Title: 8 Stocks Quality Investors Are Buying — Superinvestors are buying these stocks Show: Compounding Quality (Substack, compoundingquality.net) Guest: Pieter Slegers (publication) — this issue written by TJ Terwilliger for Team Compounding Quality Date: 2026-03-05 URL: https://www.compoundingquality.net/p/8-stocks-quality-investors-are-buying Length: written post (paid) — no timestamps Note: Paid-subscriber post captured via Stephen's logged-in session. Body text verbatim; page chrome (like/share counts, subscribe CTAs) removed. The two "Top Buys" tables are published as images and are transcribed below as [Table image — ...] blocks. Charts credited "Source: Fiscal.ai" are images not reproduced here. ===== You know what's beautiful? The best investors in the world are obliged to share their portfolio every quarter. Let's see which Quality Stocks superinvestors like Warren Buffett and Terry Smith have been buying. A shameless copycat Mohnish Pabrai put it best: "I'm a shameless copycat. Everything in my life is cloned … I have no original ideas." Copying what works is a great strategy. Charlie Munger modeled himself after Benjamin Franklin Microsoft copied Netscape, Lotus, and many more to become dominant in software Facebook has copied Snap and TikTok & bought Instagram, and WhatsApp Pabrai copied Buffett's partnership structure and his investing style What's also interesting? Several studies have shown that by copying the best investors in the world, you tend to outperform the market. Source: Next Level Investing With that in mind, let's dive into what superinvestors have been buying and selling recently. PS Do you know what's really interesting? Mohnish Pabrai recently added a lot to Constellation Software ($CSU). This is very interesting to see, especially given the fact that he can be seen as a deep value investor. In other words: Mohnish Pabrai thinks Constellation Software is way too cheap. Source: Armin Hartl Top 10 Buys Here are the 10 stocks 'superinvestors' bought the most of last quarter: [Table image — Top Buys, Last Quarter (Q4 2025). Ten entries, ranked. 1 MSFT - Microsoft Corp. 2 AMZN - Amazon.com Inc. 3 META - Meta Platforms Inc. 4 V - Visa Inc. 5 TSM - Taiwan Semiconductor S.A. 6 GOOG - Alphabet Inc. CL C 7 FISV - Fiserv Inc. 8 RKT - Rocket Companies Inc. 9 LYV - Live Nation Inc. 10 NVDA - NVIDIA Corp.] If we look at the last 2 quarters, we get the following: [Table image — Top Buys, Last 2 Quarters. Ten entries, ranked. 1 MSFT - Microsoft Corp. 2 AMZN - Amazon.com Inc. 3 META - Meta Platforms Inc. 4 V - Visa Inc. 5 FISV - Fiserv Inc. 6 NVDA - NVIDIA Corp. 7 TSM - Taiwan Semiconductor S.A. 8 UNH - United Health Group Inc. 9 GOOGL - Alphabet Inc. 10 DIS - Walt Disney Co.] There are a lot of large cap stocks in both lists: Microsoft Amazon Meta Platforms Alphabet (Google) Nvidia Superinvestors like Warren Buffett, Terry Smith, Chuck Akre, … manage billions of dollars. As a result, they are practically forced to own large cap stocks. Why? They are just not able to buy small caps because they would influence the stock price Big Tech companies dominate the S&P 500. If you don't own them, it's hard to keep up with the benchmark Rational, long-term investors like us don't have this concern. We don't need to beat the index every quarter. We want to outperform in the long term. The interesting thing? The larger the company, the harder it is to keep growing at very high rates. Just think about Meta Platforms for a second. There's not that much market share left for them to take. As a result, growth needs to come from selling more to existing clients. The costs for ads almost doubled since 2017 on Meta Platforms. This will be much harder for them to do again over the next 8 years. The most interesting companies? The ones owned by the best quality investors in the world Small caps. Quality Investors 101 The Community of Compounding Quality is amazing. Every quarter, Mathieu creates a spreadsheet tracking the Portfolio of the 12 best quality investors in the world. Think about investors like: Fundsmith (Terry Smith) Akre Capital (Chuck Akre) Valley Forge (Devang Kantesaria) Giverny Capital (François Rochon) TCI Fund Management (Chris Hohn) Let's look into what they are buying and selling. What Quality Investors Sold Let's start with the positions they sold. 1. Fiserv ($FI) How does the company make money? Fiserv earns fees by processing credit and debit card transactions for businesses and providing the software that banks use to manage customer accounts and digital banking. Why did superinvestors sell? Fiserv used to be the only toll bridge in town. But today, modern competitors like Stripe and Adyen are competing with Fiserv. Source: Fiscal.ai But when Michael Lyons took over, he dropped a bombshell. The old growth targets were gone. Instead of 10% revenue growth, the new plan was just 3.5% to 4%. That's why investors like Francois Rochon decided to sell. 2. Booz Allen ($BAH) How does the company make money? Booz Allen provides specialized consulting, technology, and analytics services to United States government agencies, including defense, intelligence, and civil sectors. Why did superinvestor sell? One thing we love as quality investors is predictability. For years, U.S. Government contracts were very stable. But that changed when Elon Musk started cutting contracts in an effort to reduce government spending with DOGE. Why that's bad for Booz Allen? 70% of its revenue comes from contracts with the U.S. Government. Source: Fiscal.ai That killed the revenue certainty. Suddenly, the company was in the midst of a political battle. 3. Credit Acceptance ($CACC) How does the company make money? Credit Acceptance Corp provides auto loans to high-risk consumers through a network of car dealers, earning revenue from the interest paid by borrowers and service fees charged to the dealerships. Why did superinvestor sell? Francois Rochon of Giverny Capital sold Credit Acceptance Corporation. He told us exactly why in his investor letter: "As for sales, we trimmed Credit Acceptance Corporation throughout the third quarter and exited fully on October 1. We believe Credit Acceptance has fallen behind other leading subprime lenders in both technology and underwriting sophistication and may have a hard time catching up." Temporary challenges? No problem. They often let you buy great companies at a discount. But Credit Acceptance fell far behind its competitors. And catching up looks anything but certain. What Quality Investors Trimmed Here are some companies quality investors trimmed last quarter: Microsoft (MSFT) Alphabet (GOOGL) Interactive Brokers (IBKR) CME Group (CME) Intuit (INTU) O'Reilly Automotive (ORLY) CarMax (KMX) Fiserv (FI) The most likely reason? Companies like Microsoft, Alphabet, and Interactive Brokers did really well recently. The valuation might become a bit too expensive according to some investors. Source: Fiscal.ai Big Funds, Small Positions Here's a list of companies that multiple funds have small positions in: Waters Corp (WAT) Booking Holdings (BKNG) ADP (ADP) Cadence Design Systems (CDNS) Analog Devices (ADI) Zoetis (ZTS) Mercadolibre (MELI) Floor & Decor (FND) Let's highlight three companies from this list. Automatic Data Processing (ADP) How does the company make money? ADP makes money by handling payroll and human resources for businesses. They charge recurring fees for these services, and earn significant interest on the billions of dollars they temporarily hold before paying them out to employees and tax authorities. Why it might be interesting ADP has very high switching costs. Once a company trusts ADP with its taxes and payroll, they almost never leave. It's also a very capital light business, with CAPEX/Sales below 2%. Source: Fiscal.ai They generate a lot of cash without needing to reinvest a lot back into the business. Quality Funds Ownership: Fundsmith: 6.3% Guardcap: 3.8% Seilern: 0.5% Booking Holdings (BKNG) How does the company make money? Booking Holdings makes money by collecting commissions on travel reservations made through its platforms, processing payments directly as the merchant of record, and earning advertising and referral fees from brands like KAYAK and OpenTable. Why it might be interesting The company owns Booking.com, Agoda, and OpenTable. For every hotel room or flight booked through their platform, Booking takes a percentage. It's important to understand they don't own any hotels. They own the traffic. This is a capital-light marketplace with a powerful network effect working in its favor. The more hotels they list, the more travelers use the site The more travelers use the site, the more hotels want to be listed Another interesting thing? Booking is currently trading at one of the lowest Forward P/E ratios we've seen since 2020. Why? Because investors fear AI will disrupt its business. We don't think this will be the case as Booking's network effect is very powerful. Source: Fiscal.ai Quality Funds Ownership: Giverny Capital: 3.8% AKO Capital: 3.5% Guardcap: 8.5% MercadoLibre (MELI) How does the company make money? MercadoLibre makes money by taking commissions on sales on its e-commerce marketplace, and earning interest and fees through its massive fintech ecosystem, Mercado Pago, which provides digital payments and credit across Latin America. Why it might be interesting MercadoLibre owns a dominant ecosystem across Latin America: E-commerce: MercadoLibre Fintech: MercadoPago You could see the company as 'the Amazon of Latin America'. It's grown incredibly fast. Source: Fiscal.ai Just like Amazon, MercadoLibre has a moat built on network effects and logistics infrastructure. MercadoLibre is the dominant e-commerce platform in Latin America. The more people use it, the more valuable it becomes: Sellers stay because that's where the customers are Buyers stay because that's where the best selection is On top of that, their shipping network and digital payment system (MercadoPago) build a moat of convenience. That's powerful in a region where shipping and payments have always been a nightmare. Quality Funds Ownership: NSZ Capital: 1.4% Guardcap: 0.1% You can read a Not So Deep Dive of Mercadolibre here. What Quality Investors Bought This is the most interesting part of the article. Here are some quality stocks superinvestors added to last quarter: Transdigm Group (TDG) Amazon.com (AMZN) Adobe (ADBE) Canadian Pacific Kansas City (CP) Cadence Design Systems (CDNS) Zoetis (ZTS) Live Nation Entertainment (LYV) Cisco Systems (CSCO) A company that stands out to us? Zoetis. We recently bought Zoetis for the Portfolio. You can read the investment case here. We think the company is currently too cheap. Source: Fiscal.ai Conclusion Here are the key takeaways from today's article: Copy the best: Copying the best investors in the world tends to outperform the market. Big funds buy big stocks: Large investors are forced to buy large caps. The best opportunities are found in the small cap space. What the best investors in the world sold: Fiserv, Booz Allen and Credit Acceptance Corp. Three interesting companies right now: Automatic Data Processing, Booking Holdings, and MercadoLibre. What the best investors in the world bought: Transdigm, Amazon, Adobe, and Zoetis. You can see the entire spreadsheet here: Quality Funds Holdings Q4 2025 Everything In Life Compounds Team Compounding Quality Used sources Interactive Brokers: Portfolio data and executing all transactions Fiscal.ai: Financial data