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 (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 (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 (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 (AZO) and Tractor Supply Company (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 (FB), which took up 1.83% of the portfolio.