Harris Associates is a Chicago-based fund, which is wholly owned by Natixis Global Asset Management, a French financial services company, whose principal owner is BPCE, one of the largest banking groups in France. With $125 billion in assets under management, the fund invests primarily in companies that they consider to be trading at significant discounts and, therefore, can deliver more value carrying a big profit potential. In the latest 13F, Harris Associates disclosed its equity portfolio as at the end of the first quarter, which has a value of $55.84 billion and contains over 200 positions. In this article we will take a closer look at the top five equity positions from Harris’ latest 13F.
Harris Associates has been bullish on the top holdings from its equity portfolios, with some of them climbing a couple of positions over the quarter. On the first spot is Oracle Corporation (NYSE:ORCL), of which the fund owns 68.46 million shares, with an aggregate value of $2.8 billion. Harris has been consistently solidifying its exposure to Oracle, which has been its largest holding, and during the January-March period they added other 381,600 shares to the stake. Boykin Curry‘s Eagle Capital Management also holds a big position in the company, which contains 44.13 million shares as of the end of 2013. The stock of Oracle trails a P/E of around 16, below the industry average of 34. The company reported net income of $2.68 per share for the last year, slightly above from a year earlier. For the current year, Oracle Corporation (NYSE:ORCL) is expected to deliver EPS of $2.90.
The next on the list is General Motors Company (NYSE:GM), in which Harris Associates reported a $2.19 billion stake, which contains 64.54 million shares, up by around 3.34 million shares in comparison with the previous quarter. The stock of the company declined by 17% since the beginning of the year, while the whole industry of auto manufacturers edged down by 7% during the same period. General Motors Company (NYSE:GM) reported EPS of $3.18 per share, versus a consensus estimate of $3.39, and revenues of $155 billion, slightly above the estimates. Aside from Harris Associates, a big shareholder of the company is Warren Buffet‘s Berkshire Hathaway, which held 40.0 million shares at the end of 2013.
Bank of America Corp (NYSE:BAC) is the third-largest holding in Harris Associates’ latest 13F. The fund reported ownership of 108.16 million shares of the bank holding company, with a total value of $1.86 billion, raising the stake by some 2.57 million shares. Recently, Bank of America announced that it will halt it previously disclosed capital actions. The company also suspended its buyback plans and has revised its regulatory capital amounts and ratios due to an incorrect adjustment linked to the treatment of certain structured notes assumed in the acquisition of Merrill Lynch in 2009. On the back of this announcement, the stock of Bank of America Corp (NYSE:BAC) plunged by over 6% in Monday trading.
In Wells Fargo & Co (NYSE:WFC), Natixis’ fund disclosed a $1.74 billion stake, which contains 34.98 million shares, up by over 10% over the quarter. Warren Buffett also holds a significant amount of Wells Fargo shares, his stake containing 463.46 million shares. Wells Fargo’s stock trails a P/E of around 161, which is one of the highest among money center banks, and is almost ten times above the industry average. For the first quarter of 2014, the company reported an annual increase of diluted EPS by 14% to $1.05, and a return on equity of over 14%, which is up by 76 basis points.
The fifth-largest holding is Intel Corporation (NASDAQ:INTC), of which Harris Associates owns 66.86 million shares, with an aggregate value of $1.73 billion. In the first quarter, Intel’s EPS declined by 5% to $0.38 and its revenue fell by 8% to $12.8 billion. The stock of Intel, inched up by around 2% year-to-date and sports a P/E of around 17, which is slightly below the industry average of 21.00. Jean-Marie Eveillard‘s First Eagle Investment Management is another shareholder of Intel, owning 35.15 million shares as of the end of 2013.