Maverick Capital: Buying Up Computer Hardware, Drug Companies and Banks

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 |  Includes: AAPL, AMT, AMX, BBRY, BBY, CELG, CHS, CTSH, DGI, FINL, FITB, GILD, GPS, HPQ, INFN, JPM, LO, NIHD, NTAP, PEP, PGR, PNC, QCOM, SHLD, SPLS, STT, T, WBA
by: Todd Walker

Maverick Capital's most recent portfolio holdings reveal that the long/short orientated hedge fund bought up Computer Hardware, Drug and Banking companies over the 2nd Quarter of 2009, while dumping Telecom, Big Box Retailer and Communication Equipment companies.

Maverick's exposure to US traded equities rose by $915mm over the quarter, ending at $6,444mm. The firm, one of the US’s largest and most revered hedge fund managers, was founded in 1990 by Lee S. Ainslie and Evan, Sam, and Charles Wyly. Before starting Maverick Capital, Mr. Ainslie was a managing director at Julian Robertson’s Tiger Management Corporation. When evaluating companies, the firm typically looks for a combination of value and growth characteristics.

The firm’s largest purchase over the quarter was a new position in Hewlett Packard Co (NYSE:HPQ). The firm purchased $204.8mm / 5,298,273 shares of the computer hardware company’s stock. Also in the computer hardware sector, the firm reported a large holding in Apple Inc (NASDAQ:AAPL), which stood at $248.3mm / 1,743,470 shares. Throughout the quarter, the firm slightly trimmed its AAPL position, selling -$1.8mm / -12,841 shares. As of 6/30/09, Maverick’s other computer hardware positions included:

  • Netapp Inc (NASDAQ:NTAP): $152.9mm, 7,753,018 shares, 2.3% held, Change: $-7.9mm / -398,334 shares, Sector: Information Technology
  • Leap Wireless International Inc (LEAP): $83.4mm, 2,532,494 shares, 3.6% held, Change: $83.4mm / 2,532,494 shares
  • DigitalGlobe Inc (NYSE:DGI): $11.1mm, 580,000 shares, 1.3% held, Change: $11.1mm / 580,000

The hedge fund manager also sought out some value plays in the Banking Sector by buying up shares in State Street Corp (NYSE:STT) {$101.9mm / 2,159,852 shares}, JP Morgan Chase (NYSE:JPM) {$63.7mm / 1,868,588 shares} and Fifth Third Bancorp (NASDAQ:FITB) {$27.4mm / 3,863,025 shares}. Notably, it turned sour on PNC Financial Services Group Inc (NYSE:PNC), as it sold its entire position of -$55.6mm / -1,897,270 shares.

The firm also favored a select number of Drug Companies over the quarter, as it bought up shares in:

  • Celgene Corp (NASDAQ:CELG): $113.1mm / 2,363,132 shares, 0.5% held, Change: $113.1mm / 2,363,132 shares
  • Wyeth (WYE): $235.3mm / 5,184,292 shares, 0.4% held, Change: $55.6mm / 1,224,790 shares
  • Gilead Sciences Inc (NASDAQ:GILD): $140.1mm / 2,990,385 shares, 0.3% held, Change: $43.1mm / 919,461 shares

Meanwhile, the hedge fund manager turned negative on a select number of Communication Equipment stocks, including a significant reduction in its Research In Motion Ltd (RIMM) stake, as well as complete sell-outs of American Tower Corp (NYSE:AMT) Change: {-$41.1mm / -1,351,540}, and Qualcomm Inc (NASDAQ:QCOM) {-$161.9mm / -4,160,846}. At the end of the quarter, the firm’s sector holdings included:

  • Research In Motion Ltd (RIMM): $135.8mm, 1,909,900 shares, 0.3% held, Change: $-162.9mm / -2,291,579 shares
  • America Movil S.A. de C.V. (NYSE:AMX): $103.8mm, 2,680,409 shares, 0.1% held, Change: $54.5mm / 1,407,050 shares
  • NII Holdings Inc (NASDAQ:NIHD): $62.4mm, 3,270,091 shares, 2.0% held, Change: $62.4mm / 3,270,091 shares
  • Infinera Corp (NASDAQ:INFN): $31.3mm, 3,424,778 shares, 3.6% held, Change: $0.0mm / 3,930 shares

As for Big Box Retail, the firm sold-out of Best Buy Co Inc (NYSE:BBY), {-$150.7mm / -3,969,750 shares}, while also slashing its Sears Holdings Corp (NASDAQ:SHLD) and Walgreen Co (WAG). It did identify a couple of bright spots, as it bought up Gap Inc (NYSE:GPS) and Chicos Fas Inc (NYSE:CHS) shares. The firm’s retail positions included:

  • Walgreen Co (WAG): $193.7mm / 6,589,658 shares, 0.7% held, Change: $-77.3mm / -2,629,347 shares
  • Gap Inc (GPS): $162.3mm / 9,896,009 shares, 1.4% held, Change: $162.3mm / 9,896,009 shares
  • Chicos Fas Inc (CHS): $114.0mm / 11,719,279 shares, 6.6% held, Change: $48.3mm / 4,963,402 shares
  • Sears Holdings Corp (SHLD): $29.8mm / 447,728 shares, 0.4% held, Change: $-107.7mm / -1,619,385 shares
  • Finish Line Inc (NASDAQ:FINL): $27.4mm / 3,687,488 shares, 6.8% held, Change: $-6.8mm / -914,754 shares

Excluding the positions mentioned above, Maverick Capital's other top overall holdings included:

  • Cognizant Technology Solutions Corp (NASDAQ:CTSH): $214.2mm / 8,022,136 shares, 2.7% held, Change: -$3.4mm / -126,763 shares
  • Pepsico Inc (NYSE:PEP): $203.9mm / 3,709,858 shares, 0.2% held, Change: $103.5mm / 1,882,388 shares
  • Lorillard Inc (NYSE:LO): $171.5mm / 2,531,080 shares, 1.5% held, Change: -$49.0mm / -722,693 shares
  • Progressive Corp (NYSE:PGR): $165.3mm / 10,941,615 shares, 1.6% held, Change: $57.1mm / 3,781,556 shares
  • Staples Inc (NASDAQ:SPLS): $163.8mm / 8,115,753 shares, 1.1% held, Change: $163.8mm / 8,115,753 shares

For more information on the hedge funds mentioned in this article, please see free HedgeTracker’s free Hedge Fund Directory.

Diclosure: Long JPM and WYE