David Winters Sells Two-Thirds of Stake in Coca-Cola

Jun 19, 2015

Wintergreen Fund (Trades, Portfolio) manager David Winters (Trades, Portfolio) is a deep value investor. Like many investors, Wintergreen struggled in 2014 – not as much as some, though, with a -1.68% return for the year – but it returned nearly 17% in 2013. Winters doesn’t make many transactions in a given quarter – his nine transactions in the first quarter of 2015 were the most he has made since the fourth quarter of 2013 – but they tend to be noteworthy.

Most of Winters’ first-quarter activity involved selling all or part of stakes in his portfolio. He added only one – CSX Corp (CSX, Financial), a Jacksonville, Florida-based railroad transportation company – to his portfolio. Winters paid an average price of $34.5 per share for a 292,455-share stake. The purchase had a 1.6% impact on his portfolio.

The rest of Winters’ deals in the first quarter were sales.

He reduced his stake in Coca-Cola Co (KO, Financial), an Atlanta-based beverage corporation and manufacturer, retailer and marketer of nonalcoholic beverage concentrates and syrups, by more than two-thirds, selling 1,720,604 shares for an average price of $41.82 per share. The sale had a -9.12% impact on his portfolio.

He also reduced his stake in Reynolds American Inc (RAI, Financial), a North Carolina-based tobacco company. Winters sold nearly one-quarter of his stake, selling 492,940 shares for an average price of $70.07 per share. The transaction had a -3.97% impact on Winters’ portfolio.

Reynolds has a market cap of $41.13 billion and an enterprise value of $44.52 billion. It has a P/E of 27.4, a Price/Book of 9.1 and a Price/Sales of 4.8. James Barrow (Trades, Portfolio), Wintergreen Fund (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jim Simons (Trades, Portfolio), Manning & Napier Advisors, Inc, Meridian Funds (Trades, Portfolio), Murray Stahl (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio) and David Dreman (Trades, Portfolio) have shares of Reynolds in their portfolios.

Winters sold 386,704 shares of Franklin Resources Inc (BEN, Financial), a California-based holding company, for an average price of $53.07 per share. The sale had a -2.68% impact on his portfolio.

On Tuesday, Franklin Resources declared a $0.15 per share dividend to be given to stockholders of record as of June 30.

Winters reduced his stake in Lorillard Inc (LO, Financial), a North Carolina-based tobacco company, selling 323,330 shares for an average price of $66.58 per share. The transaction had a -2.57% impact on his portfolio.

Winters also reduced his stake in Altria Group Inc (MO, Financial).

Winters sold his stakes in three companies in the first quarter – MasterCard Inc (MA, Financial), H.B. Fuller Company (FUL, Financial) and Domtar Corp (UFS, Financial).

Winters sold his 474,944-share stake in MasterCard, a New York-based financial services corporation, for an average price of $86.75 per share. The sale had a -5.1% impact on his portfolio.

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