David Rolfe Adds to Stakes in 18 Companies During Third Quarter

Author's Avatar
Nov 17, 2014
Article's Main Image

David Rolfe (Trades, Portfolio) is thechief investment officer of the St. Louis-based $1.3 billion investment management firm Wedgewood Partners Inc. Wedgewood's underlying equity investment philosophy is predicated on a strong belief that significant long-term wealth will be created by investing as "owners" in companies.

Wedgewood’s principles for investing are:

  1. A dominant product or service that is practically irreplaceable or lacks substitutes.
  2. A sustainable and consistent level of growing revenues, earnings and dividends.
  3. A high level of profitability, measured by return on equity without the use of excessive debt.
  4. A strong management team that is shareholder-oriented.

In 2012, Wedgewood had a return on investments of 21.75%, more than four times its gain of the previous year.

Buys

Rolfe added to his positions in 18 companies – Qualcomm Inc (QCOM, Financial), Cognizant Technology (CTSH, Financial), LKQ Corp (LKQ, Financial), Express Scripts (ESRX, Financial), M&T Bank Corp (MTB, Financial), Berkshire Hathaway Inc (BRK.B, Financial), Coach Inc (COH, Financial), Cummins Inc (CMI, Financial), Priceline Group Inc (PCLN, Financial), Varian Medical Systems Inc (VAR, Financial), EMC Corp (EMC, Financial), Stericycle Inc (SRCL), Schlumberger NV (SLM), Verisk Analytics Inc (VRSK), Visa Inc (V), Google Inc (GOOGL), National Oilwell Varco Inc (NOV) and Perrigo Co PLC (PRGO).

Rolfe bought 1,739,291 shares of Qualcomm, a San Diego-based semiconductor company that designs and markets wireless telecommunications products and services, raising his stake by nearly 36%. Rolfe paid an average price per share of $76.50. It was the 16th consecutive quarter that Rolfe has bought Qualcomm stock, and it had a 2.1% impact on his portfolio.

03May20171255321493834132.png

Rolfe added 1,850,129 shares of Cognizant Technology Solutions, a New Jersey-based provider of custom information technology, consulting and business process outsourcing services, at an average price of $47.01, raising his stake in the company by 26%. It was the 15th of the last 16 quarters that Rolfe has invested in Cognizant Technology Solutions; the investment had a 1.34% impact on his portfolio.

03May20171255321493834132.png

He raised his holdings in LKQ, an auto parts supplier from Chicago, by nearly 55%. He bought 2,970,927 shares in the company at an average price of $26.9. The transaction had a 1.28% impact on his portfolio.

03May20171255331493834133.png

Sells

Rolfe sold all of his holdings in Now Inc (DNOW), a spinoff from National Oilwell Varco that provides pipe, valves and valve automation, fitting, mill and industrial supplies, tools, safety products and artificial list systems to the upstream, midstream and downstream and industrial markets. Rolfe sold all 478,947 shares he bought in the company in the previous quarter for an average price of $32.76, losing 13% of his investment.

03May20171255331493834133.png

He reduced his stake in Apple (AAPL), the world’s second-largest information technology company based in California, by 1,148,034 shares, which is about 19% of his holdings. Rolfe received an average price per share of $98.21, a gain of more than 16%.

03May20171255341493834134.png

Not a Premium Member of GuruFocus? Try it free for 7 days here!