Auxier Asset Management

#### I. Institutional Overview Jeff Auxier, the founder and president of Auxier Asset Management, is a seasoned investment professional whose philosophy is deeply rooted in the principles of value investing, capital preservation, and long-term compounding. The 13F report for the fourth quarter of 2025 provides a transparent window into the current state of the Auxier Focus Fund and the broader management strategy of the firm. With a reported portfolio value of **$702,866,455** and a total of **174 holdings**, Auxier Asset Management represents a sophisticated "boutique" institutional approach that prioritizes high-conviction quality over sheer volume, yet maintains enough diversification to weather idiosyncratic market shocks. Analyzing the scale of the institution through the lens of its **$702.87M** AUM (Assets Under Management), we observe a firm that operates in the "sweet spot" of institutional investing. Unlike mega-funds managing hundreds of billions, Auxier has the agility to enter and exit positions without causing massive market impact, yet possesses enough capital to command institutional-grade research and access. The portfolio's composition, featuring 174 stocks, suggests a dual-layered strategy. On one hand, there is a clear concentration in "ballast" stocks—large-cap, cash-flow-positive entities that form the bedrock of the fund. On the other hand, the high number of total holdings indicates a "long tail" of smaller, perhaps exploratory or niche value positions that provide incremental alpha or specific sector exposure. The psychological portrait of Jeff Auxier, as derived from this data, is one of a **"Prudent Compounder."** A significant portion of the top holdings have been in the portfolio for over a decade (marked as ">10 Years" or since 2013). This level of patience is rare in an era of high-frequency trading and quarterly performance chasing. It suggests that Auxier views stocks not as mere tickers, but as fractional ownership in businesses. His willingness to hold through multiple market cycles—including the volatility of the early 2020s and the shifting interest rate environments leading into 2025—demonstrates a high degree of emotional discipline and a focus on fundamental business durability rather than price momentum. Furthermore, the concentration analysis reveals a deliberate approach to risk. While 174 stocks might seem diversified, the top-heavy nature of the portfolio (with Microsoft alone accounting for 6.68%) shows that Auxier is not afraid to place heavy bets when he has high conviction. The institution’s style can be characterized as **"Concentrated Value with a Diversified Safety Net."** This quarter’s activity, which includes a mix of tactical trimmings in tech giants and strategic additions in e-commerce and insurance, reflects a manager who is constantly fine-tuning the balance between growth-oriented "quality" and defensive "value." In summary, Auxier Asset Management enters the end of 2025 with a robust, battle-tested portfolio. The firm’s scale is stable, its philosophy remains steadfastly long-term, and its psychological disposition is one of cautious optimism—protecting the downside through staples and healthcare while participating in the upside of dominant technology and financial platforms. This report will further dissect how these traits manifest in specific sector rotations and individual stock selections. #### II. Sector Allocation Analysis The sector allocation of Auxier Asset Management in Q4 2025 reveals a masterclass in defensive positioning balanced with cyclical exposure. By examining the distribution of the **$702.87M** portfolio, we can infer the institution's macro outlook and its "track selection" for the coming year. | Sector | Weight (%) | | :--- | :--- | | **Financials** | 22.40 | | **Consumer Staples** | 20.73 | | **Healthcare** | 18.21 | | **Technology** | 13.15 | | **Consumer Discretionary** | 7.91 | | **Communication Services** | 7.03 | | **Industrials** | 4.77 | | **Energy** | 3.83 | | **Materials** | 1.61 | | **Real Estate** | 0.37 | **2.1 Concentration and Macro Judgment** The top three sectors—**Financials (22.40%)**, **Consumer Staples (20.73%)**, and **Healthcare (18.21%)**—collectively account for **61.34%** of the total portfolio. This is a remarkably high concentration in "Old Economy" and defensive sectors. A weight exceeding 60% in these three areas indicates a "Value-First" mandate. It suggests that Jeff Auxier is prioritizing businesses with tangible assets, recurring revenue, and strong pricing power over speculative growth. The heavy tilt toward **Financials** (the largest sector) is a significant macro signal. In an environment where interest rates may have stabilized or are in a "higher for longer" plateau, financials—particularly banks like BNY Mellon (BK) and Bank of America (BAC)—often benefit from healthy net interest margins. Moreover, the inclusion of insurance giants like Aflac (AFL) and Travelers (TRV) provides a hedge against inflation, as these firms can adjust premiums and benefit from higher yields on their float. **2.2 The Defensive Moat: Staples and Healthcare** With over **38%** of the portfolio in **Consumer Staples** and **Healthcare**, Auxier is clearly building a "fortress" against potential economic downturns or market volatility. * **Consumer Staples (20.73%)**: This sector is the ultimate defensive play. Holdings like Philip Morris (PM), Kroger (KR), and Walmart (WMT) represent essential consumption. Regardless of the macro environment, consumers continue to buy groceries and nicotine products. Auxier’s high allocation here suggests a belief that "certainty of cash flow" is currently undervalued by the broader market, which might be overly focused on AI-driven growth. * **Healthcare (18.21%)**: This allocation reflects a play on secular demographic trends—specifically the aging global population. Companies like UnitedHealth (UNH), Johnson & Johnson (JNJ), and Medtronic (MDT) are "toll-booth" businesses in the healthcare ecosystem. They possess massive R&D moats and essential services that are relatively price-inelastic. **2.3 Technology and Growth: Selective Participation** At **13.15%**, **Technology** is a significant but secondary component of the portfolio. This is a sharp contrast to many institutional peers who might have 30-40% in Tech. Auxier’s approach to Tech is "Quality at a Reasonable Price" (QARP). He isn't chasing unprofitable SaaS companies; instead, he holds dominant platforms like Microsoft (MSFT) and Alphabet (GOOGL). The fact that Tech is only the fourth-largest sector indicates a disciplined refusal to overpay for growth, even in a bull market. **2.4 Sector Rotation and Industry Trends** A subtle but important trend is the **7.91%** allocation to **Consumer Discretionary**. This quarter saw a massive 51% increase in the Amazon (AMZN) position. This suggests a tactical shift: while the core of the portfolio remains defensive, Auxier is identifying specific opportunities where "Growth" has become "Value." Amazon’s transition from a high-spending growth phase to a high-margin services (AWS/Advertising) phase likely fits Auxier’s criteria for a durable compounder. The minimal exposure to **Real Estate (0.37%)** and **Materials (1.61%)** is also telling. It suggests a lack of confidence in interest-rate-sensitive property markets and a preference for "capital-light" or "high-margin" businesses over capital-intensive commodity plays. **2.5 Macroeconomic Inference** Based on this allocation, we can infer that Auxier Asset Management is positioning for a **"Late-Cycle" or "Stagflationary" environment.** The heavy emphasis on Staples and Healthcare protects against a slowdown, while the Financials allocation captures yield. The selective Tech exposure ensures the fund isn't left behind by digital transformation, but the overall structure is designed to win by "not losing"—a classic value investor's hallmark. #### III. Top 10 Holdings Deep Dive The top 10 holdings of Auxier Asset Management represent the "ballast stones" of the portfolio, accounting for a substantial portion of the total AUM. These positions reflect the manager's highest-conviction ideas and the core of his investment ---