Tracking Robert Karr's Joho Capital Portfolio - Q4 2015 Update

|
Includes: AMZN, BABA, BIDU, CGNX, GLW, GOOG, GOOGL, GRUB, HXL, KANG, LABL, MJN, TAL, YELP, YRD
by: John Vincent

Summary

Robert Karr's 13F portfolio increased from $349M to $357M.

The stake in Cognex Corporation was increased significantly while dropping Mead Johnson and reducing TAL Education Group.

The top-three positions are GrubHub Inc., Hexcel Corporation, and Alibaba Group Holding. They add up to ~52% of the portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Robert Karr's US stock portfolio on a quarterly basis. It is based on Karr's regulatory 13F Form filed on 02/12/2016. Please visit our Tracking Robert Karr's Joho Capital Portfolio article for an idea on his investment philosophy and our last update for the fund's moves during Q3 2015.

This quarter, Karr's US long portfolio increased marginally from $349M to $357M. The number of holdings increased from 10 to 12: Mead Johnson and iKang Healthcare were dropped while adding Baidu Inc., Multi-Color Corporation, Yelp, and Yirendai. The top three holdings represent 51.93% of the US long assets: GrubHub Inc., Hexcel Corporation, and Alibaba Group Holding.

Karr is one of the most successful among the "tiger cubs" (protégés of Julian Robertson & his legendary Tiger Fund). Although Karr's main expertise is in Asian equities, ~30% of the assets are typically in US listed 13F securities. To know more about Robert Karr and "tiger cubs", check out the book Julian Robertson: A Tiger in the Land of Bulls and Bears.

Stake Disposals:

Mead Johnson Nutrition Co. (NYSE:MJN): MJN was a large 13.05% of the US long portfolio stake as of last quarter. It was disposed of this quarter at prices between $70.40 and $84.15. The original position was established in Q2 2012 and the stake was more than doubled the following quarter at prices between $72 and $80. The position size had wavered since. Q4 2014 saw a ~74% reduction at prices between $73 and $85 while Q2 2015 saw a ~71% increase at prices between $90 and $103. The stock is currently at $70.53.

iKang Healthcare Group (NASDAQ:KANG): KANG was a 5.47% stake established in Q2 2015 at prices between $16.19 and $22.31 and reduced by ~54% last quarter at prices between $14 and $19.34. The elimination this quarter happened at prices between $14.80 and $21.34. The stock currently trades at $20.09.

New Stakes:

Baidu Inc. (NASDAQ:BIDU) & Yelp Inc. (NYSE:YELP): BIDU & YELP are very small ~0.5% of the portfolio stakes established this quarter. BIDU stake was established at prices between $137 and $218 and it is currently at $153. The YELP position was purchased at prices between $20.87 and $31.39 and the stock is now at $15.56.

Note 1: Baidu has seen a previous roundtrip in the portfolio. It was Joho Capital's third-largest position at 16.23% of the US long portfolio as of Q1 2015. This was even after a ~85% reduction over the previous two years at prices between $190 and $250. It was almost eliminated in Q2 2015 at prices between $189 and $221. The remaining minutely small stake was sold last quarter. The original position was from Q1 2013 & Q2 2013 at an overall cost-basis of ~$100 per share. Joho Capital harvested huge gains.

Note 2: Yelp has seen a previous roundtrip in the portfolio. It was purchased in Q4 2012 at prices between $17.32 and $28.40. The original stake was doubled over the following two quarters at prices between $20.30 and $25.10. The position was reduced by just over two-thirds in Q1 2014 at prices between $67.66 and $97.25. Q3 2014 saw another one-third reduction at prices between $66.31 and $84.96. Q4 2014 saw an about-turn: ~150% increase at prices between $50 and $72. In Q1 2015, the position was again increased by ~68% at prices between $42.17 and $57.47. The huge 8.72% of portfolio stake was sold the following quarter at prices between $38 and $51.

Multi-Color Corporation (NASDAQ:LABL): LABL is a medium-sized 5.49% position purchased this quarter at prices between $58.59 and $79.38 and the stock is now well below that range at $44.49.

Yirendai Ltd. (NYSE:YRD): YRD is a small 1.92% of the 13F portfolio stake established this quarter at prices between $7.38 and $10.39. The stock currently trades at $3.68.

Note: YRD had an IPO in December and the stock is down ~60% since.

Stake Decreases:

TAL Education Group (NYSE:XRS): XRS is a ~11.49% of the portfolio position. The original stake is from 2010 with the majority of the shares purchased in 2011 at prices between $9 and $16. Last quarter saw a ~19% reduction at prices between $29 and $36 and there was another ~54% reduction this quarter at prices between $31.40 and $48.49. The stock currently trades at $44.88. Joho Capital is harvesting huge long-term gains from this position.

GrubHub Inc. (NYSE:GRUB): GRUB is Joho Capital's largest position at 20.19% of the US long portfolio. It was established in Q2 2015 at prices between $33.31 and $47.18 and increased by almost two-thirds last quarter at prices between $24 and $37. The stock currently trades below his purchase price ranges at $20.93. For investors attempting to follow Karr, GRUB is a good option to consider for further research. This quarter saw a ~5% trimming.

Stake Increases:

Cognex Corporation (NASDAQ:CGNX): The 3.47% CGNX stake purchased last quarter at prices between $33.41 and $48.10 was increased to a large 14.57% position this quarter at prices between $33.74 and $38. The stock is currently at $33.44. The activity indicates a clear bullish bias.

Kept Steady:

Alibaba Group ADR (NYSE:BABA): BABA is a large (top-three) 15.35% stake established in Q2 2015 at prices between $79.54 and $93.88 and almost doubled last quarter at prices between $57.39 and $84.15. The stock currently trades at $60.90.

Amazon.com Inc. (NASDAQ:AMZN): AMZN is a minutely small 0.76% position established in Q2 2015 at prices between $370 and $446 and reduced by ~28% last quarter at prices between $430 and $548. The stock is now at $507.

Corning Inc. (NYSE:GLW): The very small 0.81% GLW position was established last quarter at prices between $15.97 and $19.80 and the stock is now at $18.39.

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) previously Google: GOOG was Karr's second-largest 13F stake at 19.37% as of Q1 2015. It was reduced by around two-thirds to a 6.62% portfolio stake in Q2 2015 at prices between $524 and $565. The stock currently trades at $682 and the stake is at 11.82%. It is a very long-term position with the bulk purchased in 2007 in the high-200s price-range.

Hexcel Corporation (NYSE:HXL): HXL is the second-largest stake at 16.17% of the US long portfolio. The original position is from Q4 2012 when around 1.3M shares were purchased at prices between $24 and $28. The stake saw a 60% reduction in Q1 2014 at prices between $41.68 and $45.49. Q3 2014 saw an about turn: ~13% increase at prices between $37 and $42. In Q4 2014, the position was increased by another ~37% at prices between $36.92 and $43.84. Last quarter saw a ~47% further increase at prices between $44 and $55. The stock currently trades at $39.61. For investors attempting to follow Karr, HXL is a good option to consider for further research.

The spreadsheet below highlights changes to Karr's US stock holdings in Q4 2015:

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.