Our Top 10 holdings, are our favourite companies.
They typically have a wide moat, and are likely to earn excess profits over the long run. They have all scored very highly in our factor based selection methodology.
(Note these are not investment recommendations)
Adobe provides content creation, document management, digital marketing and advertising software and services to creative professionals and marketers. The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.
AutoZone is the premier seller of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in the United States. The company derives an increasing proportion of its sales from domestic commercial customers, roughly three quarters in fiscal 2020, and has a growing presence in Mexico and Brazil. AutoZone had 6,549 stores in the U.S. (5,885), Mexico (621), and Brazil (43) as of the end of fiscal 2020.
Sector: Consumer Discretionary
Market Cap: $144bn
Purchased: August 2021
Hermes is a French luxury goods manufacturer. Its largest revenue streams are leather goods, clothes and accessories, and silk and textiles. It has over 300 stores in 45 countries and has seen no decline in sales over the last 10 years. It was founded in 1837.
KLA designs and manufactures yield management and process monitoring diagnostic, and control systems for the semiconductor industry. Since being founded in 1975, it has built up an extensive competitive advantage and controls over 55% of the PDC market. TSMC and Samsung Electronics are major customers.
Lam Research manufactures equipment used in the fabrication of semiconductors. Lam's flagship products are sold in all major geographies to key customers such as Samsung, Micron, and Taiwan Semiconductor Manufacturing.
LVMH Moët Hennessy Louis Vuitton is the world's largest luxury goods company. The Company produces and sells wine, cognac, perfumes, cosmetics, luggage, and watches and jewelry. It operates more than 5,000 stores across the world.
Meta Platforms is the new name for Facebook. It is the world’s largest online social network, with 2.5 billion monthly active users. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Meta Platforms operates at a 30%-plus margin.
Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three overarching segments: Productivity and Business Processes, Intelligence Cloud, and Personal Computing. Through acquisitions, Microsoft owns Xamarin, LinkedIn, and GitHub.
A global healthcare company with 90 years of innovation and leadership in diabetes care, it has around 50% market share of the global insulin market. The company also has leading positions within haemophilia care, growth hormone therapy and hormone replacement therapy.