Steered by an experienced father-son team of R. Jeffrey Bruce and Robert B. Bruce, Bruce & Co prefers to invest using a moderate allocation of capital across Stocks, Bonds and cash-based assets. Both vanguards of the investment duo have been at the helm since the fund’s founding 33 years ago. They prefer an emphasis on turn-arounds and capital appreciation in their investment focus.
The duo also offer advice to other funds, including Bruce Fund (MUTF: BRUFX), that has an impressive 1-year (6.12%), 3-year (5.52%), 5-year (8.61%), 10-year (8.91) and 15-year (12.12%) track record.
When compared to Robert Bruce’s Bruce & Co. Inc. Q4-2017 portfolio, the latest portfolio shows a slight increase in holding value. The overall portfolio value rose from $461,442,000 in Q4 2017, to $478,786,000 in Q1 2018. That’s an increase in value of approximately 3.76%. This, despite the fact that the number of holdings in the latest portfolio are down to 46 from the 48 held earlier.
Notable changes to the portfolio come from:
- Net new positions in Apple and Xtant Medical Holdings (NYSE:XTNT) (common stock)
- Divestments in holdings of Calpine, Agenus (NASDAQ: AGEN) and Gevo (NASDAQ: GEVO) (7.5%)
Other than these changes, the names in both portfolios seem largely unchanged. However, there have been changes to individual holdings. For instance, names like Abbott, Allergan, IBM, Valeant, Abbvie and Pfizer have seen additions, while Actua and Astrotech saw their holdings trimmed.
There are interesting statistics that we can glean from analyzing the top-10 positions in each of the two quarterly portfolios as well. For instance:
- The new top-10 holdings account for 61.88% of the overall portfolio, while previously it accounted for slightly more – 63.91%
- The new list of top-10 holdings do not include any ‘net new’ names. All of them include holdings that were also present in Q4 2017
- Six (60%) of the top-10 positions (number of shares held) have not changed, although some of them have appreciated in value, while some have depreciated
- GM, a member of the Q4 2017 top-10 list, was displaced by Merck in the new top-10 list. However, Guru Bruce has not changed his holdings (still holds 450,000 shares) in the auto-maker
In terms of the leading three contenders on the top-10 list, Amerco (NASDAQ: UHAL), NexEra Energy (NYSE: NEE) and AllState (NYSE: ALL) still hold sway in the new list. A sizable increase in the holdings of Abbvie (NYSE: ABBV) saw the drug maker inch utility CMS Energy (NYSE: CMS) down one position, to claim 4th place in the new top-10 list. A sizable up-scaling in IBM saw the tech giant rocket to 7th place, from the bottom of the pack in Q4 2017.
In terms of Guru Bruce’s sector preferences, Utilities, Healthcare and Industrials are still the top-3 segments of the market where the top-10 holdings are invested. However, Healthcare, which represented just 13.23% of the holdings in Q4 2017, now accounts for 22% of the top-10 investments. Changes (increase) in IBM holdings are why Technology has seen a bump up, in terms of percentage of top-10 holdings, from 5.54% last quarter, to 7.59% in the current quarter.
Takeaway’s from The Portfolio
As indicated earlier on in this post, the overall value of the portfolio has been a positive 3.76%. But what else can we learn from reviewing the overall portfolio, and especially the top-10 holdings?
Well, here are some key takeaways:
- Unlike some other Guru portfolios that we have analyzed, Guru Bruce doesn’t seem to have traded (bought/sold) many of the names in the portfolio. This would explain why 60% of the top-10 names have seen no activity in the positions held since Q4 2017
- Based on analysis of the top-10 holding sectors, it would appear that Bruce favors Healthcare, as evidenced by increase in positions of names like ABBV (16.74%), PFE (21.96%) and MRK (38.5%)
- It would also seem like Bruce has an affinity for IBM, with the Guru increasing his top-10 holdings in this name by 27.3%
Over a roughly 120-day period, the Top-10 portfolio wouldn’t have done much for investors trying to model their holdings on Bruce’s style. However, sticking in a popular sector like Healthcare, with names like MRK and PFE, would have proved rather fulfilling.
Author does have an investment in Pfizer stock discussed in this article. Sign-up for our bi-weekly newsletter so you don’t miss any hot investment opportunities. Also don’t forget to get our recently published Best Blockchain Stock To Invest In Right Now report absolutely free.