You can find the full letter here:
In its second quarter 2017 client letter, Wedgewood Partners discusses portfolio holdings Ross Stores (ROST) and TJX Companies (TJX).
While we hear the 6 perpetual drumbeat of e-commerce incursion, we don’t see much evidence as Ross Stores, as well as another portfolio holding, TJX Companies, have differentiated themselves to the point where they (combined with another, smaller retailer, Burlington Stores – not held) have taken more apparel and footwear share than Amazon – the pre-eminent e-commerce retailer – over the past 5 years.
We think that Ross Stores and T.J. Maxx’s outperformance relative to the rest of the vast retail industry is related to their differentiated value propositions.
A new holding discussed is Celgene (CELG).
With the stock trading at attractive valuations relative to the peer group, in our view, the addition of Celgene to the portfolio is a great opportunity to re-enter the biotech space and to benefit from the growth opportunities in Celgene's existing pipeline and R&D efforts.
The letter also discusses the fantastic post-financial crisis bull run of the "fab five" stocks: Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), and Facebook (FB).
Today, Mr. Market’s Fab-Five combined market capitalization is nearly $3 trillion. The wealth created by these five companies alone over the past +8 years is the stuff of Carnegie and Rockefeller. Further, from our perch as Large Cap Growth investment managers, one could argue that ownership of these five companies (or the lack there-of) has been the make or break element of a firm’s performance rankings – particularly since 2013.