Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q1 2015 Update

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Includes: ABEV, ACAD, AGN, AIG, ALLE, ALXN, AMP, ANTM, AON, APD, AVGO, AXP, BABA, BIDU, BK, C, CAR, CCEP, CCI, CI, CNI, COF, CP, CTRP, DAL, DLTR, DVA, ESPR, ETN, EVHC, FSL, GOOG, GOOGL, HCA, HIG, HLT, HUM, ILMN, IR, KHC, KSU, LLY, LM, LNG, LRCX, LYB, MA, MAR, MDLZ, MET, MGM, MHK, MNK, MU, NTR, NXPI, PRQR, PXD, QIHU
by: John Vincent
Summary

Halvorsen's 13F portfolio increased from $21.78B to $25.81B. The number of positions decreased from 62 to 58.

Viking Global substantially increased Google Inc. and Sealed Air Corporation this quarter.

The top-three positions are Actavis plc (7.04%), Illumina, Inc. (6.12%), and Google Inc. (5.31%).

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 05/15/2015. 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 Q4 2014.

This quarter, Halvorsen's US long portfolio increased 18.51% from $21.78B to $25.81B. The number of holdings decreased from 62 to 58. Largest five individual stock positions are Actavis plc (NASDAQ:ACT), Illumina, Inc. (NASDAQ:ILMN), Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Walgreens Boots Alliance (NASDAQ:WBA), and Cheniere Energy (NYSEMKT:LNG).

Halvorsen is one of the most successful among the "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:

American International Group (NYSE:AIG), Canadian National Railway (NYSE:CNI), Mallinckrodt (NYSE:MNK), and MetLife (NYSE:MET): These are small (less than 2% of the US long portfolio each) positions established this quarter. AIG is a 1.79% stake established at prices between $48.87 and $56.42 and it currently trades at $59.88. The 1.63% CNI stake was purchased at prices between $65 and $71 and it currently trades well below its purchase price range at $60.46. MNK is a 1.74% position established at prices between $94 and $133 and the stock is now at $127. MET is a 1.31% stake bought at prices between $46.50 and $54.09 and it trades currently at $53.23.

American Express (NYSE:AXP), Envision Healthcare (NYSE:EVHC), Starwood Hotels & Resorts (HOT), and T-Mobile US (NASDAQ:TMUS): These are very small (less than ~1% of the portfolio each) positions established this quarter.

Note: Viking Global significantly increased the stake in EVHC after the quarter ended: the latest regulatory filing shows it owning 11.54 shares (6.3% of business) compared to ~6.9M shares in the 13F. For investors attempting to follow Halvorsen, EVHC is a good option to consider for further research.

Stake Disposals:

Allergan Inc. (NYSE:AGN): AGN was 1.92% of the US long portfolio position established in Q2 2014 at prices between $116 and $174 and increased by just over 180% in Q3 2014 at prices between $152 and $214. Last quarter saw a ~14% reduction at prices between $177 and $214. Actavis plc acquired Allergan in a $219 per share cash-and-stock deal that closed in March.

Salix Pharmaceuticals (NASDAQ:SLXP): SLXP was 0.92% of the US long portfolio position (2.7% of the business) established in Q1 2014 at prices between $89 and $115. It was increased by 86% the following quarter at prices between $97 and $125. Last quarter, the stake was reduced by ~36% at prices between $91.47 and $156. Valeant Pharmaceuticals (VRX) agreed to acquire Salix for $158 per share cash, and that transaction closed on April 1.

Visa Inc. (NYSE:V): V was a long-term position first purchased in 2012. Around 14M shares (split-adjusted) were purchased at the time at prices between $25 and $37.50. The position size had wavered since. Last quarter saw a huge 70% reduction at prices between $50 and $54.50, and the remaining 1.10% stake was eliminated this quarter at prices between $61.59 and $69.57. The stock currently trades at $69.62. Halvorsen harvested long-term gains from this position.

Note: Visa stock split 4-to-1 in March, and the prices quoted are split-adjusted.

Delta Air Lines (NYSE:DAL): The ~2% DAL position was increased by ~350% last quarter at prices between $30.90 and $49.23. This quarter, the entire stake was sold at prices between $43.42 and $50.70. The quick about-turn indicates a clear bearish bias.

Anthem, Inc. (NYSE:ANTM), Coca-Cola Enterprises (CCE), Ingersoll-Rand plc (NYSE:IR), Potash Corporation (POT), Shire plc (NASDAQ:SHPG), and Wal-Mart Stores (NYSE:WMT): These are very small (less than ~1% of the portfolio each) positions established last quarter, but disposed of this quarter.

Note: The following minutely small (less than 0.5% of portfolio each) positions as of last quarter were also eliminated this quarter: ACADIA Pharmaceuticals (NASDAQ:ACAD), Cigna Corporation (NYSE:CI), Lam Research (NASDAQ:LRCX), Allegion plc (NYSE:ALLE), MGM Resorts International (NYSE:MGM), Alexion Pharmaceuticals (NASDAQ:ALXN), SanDisk Corporation (SNDK), Universal Health Services (NYSE:UHS), and Ameriprise Financial (NYSE:AMP). Viking Global's ownership stake in ACADIA Pharmaceuticals was very significant at ~3% last quarter.

Stake Increases:

Actavis plc: ACT 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 last quarter at prices between $217 and $270. This quarter saw an additional one-third increase at prices between $255 and $317. It is now Halvorsen's largest position at 7.04% of the US long portfolio. The stock currently trades at $301. Halvorsen is sitting on huge gains on this position.

Note: Part of the increase this quarter is due to the acquisition of Allergan by Actavis. Viking Global held ~2M shares of Allergan for which it received around 725K shares of Actavis.

Air Products and Chemicals (NYSE:APD): APD is a large 4.60% of the US long portfolio position purchased in Q3 2014 at prices between $128 and $137 and increased by ~50% last quarter at prices between $119 and $149. This quarter saw a further ~46% increase at prices between $139 and $158. The stock currently trades at $147. For investors attempting to follow Viking Global, APD is a good option to consider for further research.

Note: The business has seen activist involvement with Bill Ackman having established a huge ~19% of his portfolio stake.

Alibaba Group Holding (NYSE:BABA): BABA is a 2.24% stake established in Q3 2014 at prices between $87 and $94 and reduced by just over two-thirds last quarter at prices between $84.95 and $119. This quarter saw an about-turn as the stake was increased by ~87% at prices between $81.58 and $105. The stock currently trades at $93.27.

Cheniere Energy: LNG is a large (top-five) 4.63% of the US long portfolio position established in Q3 2014 at prices between $70 and $84.29. The stake was increased by ~83% last quarter at prices between $61.90 and $80.03 and another 55% this quarter at prices between $66.61 and $81.40. The stock currently trades at $75.18. For investors attempting to follow Viking, LNG is a good option to consider for further research. Halvorsen controls ~6.5% of the business.

Note: LNG is fairly popular with super investors. Seth Klarman (Baupost) has a huge 24.8M share stake (~10% of business).

Canadian Pacific Railway (NYSE:CP): CP is 4.38% 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. Last quarter, the pattern reversed as there was a stake doubling at prices between $175 and $215. This quarter saw another ~53% increase at prices between $175 and $194. The stock currently trades at $177.

DaVita Healthcare (NYSE:DVA): DVA is 2% of the US long portfolio position that was increased by just over 80% in Q2 2014 at prices between $67 and $73. The original stake was established in Q1 2014 at prices between $62.74 and $70. Q3 2014 saw a ~14% increase in the $70.44 to $75 price range, and that was followed by a ~12% increase last quarter at prices between $72.03 and $78.07. This quarter saw a further ~43% increase at prices between $72.78 and $82.84. The stock currently trades at $84.09.

Google Inc.: GOOG is a top-three 5.31% of the US long portfolio position established in Q3 2014 at prices between $563 and $596 and reduced by ~20% last quarter at prices between $495 and $577. This quarter saw a huge 234% increase at prices between $493 and $575. The stock currently trades at $540. The activity indicates a clear bullish bias.

Illumina, Inc.: ILMN is Viking Global's second-largest individual stock position at 6.12% of the US long portfolio. The stake was increased by ~8% in Q3 2014 at prices between $159 and $183. This quarter saw a minor increase. The bulk of the current stake was purchased in Q1 2014 at prices between $109 and $180. The stock currently trades at $205. Viking Global controls ~5.9% of the business.

Kansas City Southern (NYSE:KSU): KSU is 2.70% of the US long portfolio position established in Q1 2014 at prices between $91 and $124. It was increased by ~65% the following quarter at prices between $95 and $108 and another ~40% in Q3 2014 at prices between $107 and $122. Last quarter saw a reversal: 25% reduction at prices between $110 and $126. This quarter, the pattern reversed again: 113% increase at prices between $102 and $122. The stock currently trades at $93.91. Viking Global controls ~6.2% of the business.

Lyondellbasell Industries (NYSE:LYB): LYB was a top-five position at 4.59% of the US long portfolio in Q2 2014. It was reduced by over one-third the following quarter at prices between $97.65 and $115 and another 43% last quarter at prices between $70.61 and $109. This quarter saw a ~90% increase at prices between $74.36 and $91.55. The long-term stake has been in the portfolio since 2010. The bulk of the original position was purchased in 2010 and 2011 at much lower prices compared to the current price of $103.

MasterCard Inc. (NYSE:MA): MA is 2.77% of the US long portfolio position that was increased by ~27% in Q2 2014 at prices between $68.68 and $77.47. Q3 2014 saw another one-third increase at prices between $73.47 and $78.32. Last quarter, the stake was reduced by over two-thirds at prices between $69.78 and $89.08. This quarter saw a 92% increase at prices between $80.74 and $92.81. The original position was purchased in Q4 2011 at prices between $31 and $38 and the stake has wavered since. The stock currently trades at $92.69.

Mondelez International (NASDAQ:MDLZ): The bulk of the 3.35% MDLZ position was purchased in Q1 2014 at prices between $32 and $35.80. It was reduced by ~30% in Q3 2014 at prices between $34.20 and $38.56. There was an about-turn last quarter as the stake was reduced by 28% at prices between $32.10 and $39.20. This quarter saw a 68% increase at prices between $34.34 and $37.59. It currently trades at $40.17.

Micron Technology (NASDAQ:MU): The 3.27% MU stake was first purchased in Q2 2013 at prices between $9.31 and $14.40. The position was increased by ~400% in Q3 2013 when almost 30M shares were purchased at prices between $12.59 and $18. The stake peaked that quarter at over 37M shares. Since then, the position was reduced significantly, and the remaining stake was at 20M shares as of last quarter. This quarter, the pattern reversed: ~55% increase at prices between $26.57 and $35.01. The stock currently trades at $27.33.

Mohawk Industries (NYSE:MHK): MHK is 3.16% of the US long portfolio stake that was increased by just over 80% in Q2 2014 at prices between $125 and $141. It was increased by another ~25% the following quarter at prices between $125 and $148. Last quarter, the pattern reversed as there was a 30% reduction at prices between $125 and $158. This quarter saw a ~11% increase at prices between $153 and $186. The position was established in Q1 2014 at prices between $133 and $150, and the stock currently trades at $187. Halvorsen controls ~6% of the business.

Sealed Air Corp.: SEE is 2.56% of the US long portfolio stake. The original position was increased by ~350% this quarter at prices between $39.42 and $48.30. The stock currently trades at $49.32. Viking Global controls ~6.9% of the business.

Capital One Financial (NYSE:COF): COF is a very small 0.54% of the US long portfolio position. It was increased by ~10% this quarter at prices between $73.21 and $82.49. The stock currently trades at $85.02.

Crown Castle International (NYSE:CCI): CCI is 1.46% of the US long portfolio position established last quarter at prices between $75.11 and $84.75. The stake was marginally increased this quarter. The stock currently trades at $82.06.

Broadcom Corporation (BRCM) and Eaton Corporation (NYSE:ETN): These are very small (less than ~1% of the portfolio each) positions established last quarter and increased this quarter. The stakes are too small to indicate a clear bias.

Ctrip.com Intl. (NASDAQ:CTRP), Humana Inc. (NYSE:HUM), Receptos, Inc. (RCPT), and Vertex Pharmaceuticals (NASDAQ:VRTX): These minutely small (less than 0.5% of portfolio each) stakes as of last quarter were increased significantly this quarter. The positions are still too small (less than ~1% of the portfolio each) to indicate a clear bias.

Stake Decreases:

Bank of New York Mellon (NYSE:BK): BK is 1.73% of the US long portfolio position established in Q3 2014 in the $37.61 to $41.53 price range and reduced by ~30% last quarter at prices between $35.95 and $41.53. This quarter saw a further ~44% reduction at prices between $35.66 and $41.14. The stock currently trades at $43.47. The activity indicates a bearish bias.

Baidu, Inc. (NASDAQ:BIDU): The ~2% BIDU position was first purchased in Q3 2013 at prices between $91 and $158. The stake was reduced by ~63% in Q3 2014 at prices between $182 and $229. Last quarter saw an about-turn: 68% increase at prices between $199 and $250. This quarter saw a ~16% reduction at prices between $203 and $233. It currently trades at $204.

Citigroup Inc. (NYSE:C): C is 1.81% of the US long portfolio position established in Q3 2014 at prices between $46.90 and $53.66 and reduced by ~25% last quarter at prices between $49.68 and $56.37. This quarter saw a further ~19% reduction at prices between $46.95 and $54.26. The stock currently trades at $54.97.

Pioneer Natural Resources (NYSE:PXD): PXD is a fairly large 3.68% 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 ~12% reduction at prices between $135 and $167. The stock currently trades at $155.

Thermo Fisher Scientific (NYSE:TMO): The 1.84% TMO stake was first established in Q2 2013 when around 8.7M shares were purchased at prices between $77 and $88. It was increased to 10.6M shares the following quarter at prices between $85 and $94. The position was reduced since Q4 2013, and the current stake is at 3.5M shares. Q2 2014 saw a ~15% reduction at prices between $113 and $122, and last quarter saw another 28% reduction at prices between $110 and $129. This quarter also saw a ~39% reduction at prices between $123 and $138. The stock currently trades at $132. Viking Global is harvesting large, long-term gains from this position.

Valeant Pharmaceuticals: VRX was the third-largest position at 5.96% of the US long portfolio as of last quarter. The stake was reduced by ~55% this quarter at prices between $143 and $205. The stock currently trades at $238, and the stake is at 3.12%. It is a long-term position that was established in 2010 when around 9.3M shares were purchased at around $20. The original position was increased by 27% in Q2 2014 at prices between $117 and $138. In Q3 2014, the stake was sold down by ~16% at prices between $107 and $131, and last quarter saw another ~9% reduction at prices between $113 and $146. Halvorsen is harvesting huge long-term gains from this position.

Ambev (NYSE:ABEV) and Avis Budget Group (NASDAQ:CAR): These are small (less than 1% of the US long portfolio each) positions established last quarter, but reduced significantly this quarter. ABEV is 0.75% of the US long portfolio stake established at prices between $5.68 and $6.85 and reduced by ~17% this quarter at prices between $5.57 and $6.81. The stock currently trades at $6.06. The 0.65% CAR stake was established at prices between $46.62 and $67.46 and reduced by ~44% this quarter at prices between $56.52 and $67.21. The stock is currently at $54.27.

Note: Viking Global significantly increased the stake in CAR after the quarter ended: the latest regulatory filing shows it owning 4.42M shares (4.2% of business).

NXP Semiconductors (NASDAQ:NXPI): NXPI is 1.71% of the US long portfolio stake established last quarter at prices between $53.90 and $77.85 and reduced by ~19% this quarter at prices between $72.38 and $108. The stock is currently at $107.

Note 1: In March, NXP agreed to acquire Freescale Semiconductor (NYSE:FSL). NXP has returned just over 40% so far this year. Meanwhile, FSL is up almost 70%.

Walgreen Boots Alliance, previously Walgreen Company: The 4.79% WBA stake is Viking's fourth-largest 13F position. It 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. This quarter saw a ~23% decrease at prices between $73.75 and $88.23. The stock currently trades at $85.97.

Dollar Tree (NASDAQ:DLTR), HCA Holdings (NYSE:HCA), and Hilton Worldwide (NYSE:HLT): These very small positions (less than ~1% of the portfolio each) were increased last quarter, but reduced significantly this quarter.

Hartford Financial Services (NYSE:HIG) and Legg Mason Inc. (NYSE:LM): These are minutely small (less than ~0.5% of the portfolio each) positions established last quarter and reduced this quarter. The position sizes are too small to indicate a clear bias.

Kept Steady:

None.

The 13F portfolio also has the following minutely small (less than 0.5% of the portfolio each) stakes: Esperion Therapeutics (NASDAQ:ESPR), Kraft Foods Group (KRFT), Eli Lilly and Co. (NYSE:LLY), QIHOO 360 Technology (NYSE:QIHU), Qunar Cayman (NASDAQ:QUNR), Teva Pharmaceutical (NYSE:TEVA), Wayfair (NYSE:W), XPO Logistics (NYSE:XPO), Aon (NYSE:AON), Transocean Ltd. (NYSE:RIG), and ProQR Therapeutics (NASDAQ:PRQR). Although the position sizes relative to the portfolio is very small, it should be noted that Viking Global has significant 4.7% ownership stake in Wayfair.

The spreadsheet below highlights changes to Halvorsen's US stock holdings in Q1 2015:

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.