4
Morningstar Analyst Rating
03-11-13
„
Morningstar Pillars
Process
Performance
People
Parent
Price
§
Positive
Negative
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
78.38
68.86
62.50
61.96
54.56
39.98
81.00
91.98
88.18
89.68
87.97
75.73
Total Return %
13.83
12.31
2.29
14.77
37.60
-49.57
0.05
15.28
-0.24
5.87
19.35
-5.50
+/-S&P 500
1.09
-3.69
0.18
-0.29
11.14
-12.57
-5.44
-0.51
-5.15
-5.01
-9.33
16.60
+/-Russ 1000
0.86
-4.11
0.79
-1.33
9.17
-11.97
-5.72
-0.18
-6.51
-5.53
-10.54
16.15
Income Return %
0.00
2.15
1.40
1.16
1.14
1.03
0.95
1.31
1.44
0.65
0.96
1.30
Capital Return %
13.83
10.16
0.89
13.61
36.46
-50.60
-0.90
13.97
-1.68
5.22
18.39
-6.80
Total Rtn % Rank Cat
15
81
16
33
10
97
92
33
96
98
96
2
Income $
0.00
1.34
0.87
0.63
0.46
0.84
0.87
1.09
1.29
0.57
0.73
1.09
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.02
10.15
8.01
0.00
2.81
1.62
2.11
Expense Ratio %
.
0.75
0.75
0.76
0.80
0.76
0.69
0.62
1.11
1.12
1.13
1.07
Income Ratio %
.
1.74
1.04
0.96
0.96
1.21
0.85
1.11
0.97
0.65
0.98
1.65
Turnover Rate %
.
6
15
3
15
7
25
63
13
16
25
48
Net Assets $mil
1,131
1,020
1,044
1,184
1,163
1,088
2,851
3,432
4,006
7,216
6,955
5,002
Performance
04-30-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-11.11 20.62 20.41 6.57 37.60
6.45 -9.64
9.24 9.23 14.77
6.57 1.41 -13.13 8.95
2.29
9.02 -3.68
4.78 2.07 12.31
12.61
. . . .
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500
1000
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
7.86 0.68
0.70
14 10,786
16.45 2.03
1.40
15 11,645
17.46 0.57
0.29
24 11,746
11.33 -1.47
-1.58
47 13,799
2.75 -2.46
-2.74
79 11,453
4.57 -3.31
-3.75
97 15,634
5.95 1.62
1.30
15 23,797
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
11.09
35
0.22
26
2.53
71
0.22
21
3.96
97
0.59
50
Potential Capital Gain Exposure: -5% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
17.46
3 Yr
11.33
Avg
-Avg
5 Yr
2.75
-Avg
+Avg
10 Yr
4.57
Low +Avg
Incept
11.54
Other Measures
Standard Index
Best Fit Index
S&P 500
M* U.S. Core TR
Alpha
0.2
-0.9
Beta
0.86
0.86
R-Squared
94
95
Standard Deviation
13.35
Mean
11.33
Sharpe Ratio
0.87
Morningstar’s Take
by Dan Culloton 03-11-13
Clipper Fund hasn’t fulfilled expectations, but still can.
The fund retains many of the attributes that first
earned it a Gold Analyst Rating. Its managers, Chris
Davis and Ken Feinberg, are seasoned and have
achieved success at other funds. The managers’
bottom-up, low-turnover approach produces distinctive
portfolios. Fees are reasonable and the managers
invest in their funds.
Yet despite recent improvement, the fund’s
performance has been inconsistent since Davis and
Feinberg took over. The ebb and flow of investment
styles has something to do with the lackluster
showing, but so do some self-inflicted wounds as well
as the portfolio s structure.
There have been notable mistakes. Sticking with
AIG and Merrill Lynch in 2008 hurt the fund more than
any other errors. Prior to this year, Canadian Natural
Resources CNQ, Hewlett-Packard HPQ, and Bank of
New York Mellon BK also detracted. Until recently,
taking a pass on Apple AAPL held the fund back.
Such misfires have a bigger impact at this fund. It
not only is concentrated, but unlike other successful
focused funds, it also stays fully invested. And while a
clutch of cash-generating stalwarts, such as American
Express AXP and Google GOOG, anchor the portfolio,
the fund has a huge financial sector stake and has
used its smaller asset base to invest in more illiquid
ideas, such as Oaktree Capital Group OAK, which the
fund bought before the money manager went public.
This leaves the fund prone to volatility, but its
patient, high-conviction style can still pay off. Indeed,
many of the stocks that have held the fund back in
recent years, including Canadian Natural Resources,
Bank of New York, and HP, have contributed to the
fund’s improved recent performance. There’s also
evidence corroborating the managers’ contention that
many of the fund’s holdings’ share prices don’t reflect
their business value: Nearly 60% of its assets are in
stocks that trade at or under Morningstar equity
analysts’ fair value estimates. The fund hasn’t lived up
to expectations, which takes its Analyst Rating from
Gold to Silver, but it still has potential.
Address:
Clipper Fund Inc
Tucson, AZ 85706
800-432-2504
Web Address:
Inception:
02-29-84
Advisor:
Davis Selected Advisers LP
Subadvisor:
Davis Selected Advisers (New York) Inc.
NTF Plans:
Fidelity Retail-NTF, CommonWealth NTF
Minimum Purchase:
$2500
Add: $25 IRA: $2500
Min Auto Inv Plan:
$2500
Add: $25
Sales Fees:
No-load
Management Fee:
0.55% mx./0.49% mn.
Actual Fees:
Mgt:0.55% Dist:
.
Expense Projections:
3Yr:$240
5Yr:$417 10Yr:$930
Income Distribution:
Annually
Data through April 30, 2013
Clipper
Ticker
Status Yield Total Assets
Mstar Category
CFIMX Open
1.7% $1,131 mil
Large Blend
81% 100% 98% 96% 99% 97% 99% 96%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 04-13
Historical Profile
Return
Risk
Rating
Below Avg
Above Avg
Below Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
5.0
12.5
15.5
Portfolio Analysis
12-31-12
Share change since 09-12 Total Stocks:26 Sector
PE Tot Ret% % Assets
American Express Co
Finan Svs 17.1 19.71 12.44
Berkshire Hathaway Inc C
Finan Svs 17.7 18.60 9.34
Costco Wholesale Corpora
Cnsmr Def 24.3 10.10 8.90
CVS Caremark Corp
Cnsmr Def 19.2 21.26 8.15
Loews Corporation
Finan Svs 31.3 9.93 7.04
Canadian Natural Resourc
Energy
17.3 2.05 6.86
Bank of New York Mellon
Finan Svs 13.9 10.89 6.53
Alleghany Corp DEL
Finan Svs
8.7 17.39 5.22
Oaktree Capital Group LL
Finan Svs 13.6 16.44 5.20
Google, Inc. Class A
Technology 23.8 16.57 4.18
Wells Fargo & Co
Finan Svs 11.3 11.85 2.73
Harley-Davidson Inc
Cnsmr Cyc 20.1 12.35 2.41
RHJ International
Finan Svs
. .
2.16
Microsoft Corporation
Technology 17.1 24.79 1.58
Ameriprise Financial Inc
Finan Svs 16.1 19.72 1.57
Texas Instruments, Inc.
Technology 24.0 18.81 1.48
Bed Bath & Beyond, Inc.
Cnsmr Cyc 15.7 23.05 1.44
Hewlett-Packard Co
Technology
.
45.49 1.28
Diageo PLC
Cnsmr Def
. .
1.25
Everest Re Group, Ltd.
Finan Svs
8.6 23.21 1.23
Current Investment Style
Market Cap %
Giant
49.7
Large
30.3
Mid
17.0
Small
3.0
Micro
0.0
Avg $mil:
34,271
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
13.22
1.38
1.14
7.03
1.06
0.96
0.70
0.93
0.12
0.48
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
10.63
7.79
2.22
9.12
5.48
1.02
1.46
0.70
1.32
0.74
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
13.38
4.37
11.20
0.69
0.56
0.88
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 63.24 2.20
BasicMat 0.00 0.00
. .
CnsmrCyc 4.03 0.47 9 4
FinanSvs 59.21 3.78 59 41
Real Est 0.00 0.00
. .
Sensitive 16.80 0.39
CommSrvs 0.00 0.00
. .
Energy 7.19 0.67 14 3
Industrl
0.00 0.00 8 2
Technlgy 9.61 0.55 16 6
Defensive19.96 0.72
CnsmrDef19.96 1.64 26 18
Hlthcare 0.00 0.00 5 1
Utilities 0.00 0.00
. .
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
3.8
Stocks 96.2
Bonds 0.0
Other
0.0
Foreign 13.4
©
2013Morningstar, Inc.All rights reserved. The information herein is not representedorwarranted to be accurate, correct, complete or
timely. Past performance isnoguaranteeof future results.Accessupdated reportsat
Toorder reprints, call312-696-6100.
mfb.morningstar.com.
Mutual Funds
ß
®
EQ
