Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio - Q4 2015 Update

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Includes: AR, BAC, BAM, BIP, BPY, CMCSA, CMPR, EQIX, HAL, JPM, MSFT, PRI, SCHW, TDW, VRX
by: John Vincent

Summary

Glenn Greenberg’s US long portfolio decreased from $3.15B to $2.52B this quarter.

Valeant Pharmaceuticals continues to be Brave Warrior’s largest holding by far at 25.22% of the US long portfolio.

They significantly increased Valeant Pharmaceuticals, while reducing Equinix and dropping Microsoft during the quarter.

This article is part of a series that provides an ongoing analysis of the changes made to Glenn Greenberg's US stock portfolio on a quarterly basis. It is based on Greenberg's regulatory 13F Form filed on 02/16/2016. Please visit our Tracking Glenn Greenberg's Brave Warrior Advisors Portfolio series to get an idea of his investment philosophy and our previous update highlighting the fund's moves during Q3 2015.

This quarter, Greenberg's US long portfolio decreased 19.92% from $3.15B to $2.52B. The top three holdings represent over ~55% of the portfolio while the top-five is at ~78%. The largest position is Valeant Pharmaceuticals (NYSE:VRX) which was first purchased in Q1 2011 and now accounts for a whopping 25.22% of the portfolio.

Stake Disposals:

Microsoft Corporation (NASDAQ:MSFT): MSFT was a large (top-five) 8.83% of the US long portfolio position as of last quarter. It was sold out this quarter at prices between $44.26 and $56.55. The original position was from Q3 2013 at prices between $31 and $36.50. In Q2 2014, the stake saw a 20% increase at prices between $39 and $42.25. Q4 2014 saw a further ~6% increase at prices between $42.74 and $49.61, and the following quarter saw another ~22% increase at prices between $40.40 and $47.59. The stock currently trades at $52.19. Greenberg harvested large gains from this position.

New Stakes:

None.

Stake Decreases:

Equinix Inc. (NASDAQ:EQIX): EQIX is a 3.98% of the US long portfolio position. It was established in Q2 2014 at prices between $170 and $210. The stake was increased by ~43% the following quarter at prices between $206 and $224. Q4 2014 saw a further ~17% increase at prices between $192 and $234. The pattern reversed last quarter: ~27% reduction at prices between $251 and $292 and that was followed with another ~48% reduction this quarter at prices between $265 and $305. The stock currently trades at $290.

Antero Resources (NYSE:AR): AR is a 3.02% of the US long portfolio position established in Q2 2015 at prices between $34.22 and $45.65 and increased by ~84% last quarter at prices between $20.20 and $34.34. The stock currently trades near the low end of those ranges at $24.64. For investors attempting to follow Greenberg, AR is a good option to consider for further research. This quarter saw a marginal reduction.

Note: Seth Klarman (Baupost Group) controls ~18.72% of Antero Resources.

Cimpress (NASDAQ:CMPR) previously VistaPrint: CMPR is a large (top three) 12.58% of the US long portfolio position. The original stake consisted of ~2M shares purchased in Q4 2011 at prices between $27 and $36. H1 2014 saw a ~40% increase at prices between $37 and $55. Q4 2014 saw an about-turn as ~38% of the position was sold at prices between $52.63 and $75.98. H1 2015 had also seen a combined ~20% reduction at prices between $79.52 and $91.16. Last quarter, the pattern reversed again: ~79% increase at prices between $64.53 and $84.51. The stock currently trades at $85.68. This quarter saw a marginal reduction.

Note: Brave Warrior's ownership stake in the business is ~12.4%.

Halliburton (NYSE:HAL): The large 8.78% of the US long portfolio HAL stake was established in Q4 2014 at prices between $37.82 and $64.51, and increased by one-third the following quarter at prices between $38.34 and $44.87. Last quarter saw a ~25% further increase at prices between $33.47 and $43.29. The stock currently trades below the low end of those ranges at $31.47. This quarter saw a ~10% trimming.

Note: Greenberg had a previous round-trip with HAL: It was a large 9.70% of the US long portfolio stake in Q1 2014. That position was established in Q1 2013 at prices between $34.50 and $43.50 and was increased by roughly two times in Q2 2013 at prices between $37 and $45.50. The entire stake was eliminated over the next two quarters at prices between $57 and $74.

JPMorgan Chase & Co. (NYSE:JPM): JPM is a large 12.51% of the US long portfolio stake established in Q3 2014 at prices between $55.56 and $61.63 and increased by ~14% in the following quarter at prices between $55 and $63.15. The stake was again increased by ~16% in Q1 2015 at prices between $54.38 and $62.58. The stock currently trades at $57.81. Last two quarters have seen marginal reductions.

Primerica Inc. (NYSE:PRI): PRI is 5.56% of the US long portfolio position established in Q3 2011 at much lower prices. Q4 2014 saw a ~30% reduction at prices between $46 and $55.60 and the following quarter saw a further ~10% reduction at prices between $49.64 and $55.09. In Q1 2015, the pattern reversed: ~28% increase at prices between $43.84 and $50.90 and that was followed by a ~15% increase last quarter at prices between $41.01 and $46.24. The stock currently trades at $42.50. Greenberg controls 6.1% of the business. This quarter saw a ~5% trimming.

Brookfield Property Partners (NYSE:BPY): BPY is a minutely small 0.01% stake established last quarter and reduced marginally this quarter.

Stake Increases:

Valeant Pharmaceuticals : VRX is Greenberg's largest position at 25.22% of the US long portfolio. The original stake consisted of ~2.4M shares purchased in Q1 2011 at prices between $28.50 and $53.25. There have been period purchases since and the current position stands at ~6.25M shares. This quarter saw a ~12% increase at prices between $70 and $182. The stock currently trades at $94.07.

Brookfield Asset Management (NYSE:BAM): BAM is a large 8.51% of the US long portfolio stake established in Q2 2015 at prices between $34.20 and $38.66 and increased by ~57% last quarter at prices between $29.91 and $36.18. The stock currently trades at $30.94. This quarter saw a ~5% further increase.

Note: There is a fair amount of super-investor interest in BAM. Lou Simpson (SQ Advisers) and Thomas Gayner (Markel) have large stakes.

JPMorgan WTS: The TARP warrant (Strike 42.42, 10/28/2018 Expiry, Yahoo Ticker: JPM-WT) stake was established in Q1 2015 and increased by ~44% the following quarter. Last quarter saw a further ~20% increase. The warrant currently trades at $17.69 which implies a nominal leverage of 3.27. This quarter saw a marginal further increase.

Charles Schwab Corporation (NYSE:SCHW): SCHW stake was first purchased in Q3 2012. Close to 6M shares were purchased at prices between $12.50 and $14.50. The position has since been built up to the current stake of ~9.6M shares (12.55% of the US long portfolio). The stock currently trades at $24.16. Last two quarters have seen minor increases.

Kept Steady:

The following very small positions (less than 0.1% of the US long portfolio each) were kept steady in the quarter: Bank of America (NYSE:BAC), Brookfield Infrastructure Partners (NYSE:BIP), Comcast Corporation (NASDAQ:CMCSA), and Tidewater Inc. (NYSE:TDW).

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

Click to enlarge

Disclosure: I am/we are long BAC.

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.