The Goodhaven Fund (GOODX) is a mutual fund run and managed by Florida-based investment advisory company Goodhaven Capital Management. In its latest annual report, Goodhaven’s fund managers elaborated on the reasons behind the fund’s remarkable performance last year and have shared their views on the financial markets going forward. Among other things, the fund managers mentioned the sharp recovery in oil, gas and metals last year as one of the prime reasons why Goodhaven Fund managed to post 20.13% in the first 11 months of 2016.
Although last year was terrific, Goodhaven has grossly underperformed the S&P 500 since its inception (April 1, 2011) by generating a meager annual return of 4.71% against the 11.71% gains posted by the Index. Currently, the fund manages assets worth in excess of $270 million and is trading up 1% year-to-date. In this post, we are going to take a look at Goodhaven’s five largest U.S. equity holdings at the end of 2016 and will discuss what the fund’s managers think about these stocks.
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#5 Alphabet Inc (NASDAQ:GOOG)
– Shares Held By Goodhaven Capital Management (as of December 31): 17,482
– Value of The Holding (as of December 31): $13.49 Million
Let’s start with Alphabet Inc (NASDAQ:GOOG) in which Goodhaven Capital Management reduced its stake by 12% during the fourth quarter. In their letter, the fund managers mentioned that Alphabet Inc (NASDAQ:GOOG) continues to grow at a staggering rate and despite the stock being no longer cheap, it is not ‘overpriced given its valuation, prospects for growth, and generation of free cash flow.’ They are also of the view that Alphabet’s doesn’t face a major threat from its competitors, but from government regulations in the countries it operates. Alphabet’s stock recently made its lifetime high at $841.95 and is currently trading up 6.14% year-to-date. In other news, on February 13, Oracle Corporation (NYSE:ORCL) filed an appeal of last year’s court decision which denied it $9 billion in damages from Alphabet over the use of Java Code in Android OS.