This is the third quarter 2009 edition of our hedge fund portfolio tracking series. If you're unfamiliar with tracking hedge fund movements or SEC filings, check out our series preface on hedge fund 13F filings.
Next up in our series is John Griffin's hedge fund firm Blue Ridge Capital. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies which have fundamental problems. Both Griffin at Blue Ridge and Lee Ainslie over at Maverick Capital like to effectively hedge with a solid balance of both long and short positions (like a true hedge fund... not like some of the crazy funds these days that aren't truly hedged).
Griffin graduated from the University of Virginia and received his MBA from Stanford. And, like many other hedge funds we cover on the site, Griffin is a 'Tiger Cub'. He previously plied his trade under Julian Robertson as his former right hand man at Tiger Management. For more on how to think and analyze like Griffin and Blue Ridge, check out their recommended reading lists. They've laid out their top reads in four categories presented below:
- Behavioral Finance reading
- Analytical recommended reads
- Economics recommendations
- Historical/Biographical recommendations
Keep in mind that the positions listed below were Blue Ridge's long equity, note, and options holdings as of September 30th, 2009 as filed with the SEC. We don't cover every single portfolio maneuver, as we instead focus on all the big moves. All holdings are common stock unless otherwise denoted.
Some New Positions
Brand new positions that Blue Ridge initiated last quarter:
JPMorgan Chase (NYSE:JPM)
Market Vectors Gold Miners (NYSEARCA:GDX)
Dollar Tree (NASDAQ:DLTR)
Pennymac Mortgage (NYSE:PMT) ~ we detailed this position previously when the hedge fund first revealed it
Some Increased Positions
Positions Blue Ridge already owned but added shares to:
Range Resources (NYSE:RRC): Increased by 174.7%
Express Scripts (NASDAQ:ESRX): Increased by 147.4%
Western Union (NYSE:WU): Increased by 105.4%
Monsanto (NYSE:MON): Increased by 97.3%
iShares Silver Trust (NYSEARCA:SLV): Increased by 95.9%
Palm (PALM): Increased by 74%
Crown Castle (NYSE:CCI): Increased by 61.3%
American Capital (NASDAQ:ACAS): Increased by 27.5%
Amazon (NASDAQ:AMZN): Increased by 31.7%
Some Reduced Positions
Stakes Blue Ridge sold shares in but still own:
RenaissanceRe (NYSE:RNR): Reduced position by 75.3%
Broadridge Financial (NYSE:BR): Reduced by 70.4%
Apple (NASDAQ:AAPL): Reduced by 31.2%
Berkshire Hathaway (NYSE:BRK.A): Reduced by 18.5%
Positions Blue Ridge sold out of completely:
Schering Plough (SGP)
National Oilwell Varco (NYSE:NOV)
State Street (NYSE:STT)
Charles Schwab (NYSE:SCHW)
Agnico Eagle Mines (NYSE:AEM)
Axis Cap (NYSE:AXS)
Newmont Mining (NYSE:NEM)
Yamana Gold (NYSE:AUY)
Harley Davidson (NYSE:HOG)
Wells Fargo (NYSE:WFC)
Direxion Financial Bear 3x (NYSEARCA:FAZ)
Top 15 Holdings by percentage of assets reported on 13F filing
- Apple (AAPL): 5.83%
- JPMorgan Chase (JPM): 5.75%
- Pfizer (NYSE:PFE): 5.68%
- Amazon (AMZN): 5.36%
- Western Union (WU): 5.26%
- Crown Castle (CCI): 4.92%
- Millipore (MIL): 4.81%
- CME Group (NASDAQ:CME): 4.58%
- Microsoft (NASDAQ:MSFT): 4.29%
- Thermo Fisher Scientific (NYSE:TMO): 4.25%
- Blackrock (NYSE:BLK): 4.17%
- Visa (NYSE:V): 4.04%
- Discovery Communications (NASDAQ:DISCA): 3.47%
- Express Scripts (ESRX): 3.36%
- Covanta (NYSE:CVA): 3.33%
The main portfolio change to make note of was Blue Ridge's brand new stake in JPMorgan Chase which Blue Ridge brought all the way up to its second largest holding at 5.75% of its reported longs. The trade in hedge fund land has been long moneycenter banks and short regional banks for some time and this position sticks to that theme. Additionally, Blue Ridge's stake in Apple is quite sizable. Even though Blue Ridge sold off a third of its position, it still remains the hedge fund's top holding at 5.83% of its holdings.
John Griffin's hedge fund also boosted its holdings in Express Scripts (ESRX) which is notable since many other Tiger Cub portfolios own this name including Andreas Halvorsen's Viking Global. And while the brand new stake in Equinix (EQIX) only landed at its 26th largest holding, we highlight this because we've seen numerous hedge funds accumulating shares over the past few quarters and will have to see if the fund added more in the fourth quarter.
One other change we want to highlight is Blue Ridge's fifth largest holding of Western Union (WU). While we've seen many hedge funds prefer payment processors that bear no credit risk such as Visa and Mastercard (NYSE:MA), Blue Ridge has taken a slightly different path here by playing a global money transfer company, a position it doubled down on in the third quarter. Blue Ridge also owns Visa as the fund's 12th largest holding.
Lastly, we see Blue Ridge sold completely out of various gold miners and replaced those stakes with a single position in the Market Vectors Gold Miners exchange traded fund (GDX). So it seems Blue Ridge favored a pre-made basket via ETF instead of creating its own assembly of holdings. That pretty much wraps up the major changes in its portfolio this time around. To learn to invest like John Griffin, check out hedge fund Blue Ridge's recommended reading list.
Below you'll find graphical representations of the recent shifts in Blue Ridge Capital's portfolio courtesy of Drew Robertson at Financial Research Station:
(Click to enlarge)
Assets from the collective holdings reported to the SEC via 13F filing were $4.4 billion this quarter compared to $3.9 billion last quarter. Please keep in mind that when we state "percentage of portfolio," we are referring to the percentage of assets reported on the 13F filing. Since these filings only report longs (and not shorts or cash positions), the percentages are skewed. Also, please again note that these positions were as of September 30th so two months have elapsed and Blue Ridge has undoubtedly shifted around its portfolio since then.