Tracking Thyra Zerhusen’s Fairpointe Capital Portfolio – Q4 2017 Update

• Thyra Zerhusen’s 13F portfolio value increased from $5.06B to $5.30B this quarter.
• Fairpointe Capital substantially increased Whirlpool, Bunge, and Interpublic Group during the quarter.
• The largest three positions are Akamai, Lions Gate, and Time Inc.

Thyra Zerhusen’s 13F portfolio increased ~5% from $5.06B to $5.30B this quarter. Recent 13F reports have shown a total of around 70 individual stock positions in the portfolio. The largest five stakes are Akamai, Lions Gate, Time Inc., Teradata, Cree and they together add up to ~18% of the portfolio.

Below is a summary:

Stericycle Inc. (SRCL): SRCL is a ~3% portfolio stake established in Q2 2016 at prices between $93 and $128 and increased by ~140% the following quarter at prices between $77 and $107. There was another ~37% increase in Q4 2016 at prices between $71 and $80 and that was followed with a ~15% increase in Q1 2017. The stock currently trades at $62.97. There was a ~2% trimming this quarter.

Adtalem Global Education (ATGE) previously DeVry: ATGE is a 1.32% of the portfolio stake. The original position is from H2 2012 at a cost-basis of ~$20 per share. Q2 2016 saw a ~30% increase at prices between $16 and $20. There was a ~25% selling in H2 2016 and that was followed with a ~37% reduction in Q1 2017 at prices between $31 and $35.50. There was another ~37% selling in Q2 2017 at prices between $34 and $40.70 and that was followed with a ~20% selling this quarter at prices between $42 and $50. Fairpointe is harvesting gains. The stock is currently at $49.10.

Lions Gate Entertainment (LGF): LGF is now the second-largest position at 3.56% of the portfolio. It was established in Q1 2016 at prices between $18.50 and $32.50 and increased by just over one-third the following quarter at prices between $19.50 and $23.50. The stock is now at ~$27. There was a ~11% trimming last quarter. For investors attempting to follow Fairpointe, LGF is a good option to consider for further research.

Office Depot (ODP): ODP is a ~2% portfolio stake built-up in 2016 at prices between $3 and $7.50. The stock currently trades at $2.31. Fairpointe controls ~6% of the business. There was a marginal increase this quarter.

Copa Holdings (CPA): CPA is a 2.41% portfolio position. The original stake is from Q2 & Q3 2015 at prices between $41 and $112. There was a ~27% selling in Q3 2016 at prices between $52 and $91 and ~17% selling the following quarter at prices between $84 and $95. There was another ~30% reduction in Q1 2017 at prices between $91 and $112. The stock is now at $137. Last two quarters saw a ~20% reduction at prices between $108 and $134 and that was followed with a ~5% trimming this quarter.

Tegna Inc. (TGNA): TGNA is a ~3% portfolio stake. It was established in Q2 2015 at prices between $14 and $29. H2 2016 had seen a ~45% increase at prices between $11 and $16 and that was followed with another ~24% increase in Q1 2017 at prices between $9 and $14. The stock currently trades at $12.33. There was a roughly one-third increase over the last two quarters at prices between $12 and $15.50 and that was followed with a ~11% increase this quarter.  For investors attempting to follow Fairpointe, TGNA is a good option to consider for further research.

Note 1: The prices quoted above for TGNA are adjusted for the Cars.com (CARS) spinoff in May last year.

Note 2: Reulatory Filings show Fairpointe having significant ownership stakes in the following businesses: Cars.com (CARS), Chicago Bridge & Iron (CBI), Copa Holdings (CPA), CREE Inc. (CREE), Cooper Tire & Rubber (CTB), Adtalem Global Education (ATGE), Domtar (UFS), Itron Inc. (ITRI), McDermott Intl. (MDR), New York Times (NYT), Office Depot (ODP), Tegna Inc. (TGNA), Scholastic (SCHL), TIME Inc. (TIME), Unisys (UIS), and Werner Enterprises (WERN).

Below is a spreadsheet that highlights the changes to Thyra Zerhusen's Fairpointe Portfolio US long stock portfolio as of Q4 2017. For a look at how the portfolio has progressed, see our previous update:

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