Tracking John Rogers’ Ariel Investments Portfolio – Q4 2023 Update

This article is part of a series that provides an ongoing analysis of the changes made to Ariel Investments’ 13F stock portfolio on a quarterly basis. It is based on Ariel Investments’ regulatory 13F Form filed on 2/14/2024. John Rogers’ 13F portfolio value increased from $9.45B to $10.04B this quarter. The portfolio is diversified with recent 13F reports showing around 150 positions. There are 61 securities that are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five stakes are Jones Lang LaSalle, Mattel, Generac Holdings, Carlyle Group, and Charles River Laboratories. They add up to ~14% of the portfolio. Please visit our Tracking John Rogers’ Ariel Investments Portfolio series to get an idea of their investment philosophy and our last update for the fund’s moves during Q3 2023.

Their flagship mutual fund is the Ariel Fund (MUTF:ARGFX) incepted in 1986. Ariel Fund has a lifetime annualized return of 10.55% compared to 10.32% for the Russell 2500 Index and 10.74% for the S&P 500 Index. The other mutual funds in the group are Ariel Appreciation Fund (MUTF:CAAPX), Ariel Focus Fund (MUTF:ARFFX), Ariel International Fund (MUTF:AINTX), and Ariel Global Fund (AGLOX).

Stake Increases:

Jones Lang LaSalle (JLL): The ~3% JLL position is a very long-term stake first purchased in 2001. Next year saw a huge stake build-up at prices between ~$14.50 and ~$25. The position has seen selling since 2004. The bulk of the selling happened in 2006 at prices between ~$55 and ~$93. Most years since have also seen selling. H2 2020 saw a ~25% stake increase at prices between ~$90 and ~$154. That was followed by a ~11% increase during Q1 2023 at prices between ~$137 and ~$185. The stock currently trades at ~$183. There was a minor ~5% increase during Q2 2023 and a ~4% increase last quarter. There was a marginal further increase this quarter.

Generac Holdings (GNRC): GNRC is a 2.78% stake that saw a ~27% increase during Q1 2023 at prices between ~$98 and ~$135. There was a ~15% increase in the last quarter at prices between ~$103 and ~$154. The stock is now at ~$111. This quarter also saw a ~8% increase.

Carlyle Group (CG): The 2.59% CG stake was built during the last two quarters at prices between $27.50 and $42 and the stock currently trades at $44.79. There was a marginal increase this quarter.

First American Financial (FAF): FAF is a 2.35% of the portfolio stake established in 2011 at prices between ~$11 and ~$17. 2013 also saw a ~25% stake increase at prices between ~$21 and ~$28. The position has seen consistent reductions since 2015. Recent activity follows: 2019 had seen a ~20% selling at prices between ~$45 and ~$64. There was a ~25% stake increase in Q4 2020 at prices between ~$44.50 and ~$54.50. That was followed by a similar increase in Q1 2021 at prices between ~$51 and ~$58. The next quarter saw a ~15% selling at prices between ~$64 and ~$81. The stock is now at ~$55. The last several quarters saw only minor adjustments.

Madison Square Garden Entertainment (MSGE): MSGE is currently at 2.28% of the portfolio. The original MSGE stake was built over the seven quarters through Q4 2021 at prices between ~$27 and ~$79. The stock currently trades at $37.34. There was a minor ~5% increase during Q2 2023 and a ~3% increase last quarter. This quarter saw a marginal further increase.

Note: they control ~18% of the business.

Check Point Software (CHKP): The 2.28% stake in CHKP was built during the last two quarters at prices between ~$125 and ~$154 and the stock currently trades at ~$165.

Northern Trust (NTRS): NTRS is a 2.23% very long-term position first purchased in 2002. The 2002-2004 timeframe saw a ~10M share stake built at prices between ~$30 and ~$60. The position has since been sold. The bulk of the selling was in the 2005-2007 timeframe at prices between ~$42 and ~$81. The last few quarters have seen minor increases. The stock currently trades at $81.32.

Mohawk Industries (MHK): MHK is a 2.21% of the portfolio position built over the three years through Q1 2022 at prices between ~$117 and ~$230 and it is now at ~$118. There were minor increases in the last several quarters.

Sphere Entertainment (SPHR): The SPHR position came about as a result of the spin-out from MSG Entertainment. They had 6.66M shares of MSG Entertainment which now trades under this ticker. The net stake was reduced by ~20% during Q2 2023 and another ~15% last quarter. The stock currently trades at $47.84. This quarter saw a ~8% increase.

Note: they control ~18% of the business.

ADT Inc. (ADT), Affiliated Managers Group (AMG), Boyd Gaming (BYD), Envista Holdings (NVST), Interpublic Group (IPG), Knowles Corp. (KN), Littelfuse (LFUS), Lindblad Expeditions (LIND), Leslie‘s (LESL), Madison Square Garden Sports (MSGS), Manchester United (MANU), NetApp (NTAP), Norwegian Cruise Line Holdings (NCLH), Prestige Consumer Healthcare (PBH), and Stericycle (SRCL): These small (less than ~2.5% of the portfolio each) stakes were increased this quarter.

Note: They have significant ownership stakes in Knowles Corp, Lindblad Expeditions, Leslie’s, Madison Square Garden Sports, Manchester United, and Prestige Consumer Healthcare.

Stake Decreases:

Mattel, Inc. (MAT): MAT is currently the largest 13F position at 2.91% of the portfolio. It was first purchased in 2016 at prices between ~$25 and ~$34. Next year saw a stake doubling at prices between ~$13 and ~$30.50. 2018 also saw a one-third stake increase at prices between ~$9.50 and ~$18. Q1 2019 saw a ~12% trimming while the next two quarters saw a one-third increase in prices between ~$9.50 and ~$14.50. Q1 2020 saw another ~15% stake increase at prices between $7.25 and $14.75. H2 2021 had also seen a ~17% increase in prices between ~$18 and ~$23. The last several quarters have seen minor trimming. The stock currently trades at $19.57.

Note: They have a ~4% ownership stake in the business.

Charles River Laboratories (CRL): The CRL stake saw a ~50% stake increase during Q2 2023 at prices between ~$184 and ~$210. The last quarter saw a minor increase while this quarter there was marginal trimming. The stock currently trades at ~$261 and the stake is at 2.47% of the portfolio.

Kennametal Inc. (KMT): KMT is a 2.42% of the portfolio position. It was established in 2014 at prices between $34 and $52. The position had seen minor buying over the years. Q1 2020 saw a ~15% stake increase at prices between $15 and $37. The three quarters through Q3 2021 had seen another ~43% stake increase at prices between ~$33 and ~$42. The stock currently trades at ~$24. The last few quarters have seen minor trimming.

Note: Ariel Investments has a ~11.8% ownership stake in Kennametal Inc.

Resideo Technologies (REZI): The 2.37% REZI stake was built during the three quarters through Q2 2022 at prices between ~$19.50 and ~$28 and the stock currently trades at $22.74. The last three quarters saw minor trimming.

Note: They have a ~9% ownership stake in the business.

Lazard, Ltd. (LAZ): LAZ is a 2.35% of the portfolio position first purchased in 2009 at prices between ~$19 and ~$38. Next year saw a stake-tripling at prices between ~$25 and ~$36. The interim period saw further buying but in 2014 there was a ~25% selling at prices between ~$39 and ~$50. Recent activity follows. 2019 saw a ~15% increase at prices between ~$31 and ~$40.50. The three quarters through Q3 2021 saw another ~45% stake increase at prices between $38.70 and $48.75. The stock is now at $38.69. There was a ~28% trimming in the last six quarters.

Note: Ariel Investments has a ~6.4% ownership stake in Lazard.

Gentex Corp. (GNTX): The 2.13% GNTX stake was purchased in Q3 2021 at prices between ~$27.50 and ~$38. Last quarter saw a ~18% selling at prices between ~$29 and ~$34. The stock currently trades at $35.91.

Baidu, Inc. (BIDU): BIDU is currently at 1.81% of the portfolio. It was established in 2013 with the bulk of the current position purchased in 2015 at prices between ~$134 and ~$234. The position has wavered. Recent activity follows. 2022 saw a ~18% increase at prices between ~$79 and ~$161. Last quarter saw a ~22% selling at prices between ~$125 and ~$156. That was followed by another ~30% reduction this quarter at prices between ~$105 and ~$135. The stock currently trades at ~$104.

Microsoft Corp. (MSFT): MSFT is now at 1.38% of the 13F portfolio. It was a very small stake first purchased in 2010. The 2013-2015 timeframe saw a 2.2M share build-up at prices between ~$26 and ~$56. Recent activity follows: 2019 saw a ~22% reduction in prices between ~$100 and $160. The 2020 to 2021 time period saw another ~50% selling at prices between ~$137 and ~$343. The last three quarters also saw a ~50% reduction in prices between ~$222 and ~$358. This quarter saw another ~37% selling at prices between ~$313 and ~$383. The stock currently trades at ~$416.

Philip Morris (PM): A very small position in PM was first purchased in 2013. By 2017, the stake was built to a ~1M share stake. The next year saw the position increase by ~220% at prices between $66 and $110. 2019 had seen another ~20% stake increase at prices between $70 and $91. The three quarters through Q3 2020 saw a ~20% stake increase. Q1 2021 saw another ~15% stake increase at prices between ~$79 and ~$91 while next quarter there was a ~20% selling at prices between ~$88 and ~$101. That was followed by a similar reduction during Q1 2023 at prices between ~$90 and ~$105. There was a ~18% selling in the last quarter at prices between ~$90 and ~$99. That was followed by a ~48% reduction this quarter at prices between ~$87 and ~$95. The stock currently trades at $93.90, and it is at 1.21% of the portfolio.

Adtalem Global Education (ATGE), Axalta Coating (AXTA), Brink‘s Co. (BCO), BOK Financial (BOKF), CBRE Group (CBRE), Core Laboratories (CLB), Credicorp Ltd. (BAP), Charles Schwab (SCHW), CarMax (KMX), Equity Commonwealth (EQC), Gilead Sciences (GILD), Goldman Sachs (GS), J. M. Smucker (SJM), Janus Henderson Group (JHG), Johnson & Johnson (JNJ), Laboratory Corp. (LH), Masco (MAS), nVent Electric (NVT), OneSpaWorld Holdings (OSW), Paramount Global (PARA), Royal Caribbean Cruises (RCL), Simpson Manufacturing (SSD), Snap-on (SNA), Stanley Black & Decker (SWK), Verizon Communications (VZ), and Zebra Technologies (ZBRA): These small (less than ~2.5% of the portfolio each) stakes were reduced during the quarter.

Note: They have significant ownership stakes in Adtalem Global Education, Core Laboratories, Equity Commonwealth, GCM Grosvenor (GCMG), and OneSpa Holdings.

Below is a spreadsheet that shows the changes to John Rogers’ Ariel Investments 13F portfolio holdings as of Q4 2023:

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.