- National Coronavirus response: a roadmap to reopening (here)
- 3 months of no EMI but why you should pay if you can (here)
- Outrage in Germany as Adidas and H&M stop rent payments (here)
- Planes will fly with new owners: NT urges UK to let Virgin Airlines go bust (here)
- The road back to normal (here)
- How Kotak Mahindra has averted all the crisis so far (here)
- The man who predicted the Indian banking crisis warns of a new danger (here)
- ITC – is capital misallocation a narrative fallacy or reality (here)
- My first decade as a full time investor (here)
- What clark street has been buying – Coronavirus edition (here)
The markets have been unforgiving in many different ways. Off late, the route the market has taken is to sell all risk and get into safer instruments. Entire sectors have been brushed with a broad stroke and left to bite the dust. One such sector is the NBFC sector. While opaque accounting, financial shenanigans and unconstrained lending in the name of growth has brought some well deserved nails on some coffins, there are others that have been dragged down by sheer association.
I believe that Shriram City Union Finance is one such case.
SCUF is a deposit taking NBFC that serves the predominantly in the south with a sizeable operations in the west of India as well. They serve the underbanked, specifically the self-salaried and MSME who get easier access to NBFC’s (shadow banking system) as compared to banks.
The security closed on March 27th at INR 765.35 / share on the NSE. The market cap is INR 5,332 crores with ~6.6 crores shares outstanding. The security has a book value of INR 1070 per share or INR 7,062 crores. First nine months earnings for 2019-20 were INR 128.38 per share or INR 845 crores. 2018-19 full year earnings were INR ~150 / share or 988 crores. AUM was 29K crores.
SCUF is earning around INR 43-44 per share per quarter and growing. The market is valuing the entire company at 4.5 times earnings or earnings yield of 22%. It will be worthwhile to take a look deeper into what might be driving the same. A quick snapshot of the financials is as seen below.
As you can see, the company has fairly good NIM, high spread, good ROA and ROE and fairly manageable leverage. Furthermore, CRAR seems to be good and decent cash on hand as well.
Since the company serves the self employed and small businesses, the GNPA and NNPA is higher than usual but the company has managed fairly well in the past on the actual write downs. SCUF has been conscious of the market it is serving and has managed with lower LTV ratios, stronger security, higher spreads and a good ecosystem to manage collections. The situation before Covid was as follows:
There are several factors that would have impacted the business or caused the valuations to drop.
- Covid impact and net payments
- Concerns on repayments
- Liquidity in the market
- AL mismatch and liquidity concerns
- Corporate governance
Covid Impact: It is very early to estimate the real impact of Covid. This could go several different ways but I think we can draw large enough boundaries and what the expected outcome could be for SCUF. Just because of the sheer segment that SCUF lends to, we should expect a lot of stress. The small businesses are on the first line that will get affected by Covid and the subsequent economical slowdown that comes along with it. There are broadly two lines of thoughts that investors are divided upon: one is that this will be a short disruption, everyone self isolates, the virus dies and we have a V-shaped recovery. The other narrative is that because of the exponential growth in the cases we have been having, it will be many quarters or years before it becomes business as usual again.
In the former case, there are two more tailwinds that are there: RBI has provided permission to defer payments for three months, interest will continue to accrue, and the effects of the virus will be short-lived. Even if we assume that the operating expenses of the company will not come down, it will cost the company INR 375 crores with no income to keep the shutters open and incur every single rupee to keep the shutter open. This will impact the business around INR 57 / share. One quarter of earnings lost. This is like losing a dividend check. With the NPA rule being waived, it is the best case scenario.
In the latter case, beyond the initial tailwind due to the deferral from RBI, if things deteriorate further, we could see customers falling behind on payments, GNPA and NNPA spiking up and write off spiking up as well. Given the P/B of 0.71 that is the market is attributing indicates that they expect this scenario to play out. The market is expecting a INR 1700 crore write off (as of today) from this episode or close to 6% of the entire book (net of assets recovered) as an outcome of this prolonged exposure in the market. The markets that provide us some advance information is the China and the South Korean market. Things are recovering back but at a slower pace. I think it is fair to assume at this point that the same may repeat in India as well. It will eventually recover but at a much slower pace than most people expect. A fair amount of this write-off is already baked into the price. Why will the write offs not be higher? We will address it in the repayments section.
Here we need to digress a bit to understand the culture of Shriram and why ultimate repayments are Shriram will be higher than what we would think in a conventional sense. Shriram group hires people from the same social standing and the communities as their customers. Since they were serving the underbanked, their offices are frugal as as possible and they speak the same layman language as that of the customer. Furthermore, they are connected to the customers at the place of business and are well versed with the balance sheets etc. The credit process is designed in a way that the branch manager, who is effectively connected to the community is responsible for the approvals and is also held very responsible for the collections as well. Typically, customers prefer to work with Shriram group in general because of two main reasons a. they had a connection with the branch manager and an existing relationship. The system and offices were designed in a way that it would not scare the customers and would make him feel like he was borrowing from someone just like himself. b. compared to a bank where they would have to wait for 45 days to get a loan sanctioned, with the right data, they could get a sanction within 48 hours at Shriram. Furthermore, most of the customers getting a loan from Shriram City already have a relationship with Shriram Transport or Chits or insurance or have an existing relationship with the branch with a manager. Coupled with the fact that most of the loans are with low LTV / higher security than required, incentives aligned with a branch manager who is responsible for collections and a connection to community, defaults are on the lower side than what one would expect from this clientele.
This ecosystem is not going to change anytime soon. While the clientele will be hit by Covid, it is fair to assume that the branch manager will work closely with the customers to figure out the best possible way to get repayments done. The last thing the branch manager or the customer wants is a security pulled in from someone in the community. This has been evidenced through low real losses through previous recessions. However, it must be clearly noted the repayments are different from reported NPA’s. It is safe to presume that GNPA’s and NPA’s / stage 2 and 3 assets will spike but ultimately will get repaid. The repayments will depend on the pace of recovery more than anything else.
Liquidity in the Market:
It is no secret that Piramal has been trying to pare his stake in Shriram for a while now to further boost capital at the Piramal group. There will be always be a hang over the stock that over 10% of the shares outstanding will trade. If Piramal decides to sell in the open market like they did with STFC, it will create a glut of liquidity pushing the prices further down. However, it does look highly unlikely something would happen at these prices. It is a good 33% lower than where Piramal took his stake and I just don’t see him selling at these prices. Furthermore, TPG is trying to exit SCUF parent company at Shriram City as well.
AL Mismatch and Liquidity concerns:
This will be a quick back of envelope calculation: If one assumes that Jan and Feb was business as usual at Shriram City, you will see that they would have excess liquidity of 5000 crores. This will need to be netted for disbursements that would have happened. If you use the prior quarter number, it is around INR 1900 crores per month. This would have left around 1200 crores in excess liquidity. Their cash balance was another 800 crores. Their scheduled repayments was ~2200 crores in March. With a collection efficiency of 10% in March, they could meet that. I am sure the number was a lot higher. Now with the NPA moratorium, I think it will provide some relief to Shriram repaying back its creditors as well. Over the 4 next months (which I think will be more like 6 months with the RBI moratorium), they will own around INR 5000 crores out of which they have access to 2000 crores; and receivables of INR 6,200 crores. If the collection efficiency is above 50%, their ALM will be fine over the next 6 months. However, one needs to account for the CET ratio and minimum cash they will need to maintain as per regulatory norms etc. If India does not get back to 50% of its efficiencies over the next 6 months, we are going to have much bigger problems. Given the current situation, I think they are sitting okay for now. Unless the situation deteriorates extremely badly, I think they will do okay. On top that, the conservative balance sheet will continue to have access to the capital markets. While the interest rates might wary, it is tough to imagine a balance sheet like Shriram city shut from capital markets.
Corporate Governance Concerns: I think between Shriram Capital, Transport Finance and City Union, the Shriram Group has shown a fair amount of good corporate governance till date. We have had RT leading the group, Ajay Piramal and there has not been a peep about governance. They have taken their lumps where needed and moved on. Nothing to indicate that minority holders are at an disadvantage at this point. We will need to see who will be at the helm once Piramal moves on.
All in all, while there are headwinds that SCUF is going to face, at ~22%+ earnings yield most of these concerns are baked in. Investors need margin of safety. The company is trading at 70% of liquidation value. They are yet to lose money in a single quarter. They have the ability and the cushion to lose money for a while and still be okay. The ecosystem is still firm and recovery will be on the back of companies like SCUF. It does provide an enterprising investor with a variety of possibilities.
I am interested in your thoughts and comments. please mail me: firstname.lastname@example.org
Disclosure: Long several NBFC’s and Banks including Piramal, SCUF, STFC.
Disclaimers: See FAQ here. Not a recommendation. Not a registered advisor. Just sharing my thoughts.
Most of us remember Li Lu, the man who bought the original BYD idea to Charlie Munger and then to Berkshire, as a value investor who was up significantly up in 2008/9 (without any shorts). He recently organised a number of doctors from China to share their experiences on fighting Covid on the frontlines. This included the ICU head in a hospital in Wuhan, a doctor who leading the effectiveness of various treatments, and head of an infectious disease in Shanghai.
- What we learnt from the Covid-19 outbreak in Wuhan here
- From bedside to bench: here
- Megacity and public health policy for Covid-19: here
Additional links here including videos, Q&A etc.
Liberty Sirius closed at $30.19 / share on March 27th. Its main asset is 3.2B shares of publicly traded Sirius XM (SIRI). Since the start of the year, the discount between SIRI and LSXMK has increased by close to 9 pts. (Courtesy: Yahoo Finance) Given the fact that LSXMK was trading at a discount at the beginning of the year, it is worthwhile to see the NAV discount that LSXMK is trading at.
The key to note before we dive into the NAV calculation is that LSXMK financials consolidates SIRI as it holds over 71% of the shares outstanding. This is from an accounting perspective. In reality though, SIRI operates as a separate public listed company and the debt / cash are non-recourse at this point to Liberty Sirius Group or the Liberty Media group. The other way to think about it, the debt and the cash held at SIRI is at an operating company level.
Taking that into consideration, the NAV calculation shows a significant discount to the underlying asset which can be valued using market listed securities.
There are four possibilities that could cause the discounts to be significant.
- The market is treating the SIRI debt as recourse to LSXMK and the given the higher level of debt at SIRI and deteriorating market conditions is discounting LSXMK further. This makes no sense because if that were the case, SIRI should be falling as well. Furthermore, SIRI’s FCF is good and the debt is at operating company level. This was shown clearly at the annual meeting. Furthermore, the churn during the last recession was actually much lower than people expect. It was in low single digit %.
- The market is assuming that given the drop in stock price, John Malone might pay a premium to buy Sirius completely. Given the disciplined nature of M&A that the Liberty complex has exhibited so far, that seems improbable.
- Ability to roll over debt in the near term (nothing alarming there)
- Since LSXMK is a tracking stock, the market has increased the discount considering the possibility of liquidation of entire Liberty Media complex with a deterioration for FWONK and BATRK. Currently, there is nothing that indicates that FWONK or BATRK is impacted to the point of liquidation that will demand a 35% haircut on NAV of LSXMK.
It seems to be a case of the market discounting tracking stocks in general a lot higher in this environment. Time will tell.
Any comments on what I could be missing is welcome. email@example.com
Disclosure: Long SIRI and action expected in Liberty Sirius
- As Coronavirus infection slows, South Korea prepared for life after social distancing (here)
- Bill Ackman clarifies on his CNBC comments (here)
- Where does the $2T in the U.S. stimulus bill go (here) from reddit
- Covid impact on restaurants in the U.S. (here) and (here)
- State by state shutdown won’t work – Bill Gates (here)
- Investing in healthcare: threat and opportunity of the decade ahead (here)
- Trump orders GM to make ventilators under the Defense Production Act (here)
- Miss the worst days, miss the best days (here)
- Corona, Cheesecake & testing the mirage of lease-debt equivalence (here)
- I became a disciplined investor over 40 years. The virus broke me in 40 days (here)
As value investors, a lot of us are starting to find the environment to be idea rich after a long time. Finally, the valuations are compelling, the companies we have researched are cheap, the war chest is ready to crack open, ready to be used. During such times, there are new risks that needs to be actively managed. While I watched the 2009 recession hunting for a job in the U.S, I did not live through the panic in the securities market during the recession of 2008/9. This is my first real test. There have been drawdowns in the past which have been sharp and never so deep.
One of the risks is through concentrated positions. A ton of wealth has been made through concentrated positions. 2-3 years from now, when the markets are back up (hopefully) there will be stories about investors who bought by the truckloads during the downturn and made a killing on some of the ideas. What won’t get said, are the ton of the people who got crushed during the downturn by investing in concentrated positions (2/3/4 positions) and the companies going to zero. Survivorship bias will exist in this regard. People recall Mike Burry a lot more than Bill Miller. It is highly preferable to give up some upside in order to reduce the chances of going back to Go on the board.
Here is where capital allocation and portfolio management go hand in hand. As much as tempting it is to back the truck into a certain securities and concentrate, a dose of diversification will prevent complete blow ups from happening. There are multiple ways this can be achieved. Buying a basket of stocks in a similar category, allocating a certain % to index funds, looking at preferred stocks, closed end funds, special situations etc. can provide other opportunities even in the securities space. Of course, this conversation here is limited to the securities space where we are finding bargains at this point. Other asset classes are not considered here.
Some of the steps that I am taking while managing through this downturn :
- Kept aside cash required to manage next 2-3 years + emergency cash even I were to lose my job.
- Had a clear plan written down on how portfolio management would happen in a 30-40% down market when I was clear and lucid.
- Diversifying more than usual while adding new bargains
- Baskets of stock in a similar story. Everything might not go to zero (unless my stock picking skills are similar to the CDO’s constructed by US banks a decade ago)
- Index funds / quasi index like Berkshire get a certain allocated % of the capital allotted
- The rules make is tougher and tougher to double down into the same ideas
I am very interested to see how this will pan out. While the ride has been painful, I am far from panicking yet. Just a pit in the stomach once in a while so far.
I have been looking at various securities this weekend to work on what is finally turning out to be an idea-rich environment. GCI Liberty, the sole cable provider in Alaska, was an interesting company to look at given that it belongs to the Malone complex. Amongst the dozens of securities and tracking stocks that the Liberty empire has, GLIBP (GCI Liberty Preferred) and GLIBA (GCI Liberty Common A) are two such securities.
GCI Liberty has always traded at a discount to the underlying Liberty broadband and Charter shares. I wanted to do a quick back of the envelope NAV calculation to see the level of discount and whether it would interest me among all the other opportunities on hand. Unfortunately, the discount using a fairly conservative approach turned out to be close to 20% and not much higher that I was expecting. Please note that the below NAV calculation aims to capture only the key components and is a rough guesstimate of the NAV.
However, the cumulative, non-convertible preferred stock trading at $22.25 with a 7% coupon (payable in 4 quarterly payments) with a $25 liquidation value callable after 2021 with a yield of 8.71% is mildly more interesting play with the common equity providing the cushion required for the dividend payments.
Update: To reflect the cash on the balance sheet. Thanks to Rocco for pointing it out.
Piramal closed on March 20th at a market price of INR 684 with a market cap of INR 15.4K crores. The shares outstanding as of Dec 31st was 20.45 crores with a dividend yield of 4%. Given the fall from grace the stock price has experienced, it will be worthwhile to examine both the liability side and the asset side and summarise what we know.
- Company capitalisation and access to capital: A classic example of this was Yes Bank where they struggled to raise capital and the bad loans soured and the RBI stepped in. However, that is not the case with Piramal. With the recent cap raise and the sale of DRG, the net worth is estimated to be close to 34K crores or INR 1382 / share.
- DRG: Clarivate has confirmed that is has closed the DRG for $950M with a payment of $900M to Piramal Enterprises which amounts to close to INR 6K crores. You can see the link of Clarivate’s SEC filing here on March 2nd. We can safely assume that this INR 6K crores is available to Piramal for now. This is approximately 39% of the market cap of the company as of March 21st.
- The rights issue for INR 5,400 crores that the company executed in Jan was fully subscribed and the company has received the proceeds. It is important to note that the promoters of the company fully participated in the rights issue. This is another 35% of the market cap of the company.
- Less than 9 months ago, the company sold its stake in STFC for 2,300 crores.
- It is clear that the company has had access to liquidity from the stake sales very close to the market cap of the company today.
- In addition, the company has announced the monetisation of the Shriram stake, which is estimated to bring 7-8K crores into the coffers. However, it needs to be seen whether with the economy further deteriorating drastically and the Covid impact whether the Sep timeframe given by the management holds good.
- Furthermore, the company has announced that they are considering a stake sale of 20% in the Pharma business and the proceeds here will fund the further growth of Pharma and will ensure that any incremental capital is available for the financial services business.
- The company needs to have the ability to roll over the debt or repay the debt over the next few months to a year while the economy suffers from both a prolonged real estate crisis and the impact of Covid.
- The company has moved from reliance on commercial paper and reduced the exposure from 18K crores 18 months ago to negligible amount as of Dec 2019.
- It has gone into longer term bank debt and bank funding has increased from 49% to 67% of the total borrowings. (See appendix A for points 2. and 3.)
- Recently, the company has accessed 1,900 crores at 9% per annum which provides further comfort that the cost of funding is coming down.
- What is even more important in my opinion is that the banks have had access to the books and have examined closely the assets of the book before lending to Piramal. This was confirmed by the management during one of the recent conference calls on March 12th. (Appendix B)
- The other thing that NBFC’s have to worry about is the ALM mis-match. Appendix 3 shows that close to 17K crores outflow is expected up to the next 12 months. Given the fact that they have close to 4.5K crores cash, Pharma generating proforma 1.5K crore operating cash flow over 12 months, capital raise and access to cash, high CAR of 32% before considering any payments coming from projects being refinanced or closed or the book run down, there should be a fair amount of comfort that the company will be fine in the next 12 months.
Asset Quality: The wholesale financing book is what seems to have scared the investors the most.
- The total finance loan book is INR ~51K crores. Housing finance is 6K crores, commercial real estate is 11K crores, CPG and ECL is 9K crores and the big chunk which is the residential real estate is 25K crores.
- So far, the company has reported only 1.8% GNPA and 1000 crores of provisioning so far. Again, given the recent experience with Yes Bank, the investors are being wary of companies that have exposure to stressed sectors but reporting very little GNPA and defaults.
- Firstly, it must be noted that, Piramal did not have any exposure to Yes Bank, Altico, IL&FS, DHFL, ADAG etc. which have gone bust. The fact that the company has dodged exposure to these stressed accounts indicate a certain level of quality of the book. Unlike Yes Bank, which had exposure to every stressed asset, Piramal seems to have dodged the bullet so far.
- In the housing finance segment, there is speculation that the government might provide some relief to MSME and non-salaried people towards EMI’s to help through the Covid situation. Hopefully, they will provide extended DPD guidelines to NBFC’s as well. Even if not, the GNPA’s might spike up. Unless Covid paralyses the economy over the next 6-12 months and things don’t get back to normal, the risk in the actual underlying defaults will be negligible. It must also be noted that the company has stressed multiple times that it is providing adequate LTV and security provisions in its loan book.
- The commercial real estate has not seen much stress in the last 2-3 years. Unless something new comes up as part of Covid and extended significant delays in construction, it would be fair to say that the commercial book will be fine.
- The corporate lending groups with its 9K crore book will see stress. We know that the Delhi Baroda truck financing with exposure of INR 75 crores is stressed. The Essel exposure from Piramal is close to INR 200 crores now. We should clearly expect to see more slippages from this and the GNPA shoot up over the next few months.
- The real estate wholesale financing segment is 25K crores. Piramal has run down close to 10K crores of the this segment over the last 18 months. The number of developers who were more than 15% of the net worth of the company has come down to 4 to 1. The one is Lodha.
- Lodha will have a INR 2500 crore exposure to Piramal by April. A couple of positive developments. In the recent call, it was clarified that the capital under security for this loan is close to INR 6000 crores (Appendix D) Finished goods inventory is close to INR 2300 crores with another INR 1000 crores completing over the next 3 months. In addition, Lodha just tapped the capital markets to refinance and repay bonds. See link here. In addition, the last 12 months sales for Lodha was close to 7000 crores and continues to the largest real estate developer in India. While the current Covid shutdown and the resulting economic bumps might stagger payments, it is highly unlikely that Piramal will need to take a write down on Lodha.
- In addition, it is worth noting that some of the accounts that Piramal has in stage 3 assets, they are moving to get the title of the lands and recover the loan. Easier said than done but the company has demonstrated that they can execute such moves well in the past.
- So far, the company has demonstrated that is can manage the risk and the recoveries from customers that it is lending to, have a low LTV ratio and a better than average risk monitoring system.
- It must be noted that no way does this mean that the loan book won’t sour in the near future or the stage 2/3 provisions will need to go up and more money needs to be set aside for provisioning, all we get comfort from is that the fact the management seems to have demonstrated reasonably well that it can manage the risk it is taking on.
Management: Understated in the market is what I call the Say-Do ratio of the management. Lots of companies make promises but it is execution that matters. Contrast the equity raising by both Yes Bank and Piramal around the same timeframe and the results each of them has had.
- Raising of capital through rights sale
- Completing the promise of bring in 8-10K crore equity into the business
- Reducing reliance on commercial paper. The management laid out the roadmap 12 months ago.
- Reducing reliance on exposure to single borrower names
- Piramal has put balance sheet strength over sheer growth reversing the earlier stance.
- The only con that I can direct to the management is the fact that they did not build a Fort Knox balance sheet from the start and had to go through several stake sales, cap raises (albeit at a premium to today’s stock price) to build a solid balance sheet. However, the management has shown that it will learn and correct mistakes quickly.
Unless it comes to light that the management is completely fraudulent, it is reasonable to assume that Piramal will weather the storm.
- The December end shares outstanding was: 20.5 crores. With INR 5,400 crores coming in at INR 1,300; approx. 4.2 more shares would be added. The total new shareholding will be at 24.6-24.7 crore shares.
- Total net worth at INR 34K crores or 1,382 per share and CMP is at 684 or 0.5 P/B.
- Total borrowings are at 50K crores.
- Enterprise value is at 64K crores: 50K borrowings + 14K market cap.
- SOTP would be as follows (following Dec 2019):
- Shriram stake – INR 6-8K Crores
- DRG Cash – INR 6K Crores
- Rights issue – INR 5.4K Crores
- Commercial RE – INR 11 K Crores
- Housing Finance – INR 6K crores
- Pharma business – INR 15K Crores (@ 10X EV/EBITDA)
- Cash – INR 4.5K Crores.
- Sub-total of assets before residential RE and CPG/ECL assets is approx. INR 56K crores.
- The market is today valuing the INR 34K crores worth of assets at less than INR 10K Crores. It can also be reasonably shown that the INR 2.5K Crores to Lodha is reasonably safe. So, the market is valuing close to INR 31K crores of others at INR 7.5K crores.
- Depending on the risk appetite of the investor, it will open up interesting possibilities.
I am interested in your thoughts and comments. please mail me: firstname.lastname@example.org
Disclosure: Long several NBFC’s and Banks including Piramal.
Disclaimers: See FAQ here. Not a recommendation. Not a registered advisor. Just sharing my thoughts.
Reposting with edits as the prior post is not updating online.
Markel (MKL) closed at $785/share as of March 20th. Since the reported book value of MKL was $802 as of Dec 31st, I wanted to look into the equity portfolio of $MKL and see the effect on its book value. At the closing price of $1,143 on Dec 31st, MKL traded at a P/B of 1.42.
Given the carnage in the market, the equity value of its U.S listed stocks are down from $7.2B to $4.95B (see below) which is 31% below 12/2019. Of course, there is a possibility that Markel could have sold stocks before the meltdown or could have increased the equity holdings materially but neither will be known at least until early May.
With 13.7M shares outstanding as of 31/12, the book value change just from marking the equity book to market would be $162/share. Adjusting for this, the book value for Markel would be ~$640/share. Markel also has deferred taxes of $996M related to investments. This translates to $72/share. At the corporate tax rate of 21.2% (2019 rate) Markel can offset about $34/share of the equity price decline resulting in a book value of $674/share. The new price/book will be 1.16. This is definitely more cheaper than 31/12.
At this point, it is also not clear whether the insurance operation will take any hit due to any exposure to Covid as well. While Markel does trade much cheaper than it has for a long time, it is far from trading below book value like it did very briefly when the acquisition of Alterra was announced.
Disclosure: Long Markel.
Thanks for @rationalwalk for pointing out the deferred taxes.
|Stock||Value as of 31/12||Price on March 20th||Portfolio Value|
|KMX – CarMax Inc.||$430,729,000||$44.27||$217,501,608.90|
|BRK.A – Berkshire Hathaway CL A||$375,247,000||$257,346.00||$284,367,330.00|
|BRK.B – Berkshire Hathaway CL B||$345,720,000||$170.06||$259,572,271.42|
|BAM – Brookfield Asset Management Inc.||$334,930,000||$38.65||$223,962,874.65|
|DIS – Walt Disney Co.||$268,206,000||$85.98||$159,443,891.40|
|MAR – Marriott Int’l.||$240,057,000||$74.58||$118,229,362.02|
|DEO – Diageo plc||$227,333,000||$109.56||$147,884,088.00|
|HD – Home Depot||$200,909,000||$152.15||$139,978,000.00|
|GOOG – Alphabet Inc. CL C||$181,244,000||$1,072.32||$145,361,554.56|
|AMZN – Amazon Corp.||$180,963,000||$1,846.09||$180,791,285.88|
|V – Visa Inc.||$179,472,000||$146.83||$140,244,674.50|
|UNH – United Health Group Inc.||$176,094,000||$206.59||$123,747,410.00|
|DE – Deere & Co.||$174,282,000||$111.63||$112,288,617.00|
|WBA – Walgreens Boots Alliance||$121,310,000||$46.42||$95,509,150.00|
|BLK – BlackRock Inc.||$110,594,000||$354.72||$78,038,400.00|
|RLI – RLI Corp.||$107,779,000||$73.63||$88,155,137.36|
|ADI – Analog Devices||$101,705,000||$85.08||$72,812,399.88|
|TXN – Texas Instruments||$91,663,000||$97.60||$69,735,200.00|
|ADP – Automatic Data Processing Inc.||$90,484,000||$112.06||$59,470,242.00|
|JNJ – Johnson & Johnson||$89,097,000||$119.89||$73,228,812.00|
|AAPL – Apple Inc.||$88,105,000||$229.24||$68,780,023.40|
|UL – Unilever PLC||$87,333,000||$47.17||$72,056,892.00|
|GS – Goldman Sachs Group||$78,613,000||$138.41||$47,322,379.00|
|MSFT – Microsoft Corp.||$74,847,000||$137.35||$65,189,057.00|
|LOW – Lowe’s Cos.||$69,580,000||$66.36||$38,555,160.00|
|WSO – Watsco Inc.||$69,808,000||$145.71||$56,462,625.00|
|BX – The Blackstone Group||$68,415,000||$37.67||$46,070,410.00|
|GD – General Dynamics||$68,247,000||$113.99||$44,114,130.00|
|ADM – Archer-Daniels-Midland||$67,824,000||$30.61||$44,791,613.00|
|ANTM – Anthem Inc.||$67,655,000||$191.59||$42,916,160.00|
|MMC – Marsh & McLennan||$67,905,000||$79.87||$48,680,765.00|
|NVO – Novo Nordisk A S||$62,221,000||$49.46||$53,169,500.00|
|MA – Mastercard Inc.||$61,465,000||$211.42||$43,520,807.00|
|AXP – American Express||$59,911,000||$74.12||$35,670,250.00|
|ECL – Ecolab Inc.||$59,113,000||$141.88||$43,457,844.00|
|ITW – Illinois Tool Works||$57,302,000||$125.78||$40,123,820.00|
|BF.A – BROWN FORMAN Inc. A||$52,916,000||$45.94||$38,727,420.00|
|SCHW – Charles Schwab||$51,493,000||$30.75||$33,293,025.00|
|MCO – Moody’s Corp.||$49,804,000||$175.80||$36,879,324.00|
|APO – Apollo Global Management||$48,306,000||$26.84||$27,175,500.00|
|PGR – Progressive Corp.||$46,329,000||$68.28||$43,699,200.00|
|SBUX – Starbucks Corp.||$45,689,000||$58.03||$30,156,334.04|
|NSC – Norfolk Southern Corp.||$44,552,000||$123.71||$28,391,445.00|
|SMG – Scotts Miracle-Gro Co.||$44,808,000||$83.53||$35,249,660.00|
|TRV – Travelers Companies Inc.||$43,139,000||$89.51||$28,195,650.00|
|CAT – Caterpillar Inc.||$41,941,000||$95.50||$27,122,000.00|
|CFX – Colfax Corp.||$41,294,000||$16.40||$18,615,148.00|
|MMM – 3M Co.||$40,312,000||$124.89||$28,537,365.00|
|SPGI – S&P Global Inc.||$40,138,000||$208.79||$30,692,130.00|
|KKR – KKR & Co. L.P.||$39,838,000||$19.07||$26,043,899.00|
|CG – Carlyle Group||$38,817,000||$19.39||$23,461,900.00|
|WHR – Whirlpool Corp.||$38,733,000||$74.45||$19,546,028.55|
|HAS – Hasbro Inc.||$38,442,000||$46.10||$16,780,400.00|
|TROW – T. Rowe Price Group||$38,258,000||$90.34||$28,366,760.00|
|NKE – NIKE Inc.||$37,079,000||$67.45||$24,686,700.00|
|SRCL – Stericycle Inc.||$36,244,000||$44.68||$25,378,240.00|
|MHK – Mohawk Industries||$35,595,000||$58.66||$15,310,260.00|
|MSCI – MSCI Inc.||$35,370,000||$243.07||$33,300,590.00|
|LYV – Live Nation Inc.||$34,927,000||$33.97||$16,601,139.00|
|ACN – Accenture||$33,565,000||$149.94||$23,900,436.00|
|ITIC – Investors Title Co.||$33,957,000||$110.90||$23,654,970.00|
|UTX – United Technologies||$33,546,000||$82.53||$18,486,720.00|
|BF.B – Brown-Forman Corp.||$32,055,000||$48.85||$23,164,034.95|
|TSN – Tyson Foods||$32,365,000||$53.62||$19,061,910.00|
|NVR – NVR Inc.||$31,819,000||$2,326.89||$19,441,165.95|
|BA – Boeing Co.||$30,752,000||$95.01||$8,968,944.00|
|FDS – FactSet Research Systems||$31,273,000||$217.98||$25,407,748.80|
|HEI – HEICO Corp.||$30,588,000||$70.20||$23,983,408.80|
|JPM – JPMorgan Chase & Co.||$30,066,000||$83.50||$18,009,280.00|
|FB – Facebook Inc.||$29,390,000||$149.83||$21,454,157.70|
|ROK – Rockwell Automation Inc.||$28,394,000||$126.89||$17,777,289.00|
|ROL – Rollins Inc.||$27,169,000||$35.00||$28,677,250.00|
|LUV – Southwest Airlines||$26,478,000||$31.94||$15,666,570.00|
|LBRDA – Liberty Broadband Corp. CL A||$25,566,000||$87.38||$17,934,745.00|
|LSXMK – Liberty SiriusXM Series C||$25,129,000||$25.48||$13,300,560.00|
|SEIC – SEI Investments||$25,092,000||$38.56||$14,776,192.00|
|CVS – CVS Health Corp.||$24,665,000||$54.70||$18,160,400.00|
|DAL – Delta Air Lines Inc.||$24,386,000||$21.35||$8,902,950.00|
|PH – Parker-Hannifin||$24,411,000||$102.43||$12,148,198.00|
|CMCSA – Comcast Corp.||$23,429,000||$33.37||$17,385,770.00|
|LBRDK – Liberty Broadband Corp. CL C||$21,643,000||$90.67||$15,605,485.71|
|CHH – Choice Hotels Int. Inc.||$20,996,000||$57.67||$11,707,010.00|
|LSXMA – Liberty Sirius XM Series A||$20,593,000||$25.33||$10,790,580.00|
|LNAGF – Linde AG||$20,098,000||$151.30||$14,282,720.00|
|PEP – PepsiCo Inc.||$19,899,000||$103.93||$15,132,208.00|
|SHW – Sherwin-Williams||$18,090,000||$412.70||$12,793,700.00|
|ATVI – Activision Blizzard Inc.||$16,685,000||$52.05||$14,615,640.00|
|CSCO – Cisco Systems||$16,402,000||$35.60||$12,175,200.00|
|GOOGL – Alphabet Inc.||$16,742,000||$1,068.21||$13,352,625.00|
|MCHP – Microchip Technology||$16,651,000||$59.64||$9,482,760.00|
|MXIM – Maxim Integrated Products||$15,501,000||$44.12||$11,118,240.00|
|EFX – Equifax Inc.||$15,063,000||$105.65||$11,357,375.00|
|UNP – Union Pacific||$15,434,000||$117.84||$10,060,000.80|
|HCSG – Healthcare Services Group||$13,947,000||$21.58||$12,376,130.00|
|HXL – Hexcel Corp.||$13,489,000||$32.01||$5,889,840.00|
|IFF – International Flav/Frag||$13,676,000||$102.41||$10,855,460.00|
|BK – Bank of New York Mellon Corp.||$12,784,000||$29.07||$7,383,780.00|
|EA – Electronic Arts||$13,159,000||$86.94||$10,641,456.00|
|PAYX – Paychex Inc.||$12,759,000||$51.97||$7,795,500.00|
|FWONK – Liberty Media Corp Formula One Series C||$11,929,000||$23.00||$5,968,500.00|
|COST – Costco Co.||$11,507,000||$290.42||$11,369,943.00|
|DLTR – Dollar Tree Inc.||$11,578,000||$75.97||$9,351,907.00|
|AMT – American Tower Corp.||$11,078,000||$195.39||$9,417,798.00|
|VRSK – Verisk Analytics Inc.||$11,051,000||$124.25||$9,194,500.00|
|FWONA – Liberty Media Corp Formula One Series A||$10,048,000||$20.85||$4,785,075.00|
|PM – Philip Morris Intl.||$9,743,000||$61.09||$6,994,805.00|
|CDK – CDK Global Inc.||$9,673,000||$30.98||$5,480,269.06|
|WFC – Wells Fargo||$9,415,000||$26.50||$4,637,500.00|
|MCK – McKesson Corp.||$8,728,000||$124.97||$7,885,607.00|
|AON – Aon Corp.||$7,707,000||$149.55||$5,533,350.00|
|CABO – Cable ONE Inc.||$7,740,000||$1,270.76||$6,607,952.00|
|CCK – Crown Holdings||$8,124,000||$46.96||$5,259,520.00|
|TRU – TransUnion||$7,448,000||$54.98||$4,783,260.00|
|ALB – Albemarle Corp.||$5,332,000||$53.43||$3,900,390.00|
|LBTYA – Liberty Global Inc.||$4,070,000||$17.63||$3,155,770.00|
|OI – O-I Glass Inc.||$4,175,000||$5.67||$1,984,500.00|
|TRUP – Trupanion Inc.||$4,120,000||$23.84||$2,622,400.00|
|DISCA – Discovery Communications Inc.||$3,567,000||$18.76||$2,194,920.00|
|GHC – Graham Holdings Co.||$3,323,000||$317.12||$1,649,024.00|
|PAG – Penske Automotive Group||$3,615,000||$22.09||$1,590,480.00|
|Y – Alleghany Corp.||$3,461,000||$467.71||$2,024,248.88|
|BLL – Ball Corp.||$2,716,000||$54.89||$2,305,380.00|
|AN – AutoNation Inc.||$2,120,000||$26.50||$1,155,665.00|
|KHC – Kraft Heinz Co.||$2,185,000||$22.28||$1,515,040.00|
|WRB – W.R. Berkley Corp.||$1,866,000||$47.58||$1,284,660.00|
|C – Citigroup Inc.||$1,623,000||$38.06||$773,379.20|
|DHI – D.R. Horton||$1,654,000||$31.38||$983,668.86|
|SHAK – Shake Shack Inc.||$1,799,000||$34.78||$1,050,356.00|
|BKNG – Booking Holdings Inc.||$411,000||$1,177.43||$235,486.00|
|BUD – Anheuser-Busch InBev||$1,067,000||$40.30||$523,900.00|
|LEN.B – Lennar Corp. CL B||$1,075,000||$25.28||$607,984.00|
|IAC – IAC/InterActive Corp.||$286,000||$130.75||$150,362.50|
|ILMN – Illumina Inc.||$332,000||$242.00||$242,000.00|
|LEN – Lennar Corp.||$329,000||$34.08||$201,072.00|