Lone Pine LLC is a hedge fund with close to $16 billion under management as of year-end 2012. Since being founded by Stephen Mandel in 1997, the fund has returned "about 23% during the past 11 years!" While a lot can be learned from what fund managers are purchasing, even more can be saved by learning from their sales. Below is a look at Lone Pine's top 5 sell outs in the fourth quarter of 2012:
Apple (NASDAQ:AAPL) was Lone Pine's biggest sell at the end of 2012. It previously accounted for 3.31% of the portfolio, on September 31, and so far the sale looks to have been another great move by Mandel. Shares have fallen close to 40% from their September highs to where they currently sit at $431.93. I don't know exactly what Lone Pine thinks about Apple's future growth aspects or the negative news from the recent cash "problem" but I do know that it has to be getting close to "re-buy time" for Lone Pine. With a P/E of less than 10, it's hard to imagine Apple not being worth more than its current valuation.
Lone Pine's second largest sell out was in Schlumberger (NYSE:SLB). Schlumberger previously accounted for 2.86% of holdings and unlike Apple, this stock has moved up 12% YTD. With a market cap of $103 billion and paying a 1.61% dividend, Schlumberger currently trades for $77.58 per share and has a P/E of 19.07.
Mandel's third-largest sell out before year-end 2012 was of its previously reported stake in SPDR Gold Shares (NYSEARCA:GLD). While I feel gold is currently being undervalued, there is no denying Lone Pine benefited from this sale as it occurred during peak prices. YTD, GLD is down another 5%. As far as the outlook for gold goes, the last time I checked the FED was still printing money to fight deflation, which has historically led to a higher gold valuation. If the current monetary policies around the world continue the way they have, buying now at the reduced prices may be a great long-term move.
The fourth and fifth largest sellouts by Lone Pine came via sales of its shares in AutoZone (NYSE:AZO) and Tractor Supply Company (NASDAQ:TSCO). Both accounted for close to 2% (each) of Lone Pine's portfolio on September 31, 2012, which amounted to approximately $607 million (combined) at that time. Both of these companies were sold before dropping between 10-15% at the beginning of 2013 but, both have rebounded with AutoZone trading currently for $391.04 per share and Tractor Supply Company selling for $102.93 per share.
Other large holdings/moves:
Lone Pine's largest purchase in the quarter ending 2012 was in Facebook (NASDAQ:FB), which took up 1.83% of the portfolio.