Spinnaker Trust Increases McDonald’s (MCD) Stake by 25.31%

Spinnaker Trust added to its position in McDonald’s Corporation (NYSE: MCD) during Q1 2019, purchasing 3,358 additional shares — a 25.31% increase over the prior quarter. According to its 13F regulatory filing with the SEC, the firm held 16,626 shares of MCD at the end of Q1 2019, valued at approximately $3.16 million, up from 13,268 shares the previous quarter.

The increased position signals continued bullish sentiment from Spinnaker Trust toward the fast-food giant. At the time of the filing, McDonald’s carried a market capitalization of approximately $163 billion. The stock had risen roughly 8.52% during the quarter and was up approximately 32.83% on a year-over-year basis from August 25, 2018, outperforming the S&P 500 over that same period.

In the most recent trading session referenced in the source data, MCD shares declined 2.20% (–$4.83), closing at $214.66, with approximately 3.66 million shares traded — roughly 23.39% above its average daily volume.

Notable McDonald’s Headlines (2018)

• McDonald’s announced plans to cut greenhouse gas emissions from its restaurants and offices by 36% (March 2018).
• The company reported that fresh beef advertising lifted sales across its full burger lineup.
• Breakfast was cited as representing 25–30% of daily sales and the most profitable daypart.
• McDonald’s committed to replacing plastic straws with paper straws across all UK locations starting May 2018.
• Comparable sales growth was reported in April 2018 results.

Spinnaker Trust Portfolio Context

Spinnaker Trust manages approximately $994.89 million in US long positions. Alongside its increased MCD stake, the firm made several reductions during Q1 2019:

• Healthcare Select Sector SPDR (XLV): Reduced by 34,310 shares to 359,919 shares, valued at approximately $33.02 million.
• Financial Select Sector SPDR (XLF): Cut by 75,696 shares, leaving a holding of approximately 1.06 million shares.
• Vanguard FTSE Developed Markets ETF (VEA): Stake reduced (specific share count not disclosed in source).

Night Owl Capital Management Trims Visa (V) Position by 5.54%

Night Owl Capital Management LLC reduced its exposure to Visa Inc. (NYSE: V) in Q1 2019, selling 11,888 shares — a 5.54% reduction. The hedge fund held 202,848 shares of Visa at the end of Q1 2019, valued at approximately $31.68 million, down from 214,736 shares in the prior reported quarter.

Despite the reduction, Visa’s stock rose 9.34% during the quarter. At the time of the source data, Visa held a market capitalization of approximately $392.59 billion. On the most recent trading session referenced, V shares fell 2.70% (–$4.86) to $175.23, with approximately 7.05 million shares traded — about 0.98% above average daily volume. Visa had gained approximately 30.42% year-over-year from August 25, 2018, outpacing the S&P 500 over that period.

Broad Institutional Sentiment on Visa in Q1 2019

Overall investor sentiment toward Visa edged slightly higher in Q1 2019. The aggregate sentiment score rose to 1.05, up from 1.00 in Q4 2018. While 49 investors exited Visa shares entirely and 631 reduced their holdings, 164 funds opened new positions and 551 raised their existing stakes. The total institutional share count fell to approximately 1.54 billion shares — down 4.83% from 1.62 billion in Q4 2018.

Selected institutional holders as of Q1 2019 included:

• Wellington Management Group LLP: Approximately 17.78 million shares
• First Republic Investment Management: Approximately 1.09 million shares (0.89% of portfolio)
• Bryn Mawr Trust: Approximately 134,958 shares (1.15% of portfolio)
• Jackson Square Partners LLC: 3.23% of portfolio in Visa
• Vision Capital Management: 2.28% of portfolio in Visa
• Mackenzie Financial Corporation: 0.88% of portfolio in Visa
• Sumitomo Life Insurance: Approximately 66,330 shares
• Brown Advisory Securities LLC: 2.16% of portfolio (58,822 shares)
• Carnegie Capital Asset Management: 0.83% of portfolio
• UMB Bank N.A. (MO): 46,648 shares (0.22% of portfolio)

Visa Earnings Outlook (as of August 2019)

Analysts at the time of the original filing anticipated Visa would report earnings around October 23, 2019. The consensus estimate called for earnings per share (EPS) of $1.43 — an 18.18% increase from the prior year’s $1.21. If achieved, this would represent approximately $3.20 billion in profit, implying a price-to-earnings ratio of roughly 30.63 at prevailing prices. Visa had reported actual EPS of $1.37 for the previous quarter, meaning Wall Street was then forecasting quarter-over-quarter EPS growth of approximately 4.38%.

Additionally, one insider purchase of approximately $171,130 was recorded for Visa between August 6, 2019 and the publication date, with no insider sales during the same period.

Recent Visa News Coverage (as of August 2019)

• Benzinga: “How To Open A Credit Card At 18” (July 31, 2019)
• Motley Fool: “Your Guide to the 10 Biggest Bank Stocks” (August 14, 2019)
• Seeking Alpha: “Buy Visa: Great Total Return And A Cash Machine” (August 2, 2019)
• Yahoo Finance: “Visa and J.P. Morgan Help Businesses Make Payments Faster with Billtrust’s Business Payments Network” (July 31, 2019)
• Seeking Alpha: “Load Up On Visa” (August 14, 2019)

Key Takeaways

• Spinnaker Trust’s increased MCD position reflects confidence in McDonald’s continued growth trajectory heading into mid-2019.
• Night Owl Capital Management’s modest trim of its Visa position does not necessarily indicate a bearish turn — the fund still held over 200,000 shares valued above $31 million.
• Visa’s broad institutional ownership base and strong year-over-year price performance underscore its status as a core holding for many large funds.
• Both MCD and V had meaningfully outperformed the S&P 500 in the year leading up to August 2019.

This article is based on Q1 2019 SEC 13F regulatory filings and market data as reported by stocksbeat.com. It is intended for informational purposes only and does not constitute investment advice.