John W. Rogers Portfolio: Check Out His Market Crushing Returns

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Predrag Shipov
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John W. Rogers Portfolio

Not only a veteran of value investing, John W. Rogers is also the first founder and chairman of today's largest minority-run mutual fund. Rogers started his company, Ariel Investments LLC in 1983 with only $10 thousand in seed money. Today Roger’s portfolio has 114 holdings valued at $10.04 billion.

Among his top holdings are Jones Lang LaSalle Inc. (NYSE:JLL), Mattel (NASDAQ:MAT), Generac Holdings Inc. (NYSE:GNRC), and Carlyle Group Inc. (NASDAQ:CG). Recent significant increases include Generac Holdings and Check Point Software Tech. Regarding trimmings noteworthy are those of Resideo Technologies Inc, and Lazard Ltd.

Rogers is known for his keen eye for companies traded below their intrinsic value. However, he looks for other factors besides value, like positive ESG practices. The impact that he has had on the investing community is significant and overall positive, and among other honors, he received Princeton University’s highest honor Woodrow Wilson Award.

Key Takeaways from His Portfolio

  • Rodgers is the owner and chief investment officer of the largest minority-owned investment company.
  • He founded Ariel Investments in 1983 and since then almost constantly outperformed the S&P 500 index.
  • Ariel Investments currently has $10 billion in assets under management, spanning over 114 holdings.
  • Rogers' strategy is infused with a combination of value investing and social responsibility.

Key Holdings

Jones Lang LaSalle Inc. (NYSE:JLL) with 2.96% of the portfolio

A global real estate management company has been a part of Roger’s portfolio for over a decade. Currently, he owns 1.58 million shares valued at $290 million. The average buying price of the stock is $111, while its value in the meantime jumped to $184. In 2023 Rogers increased this position by acquiring almost 280 thousand stocks.

Mattel (NASDAQ:MAT) with 2.91% of the portfolio

This giant in the toy manufacturing sector is another old find, dating to 2015. The current size and value of the portfolio is 15.5 million shares at $285 million, making Rogers the second-largest stakeholder. He’s been buying their stock at $18.6 on average, while its current price is $18.4. In late 2023 Rogers trimmed the holding for about a million stocks. The investment is yet to bear fruit since Rogers invested $289 million, and the value of the holding is $285 million.

Generac Holdings Inc. (NYSE:GNRC) with 2.78% of the portfolio

Rogers acquired Generac stocks in 2022 buying at an average price of $135. His fund currently owns 2.16 million shares valued at $278 million. Rogers invested into the holding a total of $292 million resulting in a loss of 4.6%.

Carlyle Group Inc. (NASDAQ:CG) with 2.59% of the portfolio

A relatively new part of Rogers's portfolio is Carlyle, a global player in the alternative asset management industry. He constantly increased his position reaching his current 6.39 million shares with a value of $259 million. The average buying price was $29.4 while the value increased in 2024 reaching $40. Investment in this holding is measured at $188 in comparison to its value it generated a gain of 38%.

Charles River Laboratories International (NYSE:CRL) with 2.47% of the portfolio

One of the constant and long-time parts of Rogers's portfolio is also one of the most lucrative. This pharmaceutical company focused on preclinical and clinical laboratory, gene, and cell therapy and delivered a gain of 168%. Over the years Rogers invested $90.2 million, while the value grew to $242 million. The company’s stock peak price was in late 2021 but it is higher than the value Rogers invested. In 2023 he increased his position for an additional 415 thousand stocks.

Kennametal Inc. (NYSE:KMT) with 2.42% of the portfolio

Kennametal, a supplier and manufacturer of tools and industrial materials hasn’t been the hit an investor would hope to get. Rogers $335 invested millions today are valued at $227 generating a loss of 32%. An average buying price was at $35.6 while its value has been slowly dropping to $24. He did trim this holding in 2023 by 1.1 million stocks trying to limit his losses.

Resideo Technologies Inc. (NYSE:REZI) with 2.37% of the portfolio

Manufacturer of security and home automation systems has still to deliver gains to the Rogers portfolio. He started buying their stocks in 2021 at $29, while its value in the meantime dropped to $19.70. Rogers owns 12.7 million shares with a value of $250 million, while he invested a total of $311 million. In late 2023 he trimmed the holding by selling 1.45 million shares.

Lazard Ltd (NYSE:LAZ) with 2.35% of the portfolio

Rogers is the biggest stake owner of this financial advisory firm based in New York, and so far it generated a gain of 2.8%. He owns 6.77 million shares valued at $266 million, while he invested $259 million. After a plunge in 2023, the stock regained some value in 2024 reaching the present $39. Since the stock lost roughly 30% of its value in early 2022 he has been slowly decreasing this holding by selling almost 2 million shares.

First American Financial Corp (NYSE:FAF) with 2.35% of the portfolio

Rogers's 3.66 million shares stake in the First American is valued at $198 million while he invested over a decade $109 million. This deal delivered a gain for Rogers investors of 82%. A Rogers average buying price was $29.7 while the value of the stock rose to $54. In 2023 stock has gone to some higher values reaching $64, but in 2024 it is on a slow decline.

Madison Square Garden Entertainment Corp (NYSE:MSGE) with 2.28% of the portfolio

An American entertainment holding company founded in 2020 has been part of Rogers's portfolio since its inception. Recently, he advised investors to take a look at the company, forecasting its great potential. From the latest 13F filing he owns 7.21 million stocks, but according to new reports he bought an additional 946 thousand shares. From the latest filing, this holding is valued at $229 million. In mid-2023 the stock lost half of its value dropping from $60 to $30, managing to regain some of its value rising to $40.

Sector Allocation

Ariel Investments portfolio is well-diversified among all crucial sectors, with a focus on the Consumer Discretionary and Finance industries. Their current sector allocation is:

  1. Consumer Discretionary with 36.3% of the portfolio valued at $3.63 billion
  2. Finance with 23.2% of the portfolio valued at $2.32 billion
  3. Healthcare with 10.5% of the portfolio valued at $1.05 billion
  4. Industrials with 9% of the portfolio valued at $900 million
  5. Technology with 8.84% of the portfolio valued at $840 million
  6. Energy with 2.61% of the portfolio valued at $261 million
  7. Consumer Staples with 2.2% of the portfolio valued at $220 million
  8. Utilities with 2.17% of the portfolio valued at $217 million
  9. Real Estate with 1.86% of the portfolio valued at $186 million.

Biography of John W. Rogers

John Rogers was born in Chicago as an only son to Jewel Lafontant, the first female deputy solicitor general, and John W. Rogers Senior, a fighter pilot and a judge.

Rogers graduated in economics from Princeton in 1980. While he was still in university he showed interest in investing. He spent a lot of time at a local stock brokerage where he was influenced by the works of Burton Malkiel.

After graduation, he worked at Willian, Blair & Co. In it, he gathered experience and knowledge and in 1983 he opened his investment firm Ariel Investments. His seed money was just $20 thousand from his family and friends, but that proved more than enough to build a financial empire.

Impact on the Financial Industry

Rodgers managed to combine an innovative approach to investing with a solid track record. That is not easy to achieve in the investment world where innovations can take a bad turn resulting in major losses. To achieve that type of career is a success of its own.

Another cornerstone of his strategy, a focus on underrepresented markets, shed some light on the innovativeness and courage of his strategy. His steps in this direction encouraged many notable investors to seek out opportunities in markets that they would most likely overlook.

From his career beginnings, he was active in promoting social responsibilities, and breaking barriers for those unrepresented. He is the chief investment officer of the largest minority-owned investment company in the United States, representing a role model to many.

Leadership & Recognition

Rogers showed glimpses of vision from an early age. Quickly after graduation, he saw a gap in the market for minority-owned investment firms. He made the first steps and provided help and advice for many that followed.

He regained his initial stance of promoting the importance of social responsibility in investing. Besides value investing, his core principles are choosing companies with strong ESG standards.

After the election of President Barack Obama, he served as co-chair of the Barack Obama Foundation’s Board. Later he joined the Barack Obama Foundation’s Board of Directors.

He received a Woodrow Wilson Award from Princeton University in 2008 for his services across different communities. In 2022 he was presented with the CED Distinguished Leadership Award issued by the Conference Board.

John W. Rogers Investment Philosophy & Strategies

Two cornerstones of Rogers's investment strategy are value investing and social responsibility. He was recognized as one of the best money managers of the generation compared to Warren Buffett and John Templeton.

Regarding his value investing strategy, in the mold of every successful value investor, he is focused on finding undervalued businesses with a potential for growth. Once he calculates the intrinsic value of the company, he is waiting for it to drop in value. His initial investment is aimed at 40% below the intrinsic value.

To achieve it he perfected the fundamental analysis. Determining the intrinsic value is the first and most important step. By going through economic indicators, competitive landscape, and future outcomes, he makes careful pics. Before he commits he likes to know where the business can be in a period of three to seven years.

His favorite pics are high-quality companies often found in the mid-cap sector. It has to possess a solid economic moat with developed competitive advantages. Management also plays an important role when making investment decisions. Rodgers and his team spend a lot of time evaluating its track record, and ethical standards.

Rodgers is also known as a contrarian and disciplined investor. He avoided following the crowd both during the internet bubble and again in 2008.

John W. Rogers Portfolio Performance Analysis

Historical Performance

Ariel Investment has delivered positive returns often outperforming the S&P 500 index. However, it did have its bad spells, particularly between 2014 and 2019, and 2004 and 2008.

When we look at cumulative gains since 1989 the fund is massively outperforming the benchmark index. In that period the fund generated a gain of 2618% while the S&P 500 managed to reach 1598%.

In the last ten years that success tinned out since the fund was outperformed by the index. Ten-year cumulative gain for the fund is 106% and the index was 158%. Out of the last 10 years, the fund outperformed the index on only three occasions. In 2023 Rogers fund delivered 15.81% in comparison to the index's return of 24.23%.

Notable Success

  • Microsoft Holding

Microsoft is an important part of Rogers's portfolio with a weighting of 1.38%. His average buying price was $47.4 but the stock gained almost 10 times in value. Rogers invested $17.4 million into the holding, while its value skyrocketed to $146 million generating a gain of 740%.

  • ARC Document Solutions Holding

Rogers exited from the holding in 2014 but not before earning more than solid gains. He was buying their stocks for $3 on average, while he sold the majority of stocks at $9.5.

  • Lockheed Martin Holding

Lockheed Martin is a micro holding in his portfolio, but in spite of that Rogers made it work exceptionally. His small stake valued at $1.64 million increased to a solid $6.29 million producing a 283% gain for the investors.

Notable Failure

  • Contango Oil & Gas Company Holding

Rodgers exited from a once-prospective company in 2018. He started big in 2013 buying more than 3 million shares at prices between $40 and $45. He continued to pile up the stocks at lower prices in a range between $40 and $10. During the next three years, he completely exited from the holding selling below $8.

  • Acacia Research Corp Holding

Between 2013 and 2016 Rogers kept buying Acacia stock at an average price of $12.8. In 2017 things took a turn for the worse and the stock price fell to below $5. A major part of the holding containing 1.5 million shares was sold at $3.5.

Legacy and Future Outlook

Rodgers already is a widely known name even outside the closed-off investment world. His fight for equality and representation is well-known, especially in the minority groups. Rodgers managed to combine his vision and activism with exemplary investment results that spanned over several decades.

Although his fund didn’t deliver the expected results in the last couple of years, his track record is still strong.

Recently he expressed that the interest in AI companies will drop, while he points out the potential in small and mid-cap companies. He also noted that the market is ready for correction mostly due to the stocks from the Magnificent Seven.

Final Thoughts

John W. Rogers came from a family of pioneers. His father was a military pilot in World War II, while his mother was the first black woman to finish law school at the University of Chicago.

After graduating from Princeton he quickly founded his own company with all the help he could get from family and friends. Help was modest in numbers, but nonetheless, he managed to create a major player in the investment world.

But, he never intended to stop there. Rodgers is still a bright light and a role model for individuals from marginalized groups. His philanthropic work is focused on education by donating to the University of Chicago, and to economic empowerment of black and brown communities.