Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q4 2016 Update

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Includes: ABUS, AIG, ALL, AMSG, AMZN, APC, APD, ARCH, AVGO, AXON, AZN, BABA, BAC, BIIB, BMRN, CALA, CHK, CNC, COG, CP, CPN, CRM, DE, DIS, DOV, DWDP, DYN, ECA, ECR, EDIT, EMR, ETN, EVHC, FB, FOXA, GOOG, GOOGL, GPOR, GWPH, HD, HUM, ICE, ILMN, INCY, JAZZ, JCI, JD, KITE, LBTYA, LBTYK, LLY, LOW, LYB, MA, MAR, MET, MFC, MMC, MSFT, MYOV, NFLX, NUVA, PGR, PSTG, RICE, RRC, SCHW, SEE, SHPG, STZ, SWN, TEVA, TMUS, TSRO, UHS, UNH, UNP, UTX, V, WBA, WDC, WOOF, WUBA, WYNN, XOG, XRAY
by: John Vincent

Summary

Halvorsen's 13F portfolio decreased from $23.18B to $22B. The number of positions decreased from 62 to 60.

Viking Global increased Microsoft while reducing Amazon.

The top three positions are Alphabet Inc., Facebook Inc., and Microsoft Corporation.

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 02/14/2017. 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 2016.

This quarter, Halvorsen's US long portfolio decreased ~5% from $23.18B to $22B. The number of holdings decreased from 62 to 60. Largest five individual stock positions are Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Facebook (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Dow Chemical (DOW) and they add up to ~37% of the entire portfolio.

Ole Andreas Halvorsen is one of the most successful "tiger cubs" (protégés of Julian Robertson & 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:

Dow Chemical and Deere & Co. (NYSE:DE): These are large new positions established this quarter. The 5.11% DOW stake was purchased at prices between $52 and $59 and the stock is now at $63.67. DE is a 4.36% position established at prices between $85 and $104 and it now goes for $110.

Note: In December 2015, Dow and DuPont (NYSE:DD) announced a merger of equals with plans to separate into three businesses after the merger.

United Health (NYSE:UNH), Twenty-First Century Fox (NASDAQ:FOXA), and Charles Schwab (NYSE:SCHW): These are small ~1.5% portfolio positions purchased this quarter. UNH is a 1.61% portfolio stake established at prices between $134 and $164 and the stock is now at $161. The 1.57% FOXA position was purchased at prices between $24 and $29 and the stock currently trades at $30.47. SCHW is a 1.45% stake established at prices between $31 and $40.50 and it is now at $41.62.

Walt Disney (NYSE:DIS) & Union Pacific (NYSE:UNP): These are ~1% stakes established this quarter. The DIS position was purchased at prices between $91 and $106 and it currently trades at $110. The UNP stake was established at prices between $88 and $106 and the stock is now at $109.

Chesapeake Energy (NYSE:CHK), Wynn Resorts (NASDAQ:WYNN), Marsh & McLennan (NYSE:MMC), Intercontinental Exchange (NYSE:ICE), Dentsply Sirona (NASDAQ:XRAY), Western Digital (NYSE:WDC), Manulife Financial (NYSE:MFC), Allstate Corporation (NYSE:ALL), Progressive Corp. (NYSE:PGR), United Technologies (NYSE:UTX), Extraction Oil & Gas (NASDAQ:XOG), NuVasive Inc. (NASDAQ:NUVA), Illumina Inc. (NASDAQ:ILMN), VCA Antech Inc. (NASDAQ:WOOF), Arch Coal Inc. (NYSE:ARCH), and Teck Resources (TCK): These are very small (less than ~1% of the portfolio each) stakes established this quarter.

Note: Intercontinental Exchange and Marsh & McLennan are back in the portfolio after a quarter's gap.

Stake Disposals:

Teva Pharmaceutical (NYSE:TEVA): TEVA was a fairly large position at 3.91% of the portfolio. The stake was established in Q3 2015 at prices between $55 and $72. The following quarter saw a ~180% increase at prices between $56 and $66 and that was followed with a one-third further increase in Q1 2016 at prices between $53.50 and $66. Q2 2016 saw a ~15% trimming at prices between $48.50 and $57. There was another ~30% selling last quarter at prices between $46 and $56 and the disposal this quarter was at prices between $35 and $46. The stock currently trades at $35.97.

Air Products and Chemicals (NYSE:APD): APD was a fairly large ~3% of the US long portfolio position. It was first purchased in the three quarters through Q1 2015 at prices between $119 and $158. There was an about turn in Q2 2015: ~25% reduction at prices between $137 and $153. Q1 2016 saw a ~28% stake increase at prices between $116 and $145. The pattern reversed again last quarter: ~30% reduction at prices between $138 and $157. The elimination this quarter was at prices between $132 and $150. The stock currently trades at $140.

Eli Lilly (NYSE:LLY): LLY was ~2% of the portfolio stake established in Q1 2016 at prices between $69 and $84. The following quarter saw a ~20% reduction at prices between $72 and $79 and that was followed with another roughly one-third reduction last quarter at prices between $77 and $83. The disposal this quarter was at prices between $66 and $83. The stock currently trades at $81.07.

Anadarko Petroleum (NYSE:APC), Calpine Corp. (NYSE:CPN), Dynegy Inc. (NYSE:DYN), and Southwestern Energy (NYSE:SWN): These energy-related stocks were increased last quarter but disposed this quarter. Combined, they were at ~4% of the portfolio.

Note: Viking Global had ownership stakes of ~6% of Calpine Corp. and ~9.5% of Dynegy as of last quarter.

Jazz Pharmaceuticals (NASDAQ:JAZZ) and Sealed Air Corp. (NYSE:SEE): These small positions (less than ~1% of the portfolio each) saw increases last quarter but were disposed of this quarter.

American International Group (NYSE:AIG), Eclipse Resources (NYSE:ECR), and Kite Pharmaceuticals (NASDAQ:KITE): These were very small (less than ~1% of the portfolio each) stakes that were decreased last quarter and disposed of this quarter.

Amsurg Corporation (NASDAQ:AMSG), Apple Inc. (NASDAQ:AAPL), Dover Corp. (NYSE:DOV), Home Depot (NYSE:HD), Johnson Controls (NYSE:JCI), Lowe's Companies (NYSE:LOW), Marriott Intl. (NYSE:MAR), MetLife Inc. (NYSE:MET), Pure Storage (NYSE:PSTG), Salesforce.com (NYSE:CRM), and Tesaro Inc. (NASDAQ:TSRO): These very small stakes (less than ~1% of the portfolio each) established last quarter were disposed of this quarter.

Stake Increases:

Facebook: FB is a top three ~10% of the portfolio position. It was purchased in Q1 2016 at prices between $94 and $116 and the stock is now at ~$136. Last quarter saw a ~7% trimming while this quarter saw a marginal increase.

Microsoft Corporation: MSFT is a top three ~6% portfolio stake established in Q2 2016 at prices between $48.50 and $56.50 and increased by ~140% last quarter at prices between $51 and $58.50. There was another ~60% increase this quarter at prices between $57 and $64. The stock is now at $64.36.

Encana Corp. (NYSE:ECA): ECA is a fairly large 4.74% portfolio stake. The vast majority of the position was purchased in Q1 2016 at prices between $3 and $6. Last two quarters have seen minor increases. The stock is now at $11.47.

Note: Viking Global owns ~9% of Encana.

JD.com (NASDAQ:JD): JD is a 4.36% of the US long portfolio position established in Q1 2016 at prices between $22.50 and $32.50 and increased by almost 50% the following quarter at prices between $20 and $30. There was another ~20% increase last quarter at prices between $20 and $27 and that was followed with a ~40% increase this quarter at prices between $23.50 and $28. The stock is now at $30.47.

Netflix Inc. (NASDAQ:NFLX): NFLX is 3.64% of the 13F portfolio stake. It was established in Q3 2015 at prices between $93 and $126 and increased by ~75% the following quarter at prices between $97 and $131. Q2 2015 saw a ~22% reduction at prices between $85 and $112 and that was followed with another ~60% selling last quarter at prices between $85 and $100. This quarter saw the pattern reverse: ~150% increase at prices between $98.50 and $128. The stock currently trades at $144.

Walgreen Boots Alliance (NASDAQ:WBA): WBA's stake is now at ~3% of the portfolio. It was first purchased in Q4 2013 and substantially increased in Q1 2014 at prices between $54 and $69. The next several quarters saw a ~40% selling at prices between $63 and $88. In Q2 2015, the pattern reversed: ~70% increase at prices between $83 and $93. It was a large ~8% portfolio stake at the time. The last four quarters saw the position almost sold out at prices between $75 and $87. The pattern reversed again this quarter as the position was rebuilt to a ~3% portfolio stake at prices between $77 and $88. The stock currently trades at $86.29.

Constellation Brands (NYSE:STZ): STZ stake is now at 2.74% of the portfolio. The original minutely small position saw an almost ~500% increase last quarter at prices between $161 and $168 and that was followed with a ~50% increase this quarter at prices between $145 and $171. The stock currently trades at ~$160. For investors attempting to follow Halvorsen, STZ is a good option to consider for further research.

Visa Inc. (NYSE:V), Liberty Global (NASDAQ:LBTYA) (NASDAQ:LBTYK), Eaton Corp. (NYSE:ETN), BioMarin Pharma. (NASDAQ:BMRN), Dentsply Sirona, and Incyte Corp. (NASDAQ:INCY): These are small starter positions (less than ~2% of the portfolio each) established last quarter and increased this quarter. The buildup indicates a bullish bias toward these businesses.

Humana Inc. (NYSE:HUM) and Shire plc (NASDAQ:SHPG): These are small (less than ~1% of the portfolio each) stakes that were decreased last quarter but saw increases this quarter.

Centene Corp. (NYSE:CNC) and Alibaba Group Holding (NYSE:BABA): These are minutely small positions (less than ~0.5% of the portfolio each) that saw increases this quarter. They are still too small to indicate a clear bias.

Stake Decreases:

Alphabet Inc.: GOOG is the largest 13F position at 10.29% of the portfolio. It was established in Q3 2014 at prices between $563 and $596. H1 2015 saw a huge ~425% increase at prices between $493 and $575. Q4 2015 saw an about turn: ~20% reduction at prices between $608 and $777 and that was followed with another ~15% selling in Q2 2016 at prices between $668 and $767. Last quarter saw the pattern reverse again: ~15% increase at prices between $692 and $787. The stock currently trades at $831. There was a minor ~5% trimming this quarter.

Amazon.com Inc.: AMZN is a top five position at 5.54% of the US long portfolio. It was established in Q2 2015 at prices between $370 and $446 and increased by roughly one-third the following quarter at prices between $429 and $548. Q4 2015 saw a ~15% reduction at prices between $512 and $694 while the following quarter saw a one-third increase at prices between $482 and $676. There was a ~15% trimming over the last two quarters at prices between $586 and $772. This quarter saw another ~45% reduction at prices between $719 and $844. The stock currently trades at $856. Halvorsen is harvesting gains.

Broadcom Ltd. (NASDAQ:AVGO) previously Avago: AVGO is a fairly large 3.55% of the portfolio stake established in Q2 2015 at prices between $117 and $148. It was increased by ~46% in Q3 2015 at prices between $109 and $138. There was a one-third stake increase in Q1 2016 primarily due to the acquisition of Broadcom Corporation that closed in January. Last quarter saw an about turn: ~55% reduction at prices between $150 and $177. The stock is currently at $214. There was a minor ~3% trimming this quarter. Viking Global is realizing gains.

Cabot Oil & Gas (NYSE:COG), Gulfport Energy (NASDAQ:GPOR), and Rice Energy (NYSE:RICE): These energy-related stocks were increased this quarter. Combined, they are at ~5% of the portfolio.

Note: Viking Global owns ~6% of Cabot Oil & Gas, ~5.5% of Rice Energy and ~4% of Gulfport Energy.

Biogen Inc. (NASDAQ:BIIB): BIIB saw a roughly 13 times increase in Q2 2016 at prices between $225 and $290. A third of that stake was sold last quarter at prices between $242 and $330 and that was followed with another ~10% trimming this quarter. The stock currently trades at ~$288 and the stake is at ~2.47% of the portfolio.

T-Mobile US (NASDAQ:TMUS): The TMUS position saw a 4 times increase in Q2 2016 at prices between $38 and $44. This quarter saw a ~40% selling at prices between $45 and $59. The stake is now at 2.20% of the portfolio and the stock is at $63.08.

MasterCard Inc. (NYSE:MA): MA is a ~2% of the US long portfolio position. The original stake was purchased in Q4 2011 at prices between $31 and $38 and the stake has wavered since. Recent activity follow: Q1 2015 saw a ~90% increase at prices between $81 and $93 while Q3 2015 saw a one-third decrease at prices between $87 and $98.50. The position was almost sold out in Q4 2015 at prices between $90 and $102.

Q1 2016 saw a huge build-up: ~1100% increase at prices between $80.50 and $97.50. Last two quarters had seen another ~300% increase at prices between $87 and $102. There was a ~44% reduction this quarter at prices between $100 and $107. The stock currently trades at ~$109.

Canadian Pacific Railway (NYSE:CP): The CP stake saw a huge ~280% increase to a 2.37% portfolio position (3.6M shares) last quarter at prices between $129 and $156. This quarter saw the position reduced by one-third at prices between $140 and $156. The stock is now at $153.

Note: CP has been in the portfolio since Q4 2013. The position size peaked in Q1 2015 at ~6.2M shares. The build-up was at prices between $123 and $215. The next five quarters through Q2 2016 saw a combined ~85% stake reduction at prices between $104 and $162.

Bank of America (NYSE:BAC), LyondellBasell Industries (NYSE:LYB), AstraZeneca plc (NYSE:AZN), Emerson Electric (NYSE:EMR), Universal Health Services (NYSE:UHS): These are small starter positions (less than ~1% of the portfolio each) established last quarter but reduced substantially this quarter.

GW Pharmaceuticals (NASDAQ:GWPH), Envision Healthcare (NYSE:EVHC), 58.com (NYSE:WUBA), Range Resources (NYSE:RRC): These are minutely small (less than ~0.5% of the portfolio each) stakes that saw further reductions this quarter.

Kept Steady:

Editas Medicine (NASDAQ:EDIT): EDIT is a minutely small 0.13% portfolio stake kept steady this quarter. Viking Global owns 4.7% of Editas.

Note: Regulatory filings show Viking Global owning 1.6M shares (~8% of business) of Calithera Biosciences (NASDAQ:CALA), 37.2M shares (~62% of the business) of Myovant Sciences (Pending:MYOV), 16M shares (29.3% of the business) of Arbutus Biopharma Corp. (NASDAQ:ABUS) and 75M shares (75.6% of the business) of Axovant Sciences Ltd (NYSE:AXON). The latter three positions are indirectly held through Roivant Sciences, which they acquired in 2015.

The spreadsheet below highlights changes to Halvorsen's US stock holdings in Q4 2016:

Disclosure: I am/we are long AIG, AZN, BAC, DOW.

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.

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