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Alan Fournier is the founder and managing member of Pennant Capital Management, a long/short hedge fund. Prior to setting up Pennant Capital, Fournier had worked at Sanford C. Bernstein and David Tepper’s Appaloosa Management. He has also been a portfolio manager at Hagler, Mastrovita and Hewitt, and at Pzena Investment Management. Fournier graduated in mechanical engineering in 1983 from Wentworth Institute of Technology in Boston, MA.

During the second quarter, the fund didn’t make major changes to its top holdings. The fund's largest holding, Transdigm Group (NYSE:TDG), is unchanged during the quarter. Pennant added to its second largest holding Davita Inc. (NYSE:DVA) by 3%, and reduced its third largest holding Sensata Technologies (NYSE:ST) by 3%. There is also not much of a change to its fourth largest holding, which is the chip maker Qualcomm (NASDAQ:QCOM). The fund increased its Qualcomm position by 3% during the quarter.

At the end of June, its largest holding, Transdigm Group, accounted for 7.2% of the portfolio, followed by Davita Inc. at 6.7%, Sensata Technologies at 6.5% and Qualcomm at 6.2%. Each of the fund’s top four holdings has generated negative returns since July. Sensata Technologies is a big loser, falling 25% compared to the S&P’s 14.6% loss during the period. Davita and Qualcomm have also underperformed the index with Davita losing 20% and Qualcomm giving up 18% since July. Transdigm Group though has outperformed the index with a smaller loss of 6% compared to the S&P since the start of July.

Besides Pennant Capital, funds holding large stakes in Transdigm Group include Stephen Mandel’s Lone Pine Capital and Chase Coleman’s Tiger Global Management. Its second largest holding Davita Inc. is also a major position of Andreas Halvorsen’s Viking Global (check out Viking Global’s positions).

In Sensata Technologies, besides Pennant Capital, hedge fund Scout Capital Management owns a very large stake. Scout Capital is run by James Crichton and Adam Weiss. You can check out the major holdings of Scout Capital Management here.

The following table lists Alan Fournier’s positions at the end of June:

CompanyName

Ticker

Value (x1000)

Activity

TRANSDIGM GROUP INC

TDG

290889

0%

DAVITA INC

DVA

271179

3%

SENSATA TECHNOLOGIES

ST

264468

-3%

QUALCOMM INC

QCOM

252392

3%

WELLPOINT INC

WLP

226934

-13%

FIDELITY NATIONAL INFO

FIS

226009

4%

ABERCROMBIE & FITCH CO

ANF

199274

-11%

ADOBE SYSTEMS INC

ADBE

177298

7%

UNITEDHEALTH GROUP

UNH

167708

-10%

EXPEDIA INC

EXPE

160784

New

GENERAL MOTORS CO

GM

147492

28%

ROCKWELL COLLINS INC

COL

143058

22%

UNION PACIFIC CORP

UNP

141069

5%

COCA COLA ENTERPRISES

CCE

140275

3%

TEREX CORP NEW

TEX

136995

47%

N V R INC

NVR

128052

29%

WALTER ENERGY INC

WLT

120519

14%

DOLLAR GENERAL

DG

113975

140%

P H H CORP

PHH

113078

0%

WILLIS GROUP HOLDINGS

WSH

107714

5%

WELLS FARGO & CO

WFC

107470

6%

APPLE INC

AAPL

106407

72%

CITIGROUP INC

C

103517

-89%

PFIZER INC

PFE

102657

-20%

RANGE RESOURCES CORP

RRC

97680

0%

One major addition to the portfolio during the quarter is online travel company Expedia Inc. This is a brand new position and accounts for 4% of the portfolio, and is the fund’s 10th largest position at the end of the June quarter. Hedge fund Glenview Capital run by Larry Robbins is a major Expedia holder. You can check out Glenview Capital’s largest positions here. Expedia has lost 8% since July.

Two significant additions for the fund outside of the top 10 holdings are Dollar General (NYSE:DG) and Terex Corp. (NYSE:TEX). During the June quarter, the fund increased its Dollar General position by 140% and upped its Terex Corp. holdings by 47%. Dollar General has lost 6% since July, while Terex Corp. has collapsed to a 53% loss since the start of the third quarter. Hedge fund Lone Pine Capital is a large investor in Dollar General, while Eton Park Capital holds a large stake in Terex though it did significantly reduce its position in Terex during the second quarter.

The underperformance of some of the fund’s largest holdings has led the fund’s 13F portfolio to trail the widely followed S&P 500 index since the start of July. As a result Fournier’s 13F portfolio has lost 18.4%, vs. a 14.6% loss for the SPY since the beginning of the third quarter.

Source: Pennant Capital's Top Stock Picks