Bill Gates - Bill & Melinda Gates Foundation Trust Portfolio

Bill Gates - Bill & Melinda Gates Foundation Trust Q4 2023 Portfolio

Bill & Melinda Gates Foundation, a trust fund managed by Bill Gates, disclosed 24 security holdings in their SEC 13F filing for the fourth quarter of 2023, with a total portfolio value of $42,283,341,000

 

 

Top 10 Holdings

Microsoft Corp. (MSFT) – 33.98% of the portfolio

 

·      Recent Activity: Reduced 2.74%

·      Shares: 38,210,869

·      Reported Price: $376.04

·      Value: $14,368,815,000

 

Berkshire Hathaway CL B (BRK.B) – 16.8% of the portfolio

 

·      Recent Activity: Reduced 11.60%

·      Shares: 19,916,349

·      Reported Price: $356.66

·      Value: $7,103,365,000

 

Canadian National Railway Co. (CNI) – 16.29% of the portfolio

 

·      Recent Activity: No change

·      Shares: 54,826,786

·      Reported Price: $125.63

·      Value: $6,887,889,000

 

Waste Management Inc. (WM) – 14.92% of the portfolio

 

·      Recent Activity: No change

·      Shares: 35,234,344

·      Reported Price: $179.10

·      Value: $6,310,471,000

 

Caterpillar Inc. (CAT) – 5.14% of the portfolio

 

·      Recent Activity: No change

·      Shares: 7,353,614

·      Reported Price: $295.67

·      Value: $2,174,243,000

 

Deere & Co. (DE) – 3.36% of the portfolio

 

·      Recent Activity: Reduced 9.20%

·      Shares: 3,557,378

·      Reported Price: $399.87

·      Value: $1,422,489,000

 

Ecolab Inc. (ECL) – 2.45% of the portfolio

 

·      Recent Activity: No change

·      Shares: 5,218,044

·      Reported Price: $198.35

·      Value: $1,034,999,000

 

Coca-Cola FEMSA S.A.B. de C.V. (KOF) – 1.39% of the portfolio

 

·      Recent Activity: No change

·      Shares: 6,214,719

·      Reported Price: $94.64

·      Value: $588,161,000

 

Walmart Inc. (WMT) – 1.13% of the portfolio

 

·      Recent Activity: No change

·      Shares: 3,030,159

·      Reported Price: $157.65

·      Value: $477,705,000

 

FedEx Corp. (FDX) – 0.92% of the portfolio

 

·      Recent Activity: No change

·      Shares: 1,534,362

·      Reported Price: $252.97

·      Value: $388,148,000

 

 

Portfolio Overview

 

Microsoft Corp. (MSFT): As the cornerstone of the portfolio, despite a reduction of 2.74% in shares, Microsoft still constitutes a substantial 33.98%. The company’s share value has appreciated, demonstrating its enduring influence and potential for growth in the technology sector.

 

Berkshire Hathaway CL B (BRK.B): A significant reduction of 11.60% in holdings suggests a strategic rebalancing, yet it continues to hold a considerable weight at 16.8%. The share price has risen notably, reflecting the diverse and robust nature of Berkshire’s investments.

 

Canadian National Railway Co. (CNI): Holding steady in the portfolio with 16.29%, CNI shows a modest increase in share price, indicating steady performance in the transportation sector, which is essential for economic activity.

 

Waste Management Inc. (WM): WM’s stable presence in the portfolio at 14.92% and an increase in share value align with the essential services it provides in waste management, an industry often seen as recession-resistant.

 

Caterpillar Inc. (CAT): At 5.14%, Caterpillar displays a positive uptick in share value. As a leading manufacturer of construction and mining equipment, its performance is a potential indicator of economic growth and infrastructure development.

 

Deere & Co. (DE): Despite a 9.20% reduction in shares, Deere remains a significant holding at 3.36%. The current share price decrease might reflect short-term market challenges or a strategic divestment.

 

Ecolab Inc. (ECL): With 2.45% of the portfolio, Ecolab’s shares have increased in value, likely benefiting from its position in the market as a provider of critical cleaning and sanitation products and services.

 

Coca-Cola FEMSA S.A.B. de C.V. (KOF): Representing 1.39%, Coca-Cola FEMSA’s share price increment is modest, signaling stability in the beverage industry and potential steady growth for this Latin American bottler.

 

Walmart Inc. (WMT): At 1.13%, Walmart shows a robust increase in share price. As a retail giant, its performance is often a bellwether for consumer spending and the health of the retail sector.

 

FedEx Corp. (FDX): Holding 0.92% of the portfolio, FedEx’s decrease in share value might reflect specific industry headwinds in logistics and delivery services, potentially due to increased competition or operational pressures.

Analyzing Microsoft Corporation (MSFT). Is MSFT interesting from Value-Investing Perspective ?

Introduction

 

Microsoft Corporation (MSFT) stands as a technological titan in the global market with a massive market capitalization of $3.05 trillion. For value investors, the size of the company, consistent revenue streams, and profitability are crucial indicators of a potentially solid investment. Let’s delve into the financials and market performance to evaluate MSFT from a value investing standpoint.

 

Market Position and Financials

 

Microsoft’s revenue for the trailing twelve months (ttm) stands at an impressive $227.58 billion, with a net income of $82.54 billion, highlighting the company’s ability to generate substantial profit. The earnings per share (EPS) of $11.06 reflect its profitability on a per-share basis.

 

Valuation Metrics

 

The PE ratio of 37.1 indicates a premium market valuation, which is common for leading tech companies with high growth expectations. The forward PE of 33.05 suggests that analysts expect earnings to grow. Despite a relatively low dividend yield of 0.73%, the company’s size and the stability may attract value investors looking for a low-risk profile.

Historical Performance and Dividends

 

The stock price has significantly increased by +61.06% over the last 52 weeks, possibly reflecting investor confidence in the company’s future growth. A beta of 0.90 suggests that MSFT’s stock volatility is slightly below the market average, which could appeal to risk-averse investors. The company has also been growing its dividend consistently for 19 years, which is a positive sign for value investors who appreciate dividend growth as a sign of a company’s financial health and stability.

 

Liquidity and Debt

 

Microsoft’s current ratio of 1.22 and a quick ratio of 1.02 indicate adequate liquidity. A Debt/Equity ratio of 0.37 shows that the company is not overly reliant on debt to finance its operations, which is a favorable indicator for value investors.

 

Efficiency Ratios and Returns

 

The return on equity (ROE) of 38.40% is exceptionally high, which can be an attractive metric for value investors as it suggests the company is generating high profits from its equity. Similarly, the return on assets (ROA) of 19.30% and the return on invested capital (ROIC) of 25.10% indicate efficient use of assets and capital.

 

Analyst Opinions and Forecasts

 

The average price target for MSFT is $416.00, which is only 1.38% higher than the current price, implying that the stock is potentially fairly valued at present. However, the “Strong Buy” consensus among analysts suggests that the stock may have room for growth, especially considering the 5-year revenue and EPS growth forecasts of 14.28% and 15.41%, respectively.

 

Conclusion

 

Microsoft Corporation appears to be a robust candidate for value investing based on its colossal market cap, high net income, and consistent dividend growth. The company’s strong fundamentals, efficient asset and equity management, and stability in the market make it an attractive proposition. However, the relatively high PE ratio and modest dividend yield may give some value investors pause, as they often seek undervalued stocks with higher dividend yields. Nevertheless, Microsoft’s position as a market leader with a strong financial track record cannot be overlooked. Value investors looking for a stable investment with growth potential in the technology sector may find MSFT to be a compelling choice. As with any investment decision, it is recommended to consider individual risk tolerance and investment goals when evaluating MSFT as a potential addition to one’s portfolio.

Analyzing Canadian National Railway Company (CNI). Why is Bill Gates investing in CNI ?

 

Bill Gates’s investment strategy has often focused on companies with solid financials, consistent performance, and potential for long-term growth. here’s a comprehensive analysis that might explain why Gates would be interested in investing in CNI based on CNI’s financial metrics and ratios as of February 19, 2024:

 

Robust Market Position:

 

·      CNI’s market capitalization of $83.47 billion reflects its significant size and presence in the North American rail transport industry, which can be an attractive attribute for long-term investors like Gates.

 

 

Strong Financial Performance:

 

·      The company reported a total revenue of $12.65 billion over the trailing twelve months (ttm), with a substantial net income of $4.23 billion, indicating a high profit margin.

·      An earnings per share (EPS) of $6.33, along with a profit margin of 33.43%, showcase the company’s ability to generate earnings efficiently.

 

Stable Valuation Metrics:

 

·      A price-to-earnings (PE) ratio of 20.52 and a forward PE of 15.99 suggest that the market has confidence in the company’s future earnings potential.

·      The price-to-sales (PS) ratio of 6.6 and a forward PS of 4.71 reflect a premium valuation, which could be justified by the company’s strong market position and stable earnings.

 

Dividends and Growth:

 

·      CNI offers a dividend of $2.51 per share, yielding 1.93%, which is an attractive feature for investors seeking regular income.

·      The company has a history of dividend growth, increasing it by 5.79% year-over-year, and has consistently paid dividends for 27 years.

 

Debt Management:

 

·      The debt-to-equity ratio of 0.93 suggests that CNI uses debt financing responsibly, which is a positive indicator for risk-averse investors.

 

Operational Efficiency:

 

·      An impressive operating margin of 38.68% and a high EBITDA margin of 52.92% demonstrate the company’s operational efficiency and its ability to control costs effectively.

 

Investment and Liquidity:

 

·      The company maintains a reasonable level of liquidity, with a current ratio of 0.61 and a quick ratio of 0.44.

·      CNI’s enterprise value of $96.71 billion compared to its market cap indicates that it might be carrying a fair amount of debt, which it manages effectively given its interest coverage ratio of 9.99.

 

Steady Stock Performance:

 

·      With a beta of 0.66, CNI’s stock is less volatile than the market, which might be appealing to an investor like Gates who may prefer stable, less risky investments.

·      The stock price has seen a 10.57% increase over the last 52 weeks, indicating steady growth.

 

Analyst Ratings and Target Price:

 

·      The consensus “Hold” rating from analysts and a moderate price target increase of 2.70% suggest that the stock is currently valued fairly by the market.

·      A revenue growth forecast of 5.67% and an EPS growth forecast of 7.25% over the next five years demonstrate expected steady growth, aligning with Gates’s investment approach.

 

 

Environmental, Social, and Governance (ESG):

 

Although not directly provided in the financial data, Gates’s known interest in sustainable and responsible investing might also be a factor if CNI exhibits strong ESG practices, which are increasingly important for long-term value creation.

 

In conclusion, the combination of CNI’s solid financials, consistent dividend growth, operational efficiency, and a stable market position likely make it an attractive investment for Bill Gates. These factors align with a strategy focused on long-term value, sustainability, and lower volatility, all of which are characteristic of Gates’s known investment preferences.

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