK:HINKY) (AMS:HEIA).(AMS:HEIO) (PINK:HKHHF). The fund’s second largest holding, no portfolio moves this quarter.
Heineken International was founded in Amsterdam by Gereard Adriaan Heineken in 1864. The company now owns 125 breweries around the world and employs approximately 66,000 people. What started out as the brewer of one premium beer 150 years ago has grown to more than 170 varieties. They claim their mainstay, Heineken Pilsener is still brewed using the original recipe that made Heineken famous.
The founding brewery in Amsterdam closed down in 1988, and is now preserved as the Heineken Experience museum.
The Dutch brewery says that first quarter growth comes from a combination of expansion and a one time gain.
Net profits were up 25 percent at €175 million (USD $230 million), from €151 million during the same period last year, but the increase included a €20 million gain on a stake in a revalued Haitian company. Profits from sales increased 6.8 percent – 3.5 percent from higher volumes produced and 3.3 percent from higher prices.
The family controlled company, expects 2012 to be quite profitable due to growth in Asia, Africa and Latin America, and from cutting costs – lower employee wages – in developed markets.
TOTAL S.A. (NYSE:TOT) Third largest holding which the firm added to in the first quarter.
Total SA, based in the La Défense district in Courbevoie, France, is one of the six “Super-major” oil and gas companies of the world. It’s operations cover the spectrum of the industry. This includes everything from crude oil production and exploration to final product trading. Total is also a large scale chemical manufacturer.
French origins give Total a major advantage over other oil companies by having a bigger reserve and production base in high-yield, less developed regions like the Middle East and Africa. Total is one of the few companies with operations in Iran. Associated with political unrest and terrorists, doing business here is quite risky for companies. Total has been able to avoid these problems. However, the company’s inexperience on the other side of the world has led to problems in places like Venezuela.
Currently the stock is trading at about $48. The stock hit its fifty-two week high of $64.44 last April, with a fifty-two week low coming in at $40.00 the following September. All indications point to a bullish 2012 for the company.
Diageo PLC (NYSE:DEO) (LON:DGE) (EPA:DGE) (PINK:DGEAF), the fund’s fifth largest holding was reduced 24% this past quarter.
Diageo is one of the largest producers and distributors of premium alcoholic beverages. Their vast product line includes whiskey, rum, vodka, beer and liqueur from around the world. The business is a participant in the branded beverage industry, with operations all over the world.
The company sold its Barton & Guestier Bordeaux division to Castel Freres in 2010, and acquired Mey Icki in August of 2011 and Meta Abo Brewery in January 2012. Diageo had reported earnings of 89 cents per share in the first quarter of 2012, compared to 75 cents the same period last year. The growth is credited to increased investments, increased promotional campaigns driving each product and a more solid standing in Western Europe. The company is currently trading at $101.77, with a P/E of 23.78 and market cap of $63.75 billion.
Novartis AG (NYSE:NVS) (PINK:NVSEF) , is the fifth largest holding. The mutual fund increased the stake by 14% this past quarter.
Novartis International is a multinational pharmaceutical company based in Switzerland. It ranks number two in the world, according to worldwide sales. The company manufactures a wide variety of drugs including diclofenac, slozapine, carbamazepne and valsartan. The company was named Novartis after being acquired by Ciba-Geigy, which is the owner of Sandoz, a large generic drug manufacturer. The company once owned Gerber, but sold it to Nestle in 2007.
First quarter earnings are scheduled to be released on April 24. Novartis currently trades at $56.43, with a market cap of $135.69B and a P/E of 14.83.