Bill & Melinda Gates Foundation Trust is the largest foundation in the world that supports various projects and initiatives in education, world health and population, and community giving in the Pacific Northwest. The trust manages to give away billions of dollars through holding a large portfolio of investments, including some $20 billion in equities. The trust is managed by Michael Larson and has among its supporters Bill and Melinda Gates and notorious investor Warren Buffett who contributes significant amounts to the foundation each year.
Even though the trust does not provide any figures on its returns, different sources claimed that Mr. Larson does a great job in managing it and brought steady returns over the years. In addition to managing the Gates Foundation, Mr. Larson has been responsible for managing Bill Gates’ personal wealth for over two decades. Mr. Larson uses a conservative approach and rarely makes any significant changes in the equity portfolio. The foundation still owns around $11.81 billion in 78.63 million class B shares of Berkshire Hathaway Inc. (NYSE:BRK.B), which is the largest stake in terms of value, amassing 59% of the portfolio. However, during the fourth quarter, the foundation’s equity portfolio contained three new positions in United Parcel Service, Inc. (NYSE:UPS), Walgreens Boots Alliance Inc (NASDAQ:WBA) and Diamond Foods, Inc. (NASDAQ:DMND). Additionally, the 13F showed that Mr. Larson sold out the entire stake in The Coca-Cola Co (NYSE:KO), which previously was one of the largest holdings and contained 21.43 million shares.
Let’s take the new picks one by one. In United Parcel Service, Inc. (NYSE:UPS), Bill & Melinda Gates Foundation Trust disclosed a new $503.08 million stake that contains 4.52 million shares. The stock hasn’t fared very well so far, losing around 8% year-to-date amid the company reporting disappointing financial results. Even though in-line with estimates, the company’s profit slid to $453 million in the fourth quarter of 2014, versus $1.17 billion a year earlier. The decline in profits came on the back of growing operating costs, even though revenue appreciated to $15.90 billion from $14.98 billion for the fourth quarter of 2013. Moreover, the company has revised downwards its forecast for 2015, expecting EPS between $5.05 and $5.30, versus $5.45 to $5.70 anticipated previously. Investors seem to have anticipated the decline of United Parcel Service, Inc. (NYSE:UPS)’s stock, as the number of funds holding shares of the company fell to 38 with around $2.06 billion worth of stock, from 45 funds with $2.75 billion at the end of September. Nevertheless, Gates Foundation is the second-largest shareholder of United Parcel Service, Inc. (NYSE:UPS) among funds that we track, being outranked by Edgar Wachenheim’s Greenhaven Associates with 5.18 million shares.
Next in line comes Walgreens Boots Alliance Inc (NASDAQ:WBA), a pharmaceutical retailer formed after the merger between Walgreens and Alliance Boots. Gates Foundation reported ownership of 3.47 million shares, valued at $264.83 million. Walgreens Boots Alliance Inc (NASDAQ:WBA), being already a pretty popular stock among investors, after the merger gained even more attention from bulls. In this way, at the end of 2014, out of over 700 funds that we track, 70 reported holding some $7.0 billion worth of Walgreens Boots Alliance Inc (NASDAQ:WBA)’s stock, including 13 billionaire investors, among which are Barry Rosenstein of JANA Partners and Andreas Halvorsen of Viking Global. In both equity portfolios, the pharmaceutical retailer is one of the top positions in terms of value, with JANA holding some 13.75 million shares and Viking holding 18.93 million shares.
In comparison with the previous new picks, Gates Foundation stake in Diamond Foods, Inc. (NASDAQ:DMND) is very small. The holding is actually the smallest in the equity portfolio managed by Mr. Larson and contains 10,412 shares, valued at $294,000. Diamond Foods, Inc. (NASDAQ:DMND) is a 839 million packaged food company that is engaged in selling and distributing snack products and culinary, in-shell and ingredient nuts. The stock of the company lost 11% in the last 52-weeks and investors seem to have mixed feelings about the company’s prospects. Among funds that we track, the largest shareholder of Diamond Foods, Inc. (NASDAQ:DMND) is Howard Marks’ Oaktree Capital Management, that owns around 4.42 million shares as of the end of 2014, flat on the quarter, while Steven Cohen‘s Point72 Asset Management cut its stake by 40% on the quarter to 496,400 shares.
Disclosure: none
