Core Equity Portfolio Update: 15-May-2020

With the enormous price volatility experienced in the stock market over the past several months, we made several changes to the core equity portfolio.  Before we review some of these changes, we believe that a simple investment framework will help understand our logic, beginning with Benjamin Graham’s definition of investing: “An investment operation is one … Read more

Diageo PLC (DEO)

Similar to our recent portfolio position sales in Becton Dickinson (BDX) and Praxair (PX), we recently sold the last remaining Diageo exposure in our portfolio. With an enterprise value (EV) of $98 billion (equity market capitalization + debt – cash) and free cash flow (FCF) of $2.6 billion, Diageo is no longer remotely “cheap” at … Read more

Diageo PLC (DEO)

Although our estimate of fair value for Diageo has increased over the past several quarters, we still felt it was prudent to continue reducing our portfolio position in Diageo. The company’s stock jumped in July when the company reported earnings and surprised investors with stronger topline growth backed by an increase in both volume and pricing. … Read more

Core Equity Portfolio Changes

The level of cash within the Core Equity composite is a direct function of valuation.  As companies within the portfolio approach or exceed our current estimate of fair value, we reduce or eliminate the position. Ideally, there are existing opportunities within the current portfolio to recycle that capital or add new capital to existing positions. … Read more

Diageo PLC (DEO)

Diageo manufactures and distributes premium drinks. Its products include Scotch and Irish whiskey, gin, vodka, rum, and ready to drink products, as well as beer and spirits, Irish cream liqueur, wine, tequila, and Canadian and American whiskey. The company operates in approximately 180 countries worldwide. Diageo was founded in 1886 and is based in London, … Read more