Russo Still Likes Berkshire, Tobacco, Mastercard, Wells Fargo

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Thomas Russo of Gardner Russo & Gardner sits atop a $6 billion stock portfolio and has added major names.

Russo Traditional holdings

The portfolio’s biggest love affair is with its long time sweetheart Nestle SA (VTX:NESN), which accounts for 10.65% of the portfolio, just over 14.6 million shares.  This allocation, which he has held since 1987, increased by 0.39% in the quarter at an executed price of $75.34.

The fund’s oldest holding, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), which was acquired in 1982, has an allocation of 9.26% in the portfolio with just over 5,000 shares.  Russo upped the ante with Warren Buffett by 0.61% on the quarter.

Likes “sin” stocks

Russo likes the sin stocks, as his next stock on the list is tobacco giant Philip Morris International Inc. (NYSE:PM), which received a 2.21% allocation increase.  Other Tobacco stocks include British American Tobacco plc (LON:BATS), Altria Group Inc (NYSE:MO), all with increases in portfolio allocation.  Other “sin” stocks include Heineken Holding NV, representing 6.50% of the portfolio, Anheuser Busch Inbev SA (ADR) (NYSE:BUD) representing 5.13% of the portfolio, SABMiller plc (LON:SAB) which, at 5.57% of the portfolio received a strong 4.21% allocation increase.

The stock with the largest increase in allocation in the portfolio, however, is Heineken N.V. (ADR) (OTCMKTS:HINKY), which was increased by a factor of 9.24% followed by Unilever N.V. (ADR) (NYSE:UN), which saw its allocation increase by 7.16%.

Likes Mastercard and Wells Fargo

In terms of financials, Russo favors the traditional banking plays and shies away from those banks with significant unregulated derivatives exposure. Russo likes Mastercard Inc (NYSE:MA) and Wells Fargo & Co (NYSE:WFC), top holdings at near 7% exposure for each, while they reduced their stake in Goldman Sachs Group Inc (NYSE:GS) in the quarter by 1.93% bringing their allocation to this stock at 0.09%.

Russo shed holdings in some interesting names.  He raced out of the door in General Electric Company (NYSE:GE), shedding near 47% of his stake, while reducing exposure to oil marketer BP by 38%.  Other big names losers in Russo’s selling spree include Comcast Corporation (NASDAQ:CMCSA), with holdings down 31%, International Business Machines Corp. (NYSE:IBM), who is currently on parade to talk up the stock, down 18% and Chevron Corporation (NYSE:CVX) shedding 16.45% of the allocation while PepsiCo, Inc. (NYSE:PEP) lost 22% of the previous allocation from Russo.



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com