Nick Train's Q3 2026 13F Analysis: Capital Allocation, Intrinsic Valuation, and Track Record

During the third quarter of 2026, veteran investor Nick Train of Lindsell Train acted as a net seller within his firm's reported US equity portfolio, liquidating a net ~$255.4 million by trimming 17 existing positions—most notably Thermo Fisher Scientific (-24%), Alphabet (-12%), and Walt Disney (-12%)—while aggressively expanding the firm's stake in KKR & Co. (+48%). For value-minded, long-term investors, this capital realignment reflects a disciplined portfolio pruning process: taking profits on businesses trading above or near their intrinsic values to reallocate capital without straying from Lindsell Train's core philosophy of holding durable, cash-generative franchises.

1. The Investor: Philosophy, Fund, and Lifetime Work#

Nick Train co-founded London-based investment manager Lindsell Train in 2000 alongside Michael Lindsell. Among his primary mandates, Train manages the Finsbury Growth & Income Trust. Classified under the "value" investment style by DeepValues Research, Train’s approach centers on purchasing a concentrated portfolio of exceptionally durable, cash-generative businesses—primarily focusing on premium global brands, dominant data platforms, and critical software systems—and holding them across multi-year horizons with ultra-low portfolio turnover.

Investors evaluating Form 13F filings must recognize their inherent scope limitations. A 13F filing captures only Lindsell Train’s US-listed long equity holdings—led by positions in Alphabet, TKO Group, Thermo Fisher Scientific, Walt Disney, and Fair Isaac—while omitting the firm's substantial holdings listed in the UK and other international markets. As of June 30, 2026 (Q2 end), Lindsell Train’s reported US 13F equity holdings totaled approximately $2.6 billion.

2. The Portfolio at Quarter End: Size, Concentration, and Core Holdings#

As of September 30, 2026 (Q3 end), Lindsell Train’s reported US long equity portfolio was valued at $2.36 billion spread across 28 positions, representing a decrease from $2.63 billion across 28 positions at the close of Q2 2026. The portfolio exhibits an exceptional level of concentration, with the top ten holdings accounting for 89.2% of the aggregate reported US equity value.

Top Holdings Breakdown#

3. What Changed: Portfolio Transactions and Activity Breakdown#

During Q3 2026, Lindsell Train initiated 0 new positions, added to 2 existing positions, trimmed 17 positions, and completely liquidated 0 positions. Evaluated at quarter-end stock prices, total buying activity amounted to approximately $29.6 million against total selling activity of $285.0 million. This established Lindsell Train as a net seller of $255.4 million for the quarter, generating a low quarterly portfolio turnover rate of approximately 1.2%.

Note: All tactical rationales and trade motives discussed below represent analytical inferences derived by DeepValues Research from SEC Form 13F-HR and XBRL filings.

Portfolio Transactions (Ordered by Absolute Dollar Impact)#

• Thermo Fisher Scientific Inc. (TMO): Trimmed share count by 24% (~$91.7M sold); remaining position valued at $293.1M (12.4% of portfolio). Analyst Inference: The trim was driven by strict valuation discipline as the market price detached significantly from underlying owner earnings intrinsic value estimates.
• Alphabet Inc. (GOOGL): Trimmed share count by 12% (~$55.3M sold); remaining position valued at $387.4M (16.4% of portfolio). Analyst Inference: Pruned as shares traded near fair intrinsic value, helping balance overall portfolio concentration limits.
• Walt Disney Co. (DIS): Trimmed share count by 12% (~$32.4M sold); remaining position valued at $241.2M (10.2% of portfolio). Analyst Inference: Trimmed due to market pricing running well ahead of fundamental base cash flow performance.
• KKR & Co. Inc. (KKR): Expanded share count by 48% (~$29.4M bought); remaining position valued at $90.4M (3.8% of portfolio). Analyst Inference: Capital was reallocated to capture long-term compounding opportunities in alternative asset management fees and capital deployment.
• TKO Group Holdings, Inc. (TKO): Trimmed share count by 8% (~$28.7M sold); remaining position valued at $348.5M (14.8% of portfolio). Analyst Inference: Realized profits following strong price performance to maintain single-stock risk bounds within media rights holdings.
• Mondelez International, Inc. (MDLZ): Trimmed share count by 11% (~$18.2M sold); remaining position valued at $145.9M (6.2% of portfolio).
• PayPal Holdings, Inc. (PYPL): Trimmed share count by 7% (~$11.7M sold); remaining position valued at $154.4M (6.6% of portfolio).
• Intuit Inc. (INTU): Trimmed share count by 6% (~$10.8M sold); remaining position valued at $173.0M (7.3% of portfolio).
• PepsiCo, Inc. (PEP): Trimmed share count by 7% (~$9.2M sold); remaining position valued at $120.5M (5.1% of portfolio).
• Fair Isaac Corp (FICO): Trimmed share count by 6% (~$7.9M sold); remaining position valued at $126.1M (5.3% of portfolio).
• eBay Inc. (EBAY): Trimmed share count by 6% (~$6.7M sold); remaining position valued at $111.6M (4.7% of portfolio).
• Manchester United plc (MANU): Trimmed share count by 9% (~$5.3M sold); remaining position valued at $52.5M (2.2% of portfolio).
• Brown-Forman Corp Class A (BF/A): Trimmed share count by 9% (~$5.2M sold); remaining position valued at $52.1M (2.2% of portfolio).
• Brown-Forman Corp Class B (BF/B): Trimmed share count by 4% (~$1.4M sold); remaining position valued at $34.8M (1.5% of portfolio).
• The Estee Lauder Companies Inc. (EL): Trimmed share count by 17% (~$231,925 sold); remaining position valued at $1.2M (0.1% of portfolio).

Portfolio Category Synthesis & Inferences#

• Consumer Staples & Premium Brands (MDLZ, PEP, BF/A, BF/B, EL): Analyst Inference: Train executed synchronized, incremental trims across core beverage, confectionary, and beauty franchises. This strategy rebalanced portfolio weightings amidst broader input cost dynamics while preserving exposure to their pricing power and distribution moats.
• Software & Proprietary Data Platforms (INTU, FICO, EBAY, PYPL): Analyst Inference: Minor haircuts across financial software, credit scoring, and payment platforms reflect routine capital harvesting from high-margin compounders that experienced price appreciation, maintaining cash flexibility without compromising ownership of these capital-light monopolies.
• Sports & Global Entertainment (TKO, MANU): Analyst Inference: Modest reductions in unique sports franchise assets served to manage single-asset exposure within media rights, aligning holding sizes with overall fund risk guidelines.

4. The Biggest Moves, Valued: DeepValues Intrinsic Value Walkthroughs#

To understand Nick Train's capital allocation actions, DeepValues Research analyzed SEC XBRL filings (10-K and 10-Q) for the portfolio's top three trimmed holdings using a Warren Buffett-style owner earnings DCF model (10% discount rate, 5-year growth at rate g, 5-year fade to 2.5%, and 2.5% terminal growth) alongside reverse DCF calculations.

4.1 Thermo Fisher Scientific Inc. (TMO)#

• Owner Earnings Breakdown: For the trailing twelve months (TTM) ended September 26, 2026 (10-Q period), Thermo Fisher generated $7.3 billion in owner earnings—calculated as $9.3 billion in operating cash flow minus $1.7 billion in maintenance capex (the lesser of total capex and depreciation/amortization) minus $0.3 billion in stock compensation. Over ten years, TMO's owner earnings expanded from $2.7 billion in FY 2016 to $7.3 billion TTM.
• Discounted Cash Flow Valuation:
• Base Intrinsic Value: $302.80 per share (Margin of Safety: -130.6% relative to the market price of $698.34).
• Conservative Case: $210.04 per share (Growth rate g = 4.9%; current price is 232.5% above conservative value).
• Optimistic Case: $398.65 per share (Growth rate g = 13.7%; current price is 75.2% above optimistic value).
• Reverse DCF Analysis: At a market price of $698.34 (market value of $258.7 billion), the market implies that TMO will grow its owner earnings at 22.7% per annum for five years before fading to 2.5%. This expectation far exceeds TMO's historical 10-year base growth rate of 9.7%.
• Business Moat & Valuation Link: Thermo Fisher commands an economic moat derived from life-science lab equipment lock-in, high customer switching costs, and regulatory integration. However, with the market pricing in 22.7% annual cash flow growth—more than double its 10-year historical trajectory—Train's 24% position trim represents a disciplined profit-taking decision as market expectations detached from underlying compounding realities.

4.2 Alphabet Inc. (GOOGL)#

• Owner Earnings Breakdown: For the TTM period ended September 30, 2026 (10-Q period), Alphabet's owner earnings reached $120.6 billion (operating cash flow of $179.6 billion minus maintenance capex of $28.5 billion minus stock compensation of $30.4 billion). Notably, under a strict all-capex treatment ($159.8 billion total capex), owner earnings fell to -$10.7 billion, reflecting $131.3 billion in growth capital expenditures above depreciation to fund AI infrastructure in the "Agentic Era."
• Discounted Cash Flow Valuation:
• Base Intrinsic Value: $276.20 per share (Margin of Safety: -1.4% relative to the market price of $280.03).
• Conservative Case: $99.58 per share (Growth rate g = 7.5%, treating 50% of growth capex as upkeep; current price is 181.2% above conservative value).
• Optimistic Case: $338.77 per share (Growth rate g = 19.0%; Margin of Safety is +17.3%).
• Reverse DCF Analysis: At a market price of $280.03 (market value of $3.44 trillion), the market implies a 5-year owner earnings growth rate of 15.3% per annum, matching Alphabet's 10-year historical base growth rate of 15.0% almost exactly.
• Business Moat & Valuation Link: Alphabet maintains wide economic moats supported by Search network effects, YouTube scale, and Google Cloud infrastructure. With GOOGL trading at $280.03 against a base intrinsic value of $276.20, Train pruned 12% of the position at near-perfect fair value. This move reflects position-sizing risk management rather than a diminishing view of Alphabet's competitive advantage.

4.3 The Walt Disney Co. (DIS)#

• Owner Earnings Breakdown: For the TTM period ended June 27, 2026 (10-Q period), Disney's owner earnings totaled $9.9 billion (operating cash flow of $17.0 billion minus maintenance capex of $5.5 billion minus stock compensation of $1.5 billion). Total capex exceeded depreciation by $3.2 billion, allocated toward growth initiatives in parks and streaming.
• Discounted Cash Flow Valuation:
• Base Intrinsic Value: $64.53 per share (Margin of Safety: -76.9% relative to the market price of $114.18).
• Conservative Case: $41.70 per share (Growth rate g = 2.3%; current price is 173.8% above conservative value).
• Optimistic Case: $86.17 per share (Growth rate g = 8.6%; current price is 32.5% above optimistic value).
• Reverse DCF Analysis: At a price of $114.18 (market value of $197.2 billion), the market implies a 5-year owner earnings growth rate of 12.8% per annum, well above Disney's historical 10-year growth rate of 4.6%.
• Business Moat & Valuation Link: Disney’s irreplaceable IP ecosystem and legacy brand power provide a strong economic moat, yet ongoing secular decline in legacy linear TV continues to pressure cash flows relative to direct-to-consumer and parks reinvestment. Because the market price of $114.18 requires 12.8% annual cash flow growth—nearly triple its historical pace—Train trimmed 12% of the position as valuation ran ahead of fundamental owner earnings.

5. Track Record: Ten-Year 13F Clone Performance vs. S&P 500#

DeepValues Research evaluated Lindsell Train's long-term performance using a 10-year 13F clone tracking methodology spanning November 3, 2016, to November 3, 2026 across 41 filings. Under this methodology, reported US common stock positions are bought at the market close on the first trading day following the SEC filing date and held until the subsequent 13F, adjusted for total returns (dividends reinvested) against SPY.

10-Year Performance Summary (2016 – 2026)#

Annual Return Breakdown#

• Best Calendar Year: 2019 (+33.3% vs. SPY +31.2%).
• Worst Calendar Year: 2022 (-17.6% vs. SPY -18.2%).
• Full Annual Sequence (Clone / SPY):
• 2016 (Partial): +3.3% / +7.7%
• 2017: +22.0% / +21.7%
• 2018: +3.1% / -4.6%
• 2019: +33.3% / +31.2%
• 2020: +31.9% / +18.3%
• 2021: +14.4% / +28.7%
• 2022: -17.6% / -18.2%
• 2023: +19.1% / +26.2%
• 2024: +16.7% / +24.9%
• 2025: +11.2% / +17.7%
• 2026 (Partial): -7.1% / +11.5%

Structural Portfolio Characteristics#

Historically, the US clone portfolio held an average of 22 positions, with extreme concentration in the top ten holdings (accounting for an average of 98.1% of value). Average quarterly turnover stood at a low 4.7%, with historical price coverage averaging 91.6%.

Methodological Caveats#

A 13F clone calculation does not reflect Lindsell Train's total fund performance. The 13F structure completely excludes non-US equity listings (including the firm's extensive UK portfolio), cash reserves, short positions, fixed income instruments, derivative options, and intraday trades, while operating with a mandatory reporting lag of up to 45 days.

6. What a Patient Investor Can Learn#

1. Extreme Patience & Low Turnover: Maintaining a quarterly turnover of ~1.2% allows core compounders to grow without incurring unnecessary tax drags or trading costs.
2. Pruning Over Liquidating: Rather than exiting high-moat franchises outright, top-tier value managers trim positions when market prices move well ahead of intrinsic value (e.g., TMO, DIS, GOOGL) to maintain risk management and position limits.
3. Concentration Discipline: Lindsell Train retains extreme conviction in its top ideas (top 10 positions = 89.2% of US equity value), accepting period-specific benchmark tracking errors in exchange for long-term ownership of elite businesses.

7. Key Numbers Summary#

• Reported US Portfolio Size (Q3 2026): $2.36 Billion (across 28 positions).
• Portfolio Concentration: Top 10 positions represent 89.2% of total US equity value.
• Q3 Net Trading Activity: -$255.4 Million (Bought ~$29.6M, Sold ~$285.0M; ~1.2% turnover).
• Largest Purchase: KKR & Co. Inc. (+48% share count increase, +~$29.4M).
• Largest Sale: Thermo Fisher Scientific Inc. (-24% share count trim, -$91.7M).
• Intrinsic Value Comparisons:
• TMO: Market Price $698.34 vs. Base Value $302.80 (-130.6% Margin of Safety).
• GOOGL: Market Price $280.03 vs. Base Value $276.20 (-1.4% Margin of Safety).
• DIS: Market Price $114.18 vs. Base Value $64.53 (-76.9% Margin of Safety).
• 10-Year 13F Clone Performance: 11.9% CAGR vs. S&P 500's 15.5% CAGR (-3.6% annual lag).

8. Closing Regulatory & Methodological Note#

Form 13F filings are quarterly snapshots filed by institutional investment managers with the SEC up to 45 days after quarter-end. They reflect only US-listed long equity holdings and omit non-US equities (such as UK listings), cash, short positions, fixed income, options, and trades executed after quarter-end.

This single-manager analysis focuses exclusively on Lindsell Train Ltd; no other investment funds or institutional managers were referenced or evaluated in this report.

This content is created strictly for educational and research purposes by DeepValues Research and does not constitute financial or investment advice.