N-Q 1 d395152dnq.htm SEQUOIA FUND, INC. Sequoia Fund, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number        811-01976            

                                         Sequoia Fund, Inc.                                    

(Exact name of registrant as specified in charter)

9 West 57th Street, Suite 5000

                                   New York, NY 10019                                      

(Address of principal executive offices) (Zip code)

David M. Poppe

Ruane, Cunniff & Goldfarb Inc.

9 West 57th Street

Suite 5000

            New York, NY 10019            

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 686-6884

Date of fiscal year end: December 31, 2017

Date of reporting period: March 31, 2017

Item 1. Schedule of Investments.

The Schedule of Investments is attached herewith.

Sequoia Fund, Inc.

Schedule of Investments

March 31, 2017

(Unaudited)

(Percentages are of the Fund’s Net Assets)

Common Stocks (90.6%)

 

Shares

        Value
 

Advertising (1.8%)

     
854,302    

Omnicom Group Inc

      $ 73,649,375
      

 

 

  
 

Aerospace/Defense (3.9%)

     
17,196,077    

Rolls-Royce Holdings plc (United Kingdom)

        162,448,688
      

 

 

  
 

Application Software (4.6%)

     
388,766    

Constellation Software, Inc. (Canada)

        191,043,036
      

 

 

  
 

Auto Parts (4.8%)

     
736,697    

O’Reilly Automotive, Inc. (a)

        198,790,319
      

 

 

  
 

Automotive Retail (4.8%)

     
3,364,893    

Carmax, Inc. (a)

        199,268,964
      

 

 

  
 

Construction & Engineering (2.7%)

     
2,043,163    

Jacobs Engineering Group Inc.

        112,946,051
      

 

 

  
 

Dental Equipment (5.2%)

     
3,435,757    

Dentsply Sirona, Inc.

           214,528,667
      

 

 

  
 

Diversified Banks (2.5%)

     
1,864,956    

Wells Fargo & Co.

        103,803,452
      

 

 

  
 

Diversified Companies (12.8%)

     
1,477    

Berkshire Hathaway, Inc.-Class A (a)

        369,028,450
967,754    

Berkshire Hathaway, Inc.-Class B (a)

        161,305,237
      

 

 

  
         530,333,687
      

 

 

  
 

Diversified Financial Services (1.7%)

     
363,020    

Credit Acceptance Corp. (a)

        72,389,818
      

 

 

  
 

Electrical & Mechanical Systems (1.1%)

     
710,252    

EMCOR Group, Inc.

        44,710,363
      

 

 

  
 

Flooring Products (2.9%)

     
530,213    

Mohawk Industries, Inc. (a)

        121,678,581
      

 

 

  
 

Healthcare (0.3%)

     
185,274    

Perrigo Company plc (Ireland)

        12,300,341
      

 

 

  
 

Healthcare Equipment (1.4%)

     
699,145    

Danaher Corporation

        59,797,872
      

 

 

  

 

1

Sequoia Fund, Inc.

Schedule of Investments (Continued)

March 31, 2017

(Unaudited)

 

Shares

        Value
 

Industrial & Construction Supplies (2.1%)

     
1,674,003    

Fastenal Company

      $ 86,211,155
      

 

 

  
 

Information Processing (7.2%)

     
2,673,766    

MasterCard, Inc.-Class A

        300,718,462
      

 

 

  
 

Internet Retail (1.2%)

     
57,681    

Amazon.com, Inc. (a)

        51,136,514
      

 

 

  
 

Internet Services (2.0%)

     
46,423    

The Priceline Group, Inc. (a)

        82,631,547
      

 

 

  
 

Internet Software & Services (6.0%)

     
148,518    

Alphabet, Inc.-Class A (a)

        125,913,560
148,928    

Alphabet, Inc.-Class C (a)

        123,544,712
      

 

 

  
            249,458,272
      

 

 

  
 

Investment Banking & Brokerage (3.2%)

     
3,246,316    

The Charles Schwab Corp

        132,482,156
      

 

 

  
 

Movies & Entertainment (3.7%)

     
51,019    

Liberty Media Corp-Liberty Formula One - Series A (a)

        1,668,321
4,692,340    

Liberty Media Corp-Liberty Formula One - Series C (a) (b)

        152,547,973
1,203    

Liberty Media Corp-Liberty Formula One - Series C (a)

        41,082
      

 

 

  
         154,257,376
      

 

 

  
 

Precision Instruments (2.9%)

     
770,699    

Waters Corp. (a)

        120,467,961
      

 

 

  
 

Property and Casualty Insurance (1.5%)

     
4,620,562    

Hiscox Ltd. (Bermuda)

        63,332,642
      

 

 

  
 

Restaurants (2.2%)

     
209,996    

Chipotle Mexican Grill, Inc. (a)

        93,557,418
      

 

 

  
 

Retailing (6.6%)

     
3,456,803    

TJX Companies, Inc.

        273,363,981
      

 

 

  
 

Specialty Chemicals (1.5%)

     
1,356,950    

Croda International plc (United Kingdom)

        60,592,242
      

 

 

  
 

Total Common Stocks (Cost $1,751,152,575)

        3,765,898,940
      

 

 

  

 

2

Sequoia Fund, Inc.

Schedule of Investments (Continued)

March 31, 2017

(Unaudited)

 

 

Principal
Amount

        Value
Corporate Bond (1.0%)     
 

Application Software (1.0%)

     
49,402,900    

Constellation Software, Inc. (Canada)

     
 

7.90%, 3/31/2040

      $ 42,867,155  
      

 

 

  
 

Total Corporate Bond

(Cost $41,893,248)

        42,867,155
      

 

 

  
U.S. Government Obligations (6.0%)     
250,000,000    

United States Treasury Bill, 0.745%
due 04/27/2017

        249,868,194
      

 

 

  
 

Total U.S. Government Obligations

(Cost $249,868,194)

        249,868,194
      

 

 

  
 

Total Investments (97.6%)

(Cost $2,042,914,017)††

        4,058,634,289
 

Other Assets Less Liabilities (2.4%)

        99,395,908
      

 

 

  
 

Net Assets (100.0%)

      $ 4,158,030,197  
      

 

 

  

 

 

††

The cost for federal income tax purposes is identical. At March 31, 2017, the aggregate gross tax basis unrealized appreciation and depreciation of securities were $2,039,113,748 and $23,393,476, respectively.

 

  (a)

Non-income producing security.

 

  (b)

Restricted security valued in accordance with procedures approved by the Fund’s Board of Directors. The value of this security totals $152,547,973, representing 3.7% of the Fund’s net assets. Information related to this security is as follows:

 

Issuer

    Shares      Acquisition Date      Acquisition Cost      03/31/2017
Carrying Value
Per Unit		  

Liberty Media Corp.-

            

Liberty Formula One-Series C

      4,692,340        January 23, 2017        $117,308,500        $32.51  

Notes to Schedule of Investments (Unaudited)

Securities traded on a national securities exchange are valued at the last reported sales price on the principal exchange on which the security is listed; securities traded in the NASDAQ Stock Market (“NASDAQ”) are valued in accordance with the NASDAQ Official Closing Price. Securities for which there is no sale or Official Closing Price are valued at the mean of the last reported bid and asked prices.

 

3

Sequoia Fund, Inc.

Schedule of Investments (Continued)

March 31, 2017

(Unaudited)

 

Securities traded on a foreign exchange are valued at the closing price on the last business day of the period on the principal exchange on which the security is primarily traded. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the New York Stock Exchange on the date of valuation.

U.S. Treasury Bills with remaining maturities of 60 days or less are valued at their amortized cost. U.S. Treasury Bills that when purchased have a remaining maturity in excess of 60 days are valued on the basis of market quotations and estimates until the sixtieth day prior to maturity, at which point they are valued at amortized cost. Fixed-income securities, other than U.S. Treasury Bills, are valued at the last quoted sales price or, if adequate trading volume is not present, at the mean of the last bid and asked prices.

When reliable market quotations are insufficient or not readily available at time of valuation or when Ruane, Cunniff & Goldfarb Inc. (the “Investment Adviser”) determines that the prices or values available do not represent the fair value of a security, such security is valued as determined in good faith by the Investment Adviser, in conformity with guidelines adopted by and subject to review by the Fund’s Board of Directors.

Generally accepted accounting principles establish a disclosure hierarchy that categorizes the inputs to valuation techniques used to value the investments at measurement date. These inputs are summarized in the three levels listed below:

 

Level  1

  

 –

  

 unadjusted quoted prices in active markets for identical securities

Level 2

  

–

  

other significant observable inputs (including, but not limited to, quoted prices for similar securities, interest rates, prepayment speeds and credit risk)

Level  3

  

 –

  

 unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers between levels are recognized at the end of the reporting period. During the three months ended March 31, 2017, there were no transfers into or out of Level 1 or 2 measurements in the fair value hierarchy. There were no Level 3 securities held by the Fund during the three months ended March 31, 2017.

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of March 31, 2017:

 

     Common Stocks      Corporate Bond      U.S. Government
Obligations		      Total  

Level 1 - Quoted Prices

    $ 3,613,350,967      $ —              $ —              $ 3,613,350,967  

Level 2 - Other Significant Observable Inputs

      152,547,973        42,867,155        249,868,194        445,283,322  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 3,765,898,940      $ 42,867,155      $ 249,868,194      $ 4,058,634,289  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

4

Item 2. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

  (b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)

  

      Sequoia Fund, Inc.

 

By (Signature and Title)

  

    /s/ David M. Poppe

 

         David M. Poppe, President and CEO

 

         (principal executive officer)

 

Date

       May 22, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)

  

    /s/ David M. Poppe

 

         David M. Poppe, President and CEO

 

         (principal executive officer)

 

Date

       May 22, 2017

 

By (Signature and Title)

  

    /s/ Paul J. Greenberg

 

         Paul J. Greenberg, Treasurer

 

         (principal financial officer)

 

Date

       May 22, 2017