This article is part of a series that provides an ongoing analysis of the changes made to Generation Investment Management’s 13F portfolio on a quarterly basis. It is based on Al Gore’s regulatory 13F Form filed on 08/14/2020. Please visit our Tracking Al Gore’s Generation Investment Management Portfolio series to get an idea of their investment philosophy and our previous update for the fund’s moves in Q1 2020.
This quarter, Al Gore’s 13F portfolio value increased ~23% from $14.09B to $17.34B. The number of positions decreased from 41 to 39. The top five stakes are Alphabet (NASDAQ:GOOG), Cognizant Technology (CTSH), Baxter International (BAX), Charles Schwab (SCHW), and Dentsply Sirona (XRAY). They account for around ~28% of the total 13F portfolio value. Generation Investment Management’s whitepapers and Al Gore’s books are good precursors for anyone interested in investing based on sustainability analysis.
New Stakes:
None.
Stake Disposals:
Nvidia Corp. (NVDA) and SPDR Trust (SPY): These minutely small (less than ~0.1% of the portfolio each) positions were disposed this quarter.
Stake Increases:
Cognizant Technology: The large (top three) 5.27% of the portfolio CTSH stake was purchased in Q2 2019 at prices between $57 and $75. There was a ~42% stake increase over the next two quarters at prices between $58.75 and $66.50. The stock currently trades at $65.59. The last two quarters have seen a minor increase.
Baxter International: BAX is a large (top three) 5.27% of the portfolio stake established in Q4 2019 at prices between $76.50 and $88.50 and increased by ~50% last quarter at prices between ~$72 and ~$93. The stock currently trades at $81.29. This quarter saw a ~4% stake increase.
Dentsply Sirona: XRAY is a large (top five) ~5% portfolio stake built in 2014 at prices between $44 and $56. The position has wavered. Recent activity follows: Q1 2018 saw an ~18% stake increase and that was followed with a ~65% increase next quarter at prices between $42 and $51. Q3 2018 saw another ~25% increase at prices between $37.50 and $48.50. The stock currently trades at ~$43.67. Q2 2019 saw a ~20% selling at prices between $49 and $59 while last quarter there was a ~15% stake increase at prices between ~$32 and $61. This quarter saw a ~4% stake increase.
Note: Generation IM has an ~8% ownership stake in Dentsply Sirona.
Henry Schein (HSIC): HSIC became the largest position in Q4 2017 as it saw a ~550% increase at prices between $50.50 and $68.50. There was another ~22% increase next quarter at prices between $47 and $63.50. The five quarters through Q3 2019 saw a combined ~30% reduction at prices between $58 and $71 while last quarter there was a similar increase at prices between ~$43 and ~$74. The stock is now at $63.74 and the stake at ~4.51% of the portfolio. Generation IM has a ~9% ownership stake in Henry Schein. There was a marginal increase this quarter.
Note: The prices quoted above are adjusted for the spinoff of Covetrus Inc. last January. Also, HSIC split 2-for-1 in September 2017.
Palo Alto Networks (PANW), Gartner Inc. (IT), and Trimble Inc. (TRMB): These medium-sized positions established last quarter saw increases this quarter. PANW is a 4.42% of the portfolio stake purchased at prices between ~$133 and ~$250 and increased by one-third this quarter at prices between ~$163 and ~$240. The stock currently trades at ~$234. The 3.53% of the portfolio IT stake was established at prices between ~$83 and ~$164. This quarter saw a ~27% stake increase at prices between ~$92 and ~$138. It is now at ~$129. TRMB is 2.86% of the portfolio position purchased at prices between ~$21 and ~$46 and it currently goes for $49.14. There was a marginal increase this quarter.
TE Connectivity (TEL): TEL is a medium-sized 3.93% position purchased in Q4 2018 at prices between $71 and $87. Q4 2019 saw an ~18% stake increase at prices between $85.50 and $96 and that was followed with a ~40% increase last quarter at prices between $53 and $100. The stock currently trades at $95.40. This quarter also saw an ~11% increase.
Becton Dickinson (BDX): The 3.56% BDX position was built last quarter at prices between $201 and $286. This quarter saw a ~50% stake increase at prices between $225 and $270. The stock currently trades at ~$234.
Aptiv plc (APTV) previously Delphi Automotive: APTV is a 3.28% position. It was first purchased in Q4 2016 at prices between $46 and $55. The stake has wavered. Recent activity follows: Q1 2019 saw a ~40% stake increase at prices between $60.50 and $82.50 and that was followed with another one-third increase next quarter at prices between $64 and $91. There was a ~15% stake increase last quarter at prices between $33.50 and $96. The stock currently trades at $84.66. This quarter saw a ~7% further increase.
Note: The prices quoted above are adjusted for the Delphi Technologies spinoff in November 2017.
Cooper Companies (COO): The bulk of the 3.27% position in COO was purchased in Q4 2016 at prices between $159 and $183. The original stake was doubled in Q1 2018 at prices between $218 and $251 and that was followed with a ~37% increase next quarter at prices between $218 and $237. The stock currently trades well above those ranges at ~$318. The first three quarters of last year had seen a ~53% selling at prices between $246 and $342. The last two quarters have seen a one-third stake increase at prices between $243 and $360.
Jones Lang LaSalle Inc. (JLL): JLL is a 2.91% long-term position first purchased in 2008. By 2013, that original position was doubled to a fairly large ~5% stake through consistent buying every year. The next two years saw selling: ~75% overall reduction at prices between $103 and $178. The pattern reversed in 2016: ~500% increase at prices between $91 and $141. That was followed with a ~30% increase in Q2 2017 at prices between $103 and $125. Since then, the activity has been minor. The stock currently trades at ~$101.
Note: Generation IM has a ~9% ownership stake in Jones Lang LaSalle.
Sensata Technologies (ST): The bulk of the 2.65% ST position was purchased in Q2 2016 at prices between $33.50 and $39 and doubled over the next two years at higher prices. Q4 2018 also saw a ~28% increase at prices between $41 and $49.50. The last six quarters have seen only minor adjustments. The stock currently goes for ~$41.
Note: Generation IM has a ~7% ownership stake in Sensata Technologies NV.
Nutanix (NTNX): NTNX is a 2.11% position established in Q2 2019 at prices between $24.50 and $43.50 and it is now near the low end of that range at ~$25. The last few quarters have seen only minor adjustments. Generation IM has an ~8% ownership stake in Nutanix.
Analog Devices (ADI): ADI position is now at ~2% of the portfolio. It was established in Q2 2018 at prices between $87 and $102 and doubled next quarter at prices between $91 and $100. Q4 2018 saw another ~25% stake increase at prices between $78 and $94. There was a ~50% selling in Q2 2019 at prices between $96 and $117 and that was followed with a similar reduction over the next two quarters at prices between $104 and $125. The stock currently trades at ~$113. The last two quarters have seen only minor adjustments.
Trane Technologies plc (TT) previously Ingersoll-Rand plc: TT was a 1.71% portfolio position first purchased in 2015 at prices between $51 and $71. The position had wavered. Recent activity follows: 2019 saw a ~27% selling at prices between $93 and $135. Last quarter saw another ~18% reduction at prices between ~$71 and ~$147. The stock is now at $116. There was a ~63% stake increase this quarter at prices between $77 and $102.
A. O. Smith (AOS), Acuity Brands (AYI), Applied Materials (AMAT), CBRE Group (CBRE), Microsoft Corporation (MSFT), Penumbra Inc. (PEN), Stericycle Inc. (SRCL), Varian Medical Systems (VAR), Waters Corp. (WAT), and Workday Inc. (WDAY): These small (less than ~2.5% of the portfolio each) positions were increased this quarter.
Note: Generation IM controls ~6% of AYI.
Stake Decreases:
Alphabet Inc.: GOOG is currently the largest position at 7.34% of the portfolio. The bulk of the stake was established in the three quarters through Q1 2019 at prices between $975 and $1268. Q2 and Q3 2019 had also seen a ~45% stake increase at prices between $1110 and $1250. The stock currently trades at ~$1524. The last three quarters have seen a combined ~23% reduction.
Charles Schwab: SCHW is a large (top five) ~5% portfolio position. The stake is from Q4 2016 at prices between $31 and $40.50. Q2 2017 saw a two-thirds increase at prices between $37.50 and $43 and that was followed with a ~40% increase in the following quarter at around the same price range. The last six quarters had also seen a ~180% stake increase at prices between ~$30 and ~$50. The stock is now at $34.65. There was an ~18% reduction this quarter at prices between ~$32 and ~$43.
Note: SCHW has seen a previous round-trip. A large ~7.2M share stake purchased in 2013 in the high-teens price range was disposed the following year at much higher prices.
Thermo Fisher Scientific (TMO): TMO is a 3.44% portfolio position first purchased in Q3 2016 and more than doubled the following quarter at prices between $141 and $159. Q2 2017 saw another ~20% increase at prices between $152 and $176. There was a one-third selling last year at prices between $221 and $327. The stock currently goes for ~$112. The last two quarters have seen another ~20% selling at prices between $82 and $110.
Texas Instruments (TXN): The vast majority of the 3.41% TXN stake was purchased in Q4 2018 at prices between $88 and $109. The stock currently trades at ~$136. The last four quarters have seen a combined ~19% selling.
Illumina Inc. (ILMN): ILMN is a 2.53% of the portfolio position purchased in Q4 2019 at prices between $288 and $336 and increased by ~185% last quarter at prices between $209 and $336. The stock is now at ~$341. There was a ~30% selling this quarter at prices between $257 and $373.
MercadoLibre (MELI): The ~2% MELI stake was established in Q2 2018 at prices between $285 and $356 and it now goes for ~$1023. The four quarters through Q3 2019 had seen a ~42% selling at prices between $285 and $690. There was another similar reduction this quarter at prices between $447 and $986. Generation IM is harvesting gains.
Note: MELI had a previous round-trip: it was a very small 0.51% stake established in Q4 2017 at prices between $222 and $329 and disposed next quarter at prices between $315 and $414.
Equifax Inc. (EFX): The 1.88% EFX stake was purchased in Q1 2019 at prices between $91 and $115 and the stock currently trades well above that range at ~$164. Q2 2019 saw a ~27% stake increase at prices between $116 and $136 while next quarter there was similar selling at prices between $135 and $147. The last two quarters saw another ~20% reduction.
Cerner Corporation (CERN): CERN is a 1.82% of the portfolio position. The stake was established in 2015 and doubled in Q1 2016 at prices between $52 and $60. Q4 2016 also saw another ~50% stake increase at prices between $47 and $62. There was a ~37% selling in Q4 2017 at prices between $64.50 and $73.50 and that was followed with a one-third reduction next quarter at prices between $56.50 and $73. The four quarters through Q3 2019 had also seen a ~60% selling at prices between $49 and $76. Q4 2019 saw an about-turn: ~50% stake increase at prices between $65 and $73.50 and that was followed with a ~15% stake increase last quarter. The stock currently trades at ~$70. This quarter saw a ~12% trimming.
Salesforce.com (CRM): The original CRM stake was established in 2016 at prices between $60 and $84. Q3 2019 saw a stake doubling at prices between $140 and $160. The stock currently trades at ~$241 and the stake is at 1.37% of the portfolio. The last two quarters saw a ~50% selling at prices between $124 and $193.
Twilio Inc. (TWLO): TWLO is a 1.20% of the portfolio stake established in Q3 2019 at prices between $107 and $150 and increased by ~260% next quarter at prices between $91 and $117. The stock currently trades at ~$226. The last two quarters saw a ~72% reduction at prices between ~$72 and $228.
Huazhu Group (HTHT) and Microchip Technology (MCHP): These minutely small (less than ~0.25% of the portfolio each) stakes were decreased during the quarter.
Kept Steady:
Taiwan Semi (TSM): The minutely small 0.02% stake in TSM was kept steady this quarter.
Below is a spreadsheet that highlights the changes to Al Gore’s Generation Investment Management 13F stock portfolio as of Q2 2020:
Disclosure: I am/we are long GOOGL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.