Introduction

Bill Nygren, a renowned fund manager at Oakmark Funds, has established himself as one of the top value-focused investors on Wall Street. With an impressive track record spanning over the years, Nygren has consistently delivered exceptional returns for his investors.

Background

Graduating from the University of Wisconsin and University of Minnesota, Nygren has been managing the Oakmark Select Fund since 1996 and the Oakmark Fund since 2000. These funds have amassed significant assets and achieved remarkable performance milestones.

Performance and Ranking

The Oakmark Select Fund, currently holding $5.8 billion in assets, has soared nearly 33% this year, ranking in the top 1% percentile in its category according to Morningstar. Additionally, the fund has delivered an average annual return of 10.7% over the past 15 years.

The $18 billion Oakmark Fund boasts a similar track record, with an annualized return of 12.2% over the last 15 years and 12.7% since 1991. It has outperformed the S & P 500 this year with a 24% rally and consistently ranks in the top 1% percentile over the past 10 and 15 years.

Investment Strategy

Nygren’s investment approach revolves around analyzing essential metrics such as free cash flow and predictable earnings growth. He also prioritizes companies with management teams that align with shareholders’ interests. Nygren emphasizes investing in undervalued businesses, purchasing stocks when their prices significantly deviate from their intrinsic value.

Portfolio Composition

Unlike cap-weighted indexes that heavily concentrate on large-cap stocks, Nygren’s funds maintain a low concentration risk. The Oakmark Fund’s five largest positions account for only 15% of its assets, with Google-parent Alphabet being the largest position at less than 4%. Nygren holds a select number of 50-60 positions in the Oakmark Fund, allowing each high-conviction bet to have a more significant impact on the fund’s performance.

Recent Investments

Nygren identified buying opportunities in the financial sector following the regional banking crisis. He acquired shares of Charlotte-based Truist Financial, considering it an attractive long-term investment. Nygren also bought the dip in Charles Schwab shares, joining a list of prominent investors. Additionally, he holds positions in Capital One and Ally Financial, both offering solid earnings and trading at a discount to their mark-to-market book value. Nygren also maintains positions in large names like Bank of America and Wells Fargo, which have single-digit price-to-earnings multiples and exhibit positive growth prospects.