Insights from the Fourth Quarter 2024 13F Filing

PRIMECAP Management (Trades, Portfolio) recently submitted its 13F filing for the fourth quarter of 2024, offering a glimpse into its strategic investment decisions. Founded in 1983 in Pasadena, CA, PRIMECAP Management (Trades, Portfolio) is an independent investment management company that focuses on U.S.-based equity portfolios for select institutions and mutual funds. The firm is renowned for its long-term investment approach, emphasizing individual decision-making, fundamental research, and a focus on value. PRIMECAP employs a multi-counselor investment model, allowing each portfolio manager autonomy over a distinct segment of each fund. The firm seeks to identify undervalued stocks with the potential to outperform the market over a three to five-year horizon, often targeting companies and industries currently out of favor. This strategy requires patience and conviction, as PRIMECAP waits for the market to recognize the value it has identified.

Summary of New Buy

PRIMECAP Management (Trades, Portfolio) added a total of six stocks to its portfolio during the fourth quarter of 2024. The most significant addition was AppLovin Corp (NASDAQ:APP), with 348,100 shares, accounting for 0.09% of the portfolio and valued at $112.73 million. The second largest addition was Spotify Technology SA (NYSE:SPOT), consisting of 219,800 shares, representing approximately 0.08% of the portfolio, with a total value of $98.33 million. The third largest addition was Expand Energy Corp (NASDAQ:EXE), with 574,518 shares, accounting for 0.04% of the portfolio and valued at $57.19 million.

Key Position Increases

PRIMECAP Management (Trades, Portfolio) also increased its stakes in a total of 53 stocks. The most notable increase was in GSK PLC (NYSE:GSK), with an additional 10,407,905 shares, bringing the total to 25,261,660 shares. This adjustment represents a significant 70.07% increase in share count, impacting the portfolio by 0.27%, with a total value of $854.35 million. The second largest increase was in Amazon.com Inc (NASDAQ:AMZN), with an additional 1,089,100 shares, bringing the total to 5,494,750. This adjustment represents a 24.72% increase in share count, with a total value of $1.21 billion.

Summary of Sold Out

PRIMECAP Management (Trades, Portfolio) completely exited 13 holdings in the fourth quarter of 2024. Notable exits include Southwestern Energy Co (SWN), with the sale of all 7,431,779 shares, resulting in a -0.04% impact on the portfolio. Another significant exit was Five Below Inc (NASDAQ:FIVE), with the liquidation of all 3,700 shares, causing a -0% impact on the portfolio.

Key Position Reduces

PRIMECAP Management (Trades, Portfolio) reduced its position in 242 stocks, with the most significant changes including a reduction in Eli Lilly and Co (NYSE:LLY) by 933,854 shares, resulting in a -5.28% decrease in shares and a -0.61% impact on the portfolio. The stock traded at an average price of $827.11 during the quarter and has returned 4.43% over the past three months and 12.30% year-to-date. Another notable reduction was in Amgen Inc (NASDAQ:AMGN) by 1,253,816 shares, resulting in an -8.8% reduction in shares and a -0.3% impact on the portfolio. The stock traded at an average price of $296.32 during the quarter and has returned -8.68% over the past three months and 13.07% year-to-date.

Portfolio Overview

As of the fourth quarter of 2024, PRIMECAP Management (Trades, Portfolio)'s portfolio included 329 stocks. The top holdings were 10.02% in Eli Lilly and Co (NYSE:LLY), 3.12% in Microsoft Corp (NASDAQ:MSFT), 2.7% in FedEx Corp (NYSE:FDX), 2.62% in Amgen Inc (NASDAQ:AMGN), and 2.55% in Boston Scientific Corp (NYSE:BSX).

The holdings are primarily concentrated in 11 industries: Technology, Healthcare, Industrials, Consumer Cyclical, Financial Services, Communication Services, Energy, Consumer Defensive, Basic Materials, Utilities, and Real Estate.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.