Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q4 2015 Update

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Includes: AET, AFL, AGN, AIG, AKRX, ALL, AMP, AMZN, ANTM, APC, APD, AVGO, BABA, BHI, BIIB, BK, C, CB, CCI, CMG, COG, CP, CPN, CTRP, DOV, DVA, EBAY, ECA, ENDP, ETE, ETN, EVHC, FDC, GOOG, GOOGL, GPOR, HAL, HLT, HUM, ILMN, KITE, KSU, LH, LM, LNG, LYB, MA, MAR, MCD, MCK, MHK, MMC, MNK, MON, NFLX, NKE, PCLN, PFE, PRQR, PRU, PXD, QUNR, RRC, SEE, SHPG, SIRO, SWN, TDG, TEVA, TXT, VRTX, VRX, WBA, WCG, WLL, WUBA, XRAY
by: John Vincent

Summary

Halvorsen's 13F portfolio increased marginally from $26.09B to $26.52B. The number of positions increased from 63 to 64.

Viking Global increased Broadcom and Teva Pharmaceuticals and reduced Walgreens Boots Alliance during the quarter.

The top three positions are Alphabet Inc., Broadcom Corporation, and Allergan plc.

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

This quarter, Halvorsen's US long portfolio increased marginally from $26.09B to $26.52B. The number of holdings increased from 63 to 64. Largest five individual stock positions are Alphabet Inc., Broadcom Corporation, Allergan plc, Amazon.com, and Teva Pharmaceuticals and they add up to just 35.86% of the entire portfolio.

Ole Andreas Halvorsen is one of the most successful "tiger cubs" (protégés of Julian Robertson and his legendary Tiger Fund). To know more about "tiger cubs", check out the book Julian Robertson: A Tiger in the Land of Bulls and Bears.

New Stakes:

Priceline Group (NASDAQ:PCLN): PCLN is a 1.89% of the US long portfolio position established this quarter at prices between $1237 and $1470 and the stock currently trades at $1284.

Anadarko Petroleum (NYSE:APC), Cabot Oil & Gas (NYSE:COG), Chipotle Mexican Grill (NYSE:CMG), Endo International plc (NASDAQ:ENDP), Halliburton Company (NYSE:HAL), Kraft Heinz (NASDAQ:KHC), and Pfizer Inc. (NYSE:PFE): These are very small (less than ~1% of the portfolio each) stakes established this quarter.

Note 1: A regulatory 13G filing on 1/21/2016 shows Viking Global owning 30.85M shares (7.5% of business) of Cabot Oil & Gas. This is compared to 13.41M shares in the 13F.

Note 2: Pfizer is acquiring Allergan plc and Halliburton is acquiring Baker Hughes (NYSE:BHI). Halvorsen has a top three stake in Allergan.

Stake Disposals:

American International Group (NYSE:AIG): AIG was a 1.79% stake established in Q1 2015 at prices between $48.87 and $56.42. It was reduced to a minutely small 0.31% position in Q2 2015 at prices between $54.79 and $63.32. Last quarter, the stake was more than doubled at prices between $55.66 and $64.54. The elimination this quarter happened at prices between $57 and $64. The stock currently trades at $51.52.

Illumina Inc. (NASDAQ:ILMN): ILMN was Viking Global's second-largest individual stock position at 6.12% of the US long portfolio as of Q1 2015. It was reduced by ~42% next quarter at prices between $182 and $221 and another ~64% last quarter at prices between $168 and $240. The position was eliminated this quarter at prices between $140 and $194. The bulk of the original stake was purchased in Q1 2014 at prices between $109 and $180. The stock currently trades at $151.

Mallinckrodt Ltd. (NYSE:MNK): MNK was a 0.96% position sold out this quarter at prices between $53.41 and $76.66. The original stake is from Q1 2015 at prices between $94 and $133. It was increased by ~53% the following quarter at prices between $113 and $130. Last quarter saw a ~28% reduction at prices between $58 and $127. The stock currently trades at $64.73.

Mohawk Industries (NYSE:MHK): MHK was a 1.38% of the US long portfolio stake sold out this quarter at prices between $181 and $200. The position was established in Q1 2014 at prices between $133 and $150. The stake was doubled over the following two quarters at prices between $125 and $148. In Q4 2014 the pattern reversed as there was a 30% reduction at prices between $125 and $158. Last quarter saw a ~54% further reduction at prices between $176 and $211. The stock currently trades at $166. Viking Global harvested gains from this position.

Sealed Air Corp. (NYSE:SEE): SEE was a 1.54% of the US long portfolio stake as of last quarter. The bulk of the original purchase was in Q1 2015 at prices between $39.42 and $48.30. Last quarter saw a one-third reduction at prices between $45.78 and $55.40 and the elimination this quarter was at prices between $42.17 and $51.70. The stock currently trades at $43.29.

Allstate Corp. (NYSE:ALL), Ameriprise Financial (NYSE:AMP), DaVita Healthcare (NYSE:DVA), eBay Inc. (NASDAQ:EBAY), Eaton Corporation (NYSE:ETN), Hilton Worldwide (NYSE:HLT), Starwood Hotels & Resorts (NYSE:HOT), and Whiting Petroleum (NYSE:WLL): These small positions (less than ~1% of the portfolio each) were sold out during the quarter.

Note: Marriott International (NASDAQ:MAR) announced the acquisition of Starwood Hotels & Resorts in November 2015 in a stock-and-cash deal valued at ~$80 per share.

Stake Increases:

Anthem Inc. (NYSE:ANTM) and Humana Inc. (NYSE:HUM): These two positions were increased ~13% each this quarter and combined are at ~6.44% of the portfolio. There is very heavy M&A activity in the sector and both these names are involved: Aetna is set to acquire Humana and Anthem agreed to acquire Cigna in deals announced in July 2015.

Avago Technologies (NASDAQ:AVGO): AVGO is a medium-sized 4.03% of the portfolio stake established in Q2 2015 at prices between $117 and $148. It was increased by ~46% last quarter at prices between $109 and $138. The stock currently trades at $129. This quarter saw a ~6% further increase.

Broadcom Corporation (NASDAQ:AVGO): BRCM is a large (top three) 7.36% of the portfolio stake purchased last quarter at prices between $47.19 and $53.80 and increased by 43% this quarter at prices between $50 and $58. Halvorsen's ownership stake is at 6%.

Note: In May 2015, Avago agreed to acquire Broadcom in a cash-and-stock deal. The transaction closed last month.

Cheniere Energy (NYSEMKT:LNG): LNG is a 2.24% of the US long portfolio position. It was established in Q3 2014 at prices between $70 and $84.29. The stake was increased by ~83% in Q4 2014 at prices between $61.90 and $80.03 and another 55% the following quarter at prices between $66.61 and $81.40. Q2 2015 saw a ~27% reduction at prices between $68.49 and $79.78 while last quarter saw a ~15% increase at prices between $48.50 and $70.65. This quarter saw another ~22% increase at prices between $35.87 and $54.02. The stock currently trades below the low end of their purchase price ranges at $29.37. Viking Global controls 6.7% of the business.

Note: LNG is fairly popular with super investors. Seth Klarman (Baupost Group), John Griffin (Blue Ridge Capital), Stephen Mandel (Lone Pine Capital), and Carl Icahn have large stakes.

Pioneer Natural Resources (NYSE:PXD): PXD is a fairly large 4.43% of the US long portfolio stake established in Q1 2014 at prices between $165 and $205. It was increased by almost 150% in Q2 2014 at prices between $181 and $233 and another two-thirds the following quarter in the $195 to $232 price-range. This quarter saw a ~41% further increase at prices between $116 and $149. The stock currently trades at $123. Viking Global controls 5.8% of the business.

Valeant Pharmaceuticals (NYSE:VRX): VRX was the third-largest position at 5.96% of the US long portfolio as of Q4 2014. The stake was reduced by ~55% the following quarter at prices between $143 and $205. This quarter saw a ~56% increase at prices between $70 and $182. The stock currently trades at $84.97 and the stake is at 2.99%. It is a long-term position that was established in 2010 when around 9.3M shares were purchased at around $20.

Netflix Inc. (NASDAQ:NFLX): NFLX is a medium-sized 3.38% of the 13F portfolio stake established last quarter at prices between $93 and $126. It was increased by ~74% this quarter at prices between $97 and $131. The stock currently trades below those ranges at $89.23.

Teva Pharmaceuticals (NYSE:TEVA): TEVA is a top-five position at 6.20% of the portfolio. The stake was established last quarter at prices between $55 and $72. This quarter saw a ~182% increase at prices between $56 and $66. The stock currently trades near the low end of those ranges at $56.63. For investors attempting to follow Viking Global, TEVA is a good option to consider for further research.

McKesson Corp. (NYSE:MCK), Nike Inc. (NYSE:NKE), Qunar Cayman (NASDAQ:QUNR), Textron Inc. (NYSE:TXT), Transdigm Group (NYSE:TDG), and Vertex Pharmaceuticals (NASDAQ:VRTX): These small positions (less than ~2% of the portfolio each) were increased during the quarter.

Note: A regulatory 13G filing on 2/16/2016 shows Viking Global owning 25.57M shares (6.7% of business) of Qunar Cayman. This is compared to 8.5M shares in the 13F.

Stake Decreases:

Allergan plc (NYSE:AGN) previously Actavis: AGN was first purchased in Q2 2013 and more than doubled the next quarter at prices between $97 and $147. The stake was reduced by ~70% in Q1 2014 at prices between $177 and $221. Q3 2014 saw the position doubled at prices between $203 and $248 and that was followed by a ~80% increase in Q4 2014 at prices between $217 and $270. Q1 2015 saw an additional one-third increase at prices between $255 and $317. This quarter saw a ~17% trimming. It is now Halvorsen's third largest position at 7.04% of the portfolio. The stock currently trades at $275.

Note 1: In November 2015, Pfizer Inc. announced the acquisition of Allergan plc in a deal valued at $160B. Allergan shareholders will receive 11.3 shares of a new company (the new business will be domiciled in Ireland - tax inversion deal structure) for each share held. The deal is expected to close in H2 2016.

Note 2: Part of the increase in Q1 2015 was due to the acquisition of Allergan by Actavis. Viking Global held ~2M shares of Allergan for which they received around 725K shares of Actavis. Actavis plc was later renamed Allergan plc.

Air Products and Chemicals (NYSE:APD): APD is a medium-sized 2.64% of the US long portfolio position. It was first purchased in Q3 2014 at prices between $128 and $137 and increased by ~50% the following quarter at prices between $119 and $149. Q1 2015 saw a further ~46% increase at prices between $139 and $158. In Q2 2015, the pattern reversed: ~25% reduction at prices between $137 and $153. The stock currently trades at $132. This quarter saw a ~9% trimming.

Note: The business has seen activist involvement: Bill Ackman (Pershing Square) has a huge stake.

Amazon.com Inc. (NASDAQ:AMZN): AMZN is a large (top three) 6.54% of the US long portfolio stake established in Q2 2015 at prices between $370 and $446 and increased by roughly one-third last quarter at prices between $429 and $548. This quarter saw a ~15% reduction at prices between $512 and $694. The stock currently trades at $535.

Canadian Pacific Railway (NYSE:CP): CP is a 1.93% of the US long portfolio position that was established in Q4 2013 at prices between $123 and $157. Q2 2014 saw a 25% reduction at prices between $144 and $185 and the following quarter saw another one-third decrease in the $180 to $209 price-range. In Q4 2014, the pattern reversed as there was a stake doubling at prices between $175 and $215. Q1 2015 saw another ~53% increase at prices between $175 and $194. Q2 2015 had seen a ~15% trimming and that pattern continued last quarter with a ~21% reduction at prices between $134 and $162. The stock currently trades at $126. This quarter saw a marginal further reduction.

Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) previously Google: GOOG is the largest 13F position at 8.72%. It was established in Q3 2014 at prices between $563 and $596. Q1 2015 saw a huge 234% increase at prices between $493 and $575 and that was followed with another 57% increase the following quarter at prices between $524 and $565. This quarter saw a ~18% reduction at prices between $608 and $777. The stock currently trades at $701. Halvorsen is starting to harvest gains from this position.

LyondellBasell Industries (NYSE:LYB): LYB is a long-term stake first purchased in 2010. The original position was reduced by over one-third in Q3 2014 at prices between $97.65 and $115 and another 43% the following quarter at prices between $70.61 and $109. Q1 2015 saw an about-turn: ~90% increase at prices between $74.36 and $91.55. There was a further 39% increase the following quarter at prices between $87.80 and $106. Last quarter also saw a ~26% increase at prices between $77.25 and $104. The pattern reversed this quarter: ~31% reduction at prices between $83 and $98. It currently trades at $78.14 and the stake is now at 3.06%.

MasterCard Inc. (NYSE:MA): MA was a 1.87% of the US long portfolio position as of last quarter. It was almost sold out this quarter at prices between $90 and $102. The original position was purchased in Q4 2011 at prices between $31 and $38 and the stake has wavered since. Recent activity follow: Q1 2015 saw a 92% increase at prices between $80.74 and $92.81 while last quarter saw a one-third decrease at prices between $86.82 and $98.41. The stock currently trades at $86.80. Halvorsen harvested long-term gains from this position.

Walgreen Boots Alliance (NASDAQ:WBA) previously Walgreen Company: The 4.10% WBA stake was first purchased in Q4 2013 and substantially increased in Q1 2014 at prices between $53.80 and $69.09. Q2 2014 saw a turnaround as ~17% of the position was sold at prices between $63.40 and $76.08. Q1 2015 saw a ~23% decrease at prices between $73.75 and $88.23. In Q2 2015, the pattern reversed: ~69% increase at prices between $82.93 and $92.62. This quarter saw a ~45% reduction at prices between $79 and $95. The stock currently trades at $77.57.

Aetna Inc. (NYSE:AET), Alibaba Group Holding (NYSE:BABA), Bank of New York Mellon (NYSE:BK), Citigroup Inc. (NYSE:C), Crown Castle International (NYSE:CCI), Ctrip.com Intl. (NASDAQ:CTRP), Envision Healthcare (NYSE:EVHC), Kansas City Southern (NYSE:KSU), Kite Pharmaceuticals (NASDAQ:KITE), and Laboratory Corp of America Holdings (NYSE:LH): These small stakes (less than ~1% of the portfolio each) were reduced further this quarter. Viking Global has a 4.2% ownership stake in Envision Healthcare.

Note: Regulatory 13G filings since the quarter ended show Viking Global owning significant ownership stakes in the following businesses: 21.75M shares (10.8% of business) of First Data Corporation (NYSE:FDC), 54.82M shares (6.5% of business) of Encana Corporation (NYSE:ECA), 7.9M shares (7.3% of business) of Gulfport Energy (NASDAQ:GPOR), 11.59M shares (6.8% of business) of Range Resources (NYSE:RRC), and 35.5M shares (9.2% of business) of Southwestern Energy (NYSE:SWN).

The 13F portfolio also has the following minutely small (less than 0.5% of the portfolio each) stakes: Aflac Inc. (NYSE:AFL), Biogen Inc. (NASDAQ:BIIB), Calpine Corporation (NYSE:CPN), Dentsply Intl. (NASDAQ:XRAY), Dover Corp. (NYSE:DOV), Energy Transfer Equity (NYSE:ETE), 58.com Inc. (NYSE:WUBA), Akorn Inc. (NASDAQ:AKRX), Legg Mason Inc. (NYSE:LM), Marsh & McLennan (NYSE:MMC), McDonalds' Corp. (NYSE:MCD), Monsanto Company (NYSE:MON), Prudential Financial (NYSE:PRU), Shire plc (NASDAQ:SHPG), Sirona Dental Systems (NASDAQ:SIRO), Wellcare Health Plans (NYSE:WCG), ProQR Therapeutics (NASDAQ:PRQR), and Chubb Limited (NYSE:CB) previously Ace Ltd..

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

Click to enlarge

Disclosure: I am/we are long AIG, EBAY, LNG.

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.