Tweedy Browne's Q2 2025 Portfolio Shifts: A Case for Rebalancing in Global Value Opportunities

In Q2 2025, Tweedy Browne Co All Funds (US) executed a series of strategic portfolio adjustments that underscore its commitment to value investing. By trimming stakes in CNH Industrial, Ionis Pharmaceuticals, and Coca-Cola FEMSA, the firm signaled a nuanced approach to rebalancing its holdings in favor of undervalued, long-term opportunities. For income-focused and contrarian investors, these moves offer a roadmap to identify high-conviction stocks where fundamentals align with disciplined capital allocation.

CNH Industrial: Navigating Cyclical Headwinds with Operational Resilience

Tweedy Browne reduced its position in CNH Industrial (CNH) by 0.18%, maintaining a 14.6% portfolio weight. Despite a 14% year-over-year revenue decline due to weak industrial demand, the company's operational discipline and free cash flow generation remain compelling. CNH's Q2 2025 results highlighted $451 million in free cash flow, driven by cost-cutting measures and a 1.5% price appreciation from its average buy price of $11.28.

The firm's trailing P/E ratio of 10.5 and PEG ratio of 0.9 suggest it is trading at a discount to its growth potential. Analysts at UBS and Citigroup have upgraded their price targets, citing CNH's strategic investments in electrification and its ability to weather cyclical downturns. For contrarian investors, the trimming reflects Tweedy Browne's confidence in CNH's long-term value, particularly as global infrastructure demand rebounds.

Coca-Cola FEMSA: A Dividend Powerhouse in a Diversified Market

Tweedy Browne's 5.24% reduction in Coca-Cola FEMSA (KOF) left the stock at 9.9% of its portfolio. FEMSA's Q2 2025 results, while mixed, revealed a resilient business model. The company reported $3.74 billion in revenue and a 3.88% dividend yield, supported by a sustainable payout ratio of 13.93%. Its geographic diversification—spanning Mexico, Brazil, and Argentina—acts as a buffer against localized economic risks.

With a trailing P/E of 14.91 and a PEG ratio of 0.86, FEMSA appears undervalued relative to its projected 20.53% earnings growth. UBS and Citigroup have raised price targets to $113 and $102, respectively, reflecting optimism about its digital engagement initiatives and capital expenditures. Tweedy Browne's trimming here may indicate a strategic shift to lock in gains while maintaining exposure to a high-quality, income-producing asset.

Ionis Pharmaceuticals: A High-Conviction Play in RNA Innovation

Tweedy Browne's 3.07% reduction in Ionis Pharmaceuticals (IONS) occurred despite the stock's 24% price surge in Q2 2025. The company's Q2 results were transformative: revenue jumped 100.9% year-over-year to $452 million, driven by $337 million in collaborative agreements and $19 million in product sales from TRYNGOLZA. Ionis also raised its 2025 guidance to $825–$850 million in revenue, with a $2.3 billion cash balance providing flexibility for growth.

Despite the trimming, Ionis's valuation remains attractive. A fair value estimate of $58.19 per share—40% above its current price—suggests the market is underappreciating its pipeline of RNA-targeted therapies. Key catalysts, including FDA approval of donidalorsen for hereditary angioedema and Phase 3 data for olezarsen, could drive further upside. Tweedy Browne's move here may reflect a tactical rebalancing rather than a lack of conviction, positioning the fund to capitalize on future milestones.

The Bigger Picture: Rebalancing for Long-Term Value

Tweedy Browne's Q2 2025 adjustments highlight a disciplined approach to value investing. By trimming overperforming stocks like Alphabet and Johnson & Johnson while increasing stakes in Berkshire Hathaway, the firm prioritizes undervalued, income-producing assets. For investors, this strategy underscores the importance of focusing on companies with durable competitive advantages, strong balance sheets, and long-term growth potential.

Investment Takeaway:
- CNH Industrial and Coca-Cola FEMSA offer compelling value for income investors, with robust dividends and defensive business models.
- Ionis Pharmaceuticals represents a high-conviction play in innovation-driven biotech, where Tweedy Browne's trimming may signal a strategic entry point for contrarians.
- Diversification across sectors and geographies, as seen in Tweedy Browne's portfolio, remains key to mitigating risk while capturing long-term value.

In a market increasingly dominated by speculative trends, Tweedy Browne's Q2 2025 shifts reaffirm the enduring appeal of value investing. For those willing to look beyond short-term volatility, these moves point to a portfolio of companies poised to deliver steady returns in the years ahead.