Seeking Alpha
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

Andreas Halvorsen is one of the most successful Tiger cubs. He graduated from Williams College in 1986 and earned his MBA from Stanford University. He began his career in finance in Morgan Stanley and later spent seven years as Senior Managing Director and the Director of Equities at Julian Robertson’s Tiger Management. In 1999, he started his own hedge fund, Viking Global Investors. Since then, Halvorsen and his team have been able to produce consistently high returns. In the first year of establishment, Viking Global returned an astonishing 89% after fees. Between June 2005 and March 2010, the fund returned 119% versus 11% for the MSCI World Index. It lost 1.9% in 2008, gained 20% in 2009, and returned 3.8% in 2010.

Stocks with low beta usually have relatively low risks and are less volatile especially during financial crisis times. We don’t think European debt crisis is resolved yet and there is still the possibility of large declines in the market. That’s why we are still cautious and we are looking for low volatility stock picks. Below is a list of stocks in Viking Global’s latest 13F portfolio with beta lower than 1 and at least $2 billion market cap.

Company Name

Ticker

Value

Activity

Beta

U S BANCORP DEL

USB

575677

152%

0.99

TIME WARNER CABLE

TWC

412236

-27%

0.71

VALEANT

VRX

318396

88%

0.84

BLOCK H & R INC

HRB

317722

18%

0.66

AMERICAN TOWER

AMT

256544

65%

0.57

MASTERCARD INC

MA

241771

New

0.93

BIOGEN IDEC INC

BIIB

235606

82%

0.85

DAVITA INC

DVA

215398

37%

0.4

GOODRICH CORP

GR

163905

-45%

0.93

QUALCOMM INC

QCOM

134053

19%

0.92

ST JUDE MEDICAL

STJ

132995

13%

0.77

SHERWIN WILLIAMS

SHW

105241

-65%

0.63

MEDNAX INC

MD

101206

-16%

0.95

CARDINAL HEALTH

CAH

95906

-53%

0.82

HOME DEPOT INC

HD

93889

11%

0.74

WATSON PHARMA

WPI

70154

-5%

0.41

CARTERS INC

CRI

61345

New

0.71

MONSANTO CO

MON

50655

New

0.94

ALEXION PHARMA

ALXN

45597

New

0.55

LIFE TECHNOLOGIES

LIFE

21093

New

0.86

The largest position in Halvorsen’s portfolio with low beta is US Bancorp (NYSE:USB). Halvorsen increased his stakes in this stock by 152% over the third quarter. According to Viking Global’s latest 13F, the fund had $576 million in USB at the end of September. USB has a beta of 0.99 and returned 4.55% since the end of the third quarter, slightly lower than the 6.10% for SPY. Halvorsen also had more than $300 million invested in Valeant Pharmaceuticals International Inc (NYSE:VRX) and increased his position in VRX by 88% during the third quarter. VRX has a beta of 0.84 and gained 18% since the end of September, almost tripling the return of the market.

During the third quarter, Halvorsen initiated a brand new $242 million in Mastercard Inc (NYSE:MA), which has a beta of 0.93. MA returned 12.83% since the end of September, outperforming the market by more than 6 percentage points. Halvorsen also bought new stakes in other low beta stocks, including Carters Inc (NYSE:CRI), Monsanto Co (NYSE:MON), Alexion Pharmaceuticals Inc (NASDAQ:ALXN), and Life Technologies Corp (NASDAQ:LIFE).

The stock in Halvorsen’s portfolio with the lowest beta is Davita Inc (NYSE:DVA), which has a beta of only 0.4. Halvorsen increased his stakes in this position by 37% over the third quarter, to $215 million. DVA gained 18.35% since the end of September, beating the market by over 12 percentage points. Jim Simons was also bullish about DVA. At the end of September, Simons’ Renaissance Technologies invested $65 million in this stock.

Other low beta stocks in Halvorsen’s portfolio include Time Warner Cable Inc (NYSE:TWC), Block H&R Inc (NYSE:HRB), American Tower Corp (NYSE:AMT), and Biogen Idec Inc (NASDAQ:BIIB). We think biotech stocks carry too much firm specific risk. Our favorite stock picks in this list are Time Warner Cable, Qualcomm, Mastercard, Monsanto, and Life Technologies. This is a diverse set of stocks with stable businesses.

Source: Low Beta Stock Picks From Tiger Management's Andreas Halvorsen