Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q2 2018 Update

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Includes: ABEO, ABUS, ADS, ADSK, AET, AJG, AKS, AMZN, ANAB, ANTM, AXON, BABA, BIDU, BMRN, BUD, CLF, CLR, CNC, COL, CP, CRM, CTLT, CVS, DCPH, DIS, DPZ, DWDP, ECA, EDIT, EFX, EIDX, EQH, FB, FWONK, GE, GOOG, GOOGL, HBI, HDB, HIG, ILMN, IQ, JAZZ, JD, JT, LEN, LIFE, LNC, LSXMA, MELI, MIDD, MOMO, MPC, MSFT, MU, MYOV, NFLX, NTES, OLN, PE, PTEN, RJF, SYNH, TD, TDG, TMO, TMUS, TS, UNH, UTX, V, WDC, WFC, X, XEC, XRAY
by: John Vincent
Summary

Halvorsen's 13F portfolio value increased from $16.61B to $17.47B. The number of positions increased from 58 to 60.

Viking Global doubled United Technologies while adding General Electric and dropping Wells Fargo.

The top three positions are United Technologies, Facebook, and Microsoft.

This article is part of a series that provides an ongoing analysis of the changes made to Ole Andreas Halvorsen's 13F stock portfolio on a quarterly basis. It is based on Viking Global's regulatory 13F Form filed on 08/14/2018. 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 Q1 2018.

This quarter, Halvorsen's 13F stock portfolio value increased ~5% from $16.61B to $17.47B. The number of holdings increased from 58 to 60. Largest five individual stock positions are United Technologies (NYSE:UTX), Facebook (NASDAQ:FB), Microsoft (NASDAQ:MSFT), Anthem (NYSE:ANTM), and General Electric (NYSE:GE). They add up to ~32% 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:

General Electric (GE) and DowDuPont (DWDP): These are medium-sized new positions established this quarter. The 5.33% GE stake was purchased at prices between $12.75 and $15.30 and the stock currently trades below that range at $12.51. DWDP is a 3.85% portfolio position established at prices between $62 and $70 and it is now at ~$70.

Middleby Corp (MIDD) and Baidu Inc. (BIDU): These are small (less than ~2% of the portfolio each) new stakes purchased this quarter. MIDD is a 1.81% portfolio position established at prices between $99 and $132 and the stock is currently at ~$126. The 1.24% BIDU stake was purchased at prices between $220 and $284 and it is now below that range at $215.

Note: Viking Global has a 5.4% ownership stake in Middleby Corp.

T-Mobile US (TMUS), Illumina Inc. (ILMN), Hanesbrands Inc. (HBI), Olin Corp (OLN), Patterson UTI Energy (PTEN), and Centene Corp (CNC): These are very small (less than ~1% of the portfolio each) positions established this quarter.

AXA Equitable (EQH), Marathon Petroleum (MPC), Aetna Inc. (AET), Eidos Therapeutics (EIDX), Rockwell Collins (COL), and Micron Technology (MU): These are minutely small (less than ~0.5% of the portfolio each) stakes established this quarter.

Note: Viking Global has a 5.4% ownership stake in Eidos Therapeutics.

Stake Disposals:

Wells Fargo (WFC): WFC was a ~4% of the portfolio stake established in Q2 2017 at prices between $51 and $56 and sold down by ~85% the following quarter at prices between $49.50 and $56. Q4 2017 saw a reversal: ~180% increase at prices between $53 and $62. There was another ~140% increase last quarter at prices between $51 and $66. The disposal this quarter was at prices between $50 and $56. The stock is now at $57.93.

TransDigm Group (TDG): TDG position was established in Q4 2017 at prices between $256 and $285. Last quarter saw a ~80% stake increase at prices between $270 and $317. The ~2% portfolio stake as of last quarter was eliminated this quarter at prices between $301 and $346. The stock currently trades at $354.

Alliance Data Systems (ADS): ADS was a minutely small position established in Q4 2017. Last quarter saw the stake built to a medium-size 2.34% of the portfolio position at prices between $212 and $276. The position was disposed this quarter at prices between $195 and $237. The stock is now at $238.

Western Digital (WDC): WDC was a 1.67% portfolio position established last quarter at prices between $80 and $107 and sold this quarter at prices between $77 and $93. It is now at $57.79.

AK Steel (AKS), AveXis Inc., CVS Health Group (CVS), Cimarex Energy (XEC), Cleveland Cliffs (CLF), Continental Resources (CLR), Iqiyi Inc. (IQ), JD.com (JD), Momo Inc. (MOMO), and NetEase Inc. (NTES): These very small (less than ~1% of the portfolio each) positions were disposed this quarter.

Stake Increases:

United Technologies (UTX): UTX is now the largest 13F position at 7.61% of the portfolio. It was first purchased in Q3 2017 at prices between $110 and $124 and increased by ~43% the following quarter at prices between $116 and $128. The stake was almost doubled this quarter at prices between $118 and $128. It is now at ~$134.

Note: United Technologies has had a previous round-trip in the portfolio. A small 0.73% stake was disposed in Q2 2017.

Microsoft Corporation (MSFT): MSFT is a large (top three) 6.21% position. It was established in Q2 2016 at prices between $48.50 and $56.50 and increased by ~140% in the following quarter at prices between $51 and $58.50. There was another ~60% increase in Q4 2016 at prices between $57 and $64 and that was followed with a one-third increase the following quarter at prices between $62 and $66. Q2 2017 saw the pattern reverse: one-third selling at prices between $65 and $72.50 and that was followed with another ~50% reduction in the following quarter at prices between $68 and $75.50. The stock is now at ~$109. This quarter saw a ~6% increase.

Anthem Inc. (ANTM): The large (top five) ~6% ANTM stake was first purchased in Q2 2017 at prices between $165 and $193 and increased by ~15x over the next three quarters at prices between $181 and $258. The stock is now at ~$271. There was a marginal increase this quarter.

Parsley Energy (PE): The 3.74% PE position was established in Q3 2017 at prices between $24 and $30 and increased by ~130% the following quarter at around the same price range. It is now at $26.44. There was a ~22% selling last quarter at prices between $21.50 and $31, while this quarter there was a ~52% increase at prices between $26.50 and $33.

Note: Viking Global has a ~7% ownership stake in Parsley Energy.

Walt Disney (DIS), BioMarin Pharma (BMRN), and Hartford Financial Services (HIG): These three positions established last quarter saw huge increases this quarter. The DIS stake saw a ~300% increase to a 3.45% portfolio position at prices between $98.50 and $109 and the stock is now at ~$110. The 1.76% BMRN stake was almost doubled at prices between $76 and $99 and it is currently at $96.16. HIG is 1.70% position that saw a ~175% increase this quarter at prices between $50 and $55. The stock currently trades at $49.88.

Thermo Fisher Scientific (TMO): TMO is a ~3% stake purchased in Q4 2017 at prices between $182 and $200 and increased by ~190% this quarter at prices between $203 and $220. The stock is now at $236.

Lennar Corporation (LEN): LEN is a 1.63% position purchased in Q1 2017 at prices between $43 and $53 and increased by ~80% in Q3 2017 at prices between $50 and $55. There was a ~20% reduction in Q4 2017 at prices between $53 and $64 and that was followed with a one-third selling last quarter at prices between $56.50 and $72. The stock is now at $52.34. There was a ~10% increase this quarter.

Amazon.com Inc. (AMZN): AMZN is a 1.56% of the 13F portfolio position. 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. The position has wavered since. Recent activity follow: the fairly large ~4% portfolio position as of Q4 2017 was almost sold out last quarter at prices between $1,189 and $1,598. The position was built back up to 1.56% portfolio stake this quarter at prices between $1,370 and $1,735. The stock currently trades at $1,958.

Salesforce.com (CRM): CRM is a 0.91% portfolio position established in Q1 2017 at prices between $70.50 and $84 and increased by ~80% the following quarter at prices between $82 and $91. There was a ~25% selling in Q3 2017 at prices between $86 and $98 and that was followed with a ~35% reduction the following quarter at prices between $93.50 and $109. Last quarter saw another ~55% selling at prices between $104 and $128. The stock currently trades at ~$149. There was a ~12% increase this quarter.

Lincoln National (LNC): The LNC position saw a ~120% increase to a 1.67% portfolio stake this quarter at prices between $62 and $72. The stock currently trades near the low end of that range at $65.35.

AnaptysBio Inc. (ANAB), Catalent Inc. (CTLT), Arthur J. Gallagher & Co. (AJG), HDFC Bank (HDB), Jazz Pharmaceuticals (JAZZ), Liberty Media Sirius XM (LSXMA), and Tenaris SA (TS): These very small (less than 1% of the portfolio each) stakes were increased this quarter.

Stake Decreases:

Facebook Inc. (FB): FB is the second-largest position at ~7% of the portfolio. It was purchased in Q1 2016 at prices between $94 and $116. There was a ~60% reduction in Q2 2017 at prices between $139 and $155 and that was followed with another ~30% selling in the following quarter at prices between $148 and $174. Last quarter saw a whopping ~140% increase at prices between $152 and $193. The stock is now at ~$162. There was a roughly one-third selling this quarter at prices between $155 and $202.

Encana Corp. (ECA): ECA is a large 5.31% of the portfolio position. The vast majority of the stake was purchased in Q1 2016 at prices between $3 and $6. H1 2017 saw a ~18% reduction at prices between $8.75 and $13.25. Q3 2017 saw the pattern reverse: ~30% stake increase at prices between $8.40 and $11.80. The stock is now at $12.51. Last two quarters have seen a combined ~24% selling at prices between $10 and $14.

Note: Viking Global owns ~7% of Encana.

Alphabet Inc. (GOOG) (GOOGL): GOOG is a ~4% of the portfolio stake. It was established in Q3 2014 and H1 2015 saw a huge ~425% increase at prices between $493 and $575. The position has wavered since. Recent activity follow: Q4 2017 saw a one-third reduction at prices between $952 and $1,077. There was a marginal increase last quarter while this quarter there was a ~38% selling at prices between $1,005 and $1,175. The stock is now at $1,171.

Raymond James (RJF): The ~3% RJF position was first purchased in Q2 2017 at prices between $71.50 and $77 and increased by ~7x over the next three quarters at prices between $75 and $99. The stock currently trades at $91.82. There was a ~6% trimming this quarter.

Autodesk Inc. (ADSK): ADSK is a 2.45% portfolio stake established in Q3 2017 at prices between $99 and $117 and increased by two-thirds the following quarter at prices between $104 and $130. The stock currently trades well above those ranges at ~$149. There was a ~14% stake increase last quarter while this quarter saw a ~30% selling at prices between $123 and $141.

Visa Inc. (V): The 2.43% V stake was purchased in H2 2016 at prices between $74 and $83. Q1 2017 had seen a ~12% trimming at prices between $80 and $90. There was a ~85% increase in the following quarter at prices between $89 and $97 and that was followed with another ~30% increase in Q3 2017 at prices between $93 and $106. Q4 2017 saw a reversal: ~25% selling at prices between $105 and $114 and that was followed with a one-third reduction last quarter at prices between $114 and $126. There was another ~38% selling this quarter at prices between $118 and $136. The stock is now at ~$145. Viking Global is harvesting gains.

Liberty Media Formula One (FWONK): FWONK is a 2.42% position purchased in Q2 2017 at prices between $27.50 and $35. It is now at $35.95. The position has seen minor trimming in the last two quarters.

UnitedHealth (UNH): UNH is a 1.67% portfolio stake established in Q4 2016 at prices between $134 and $164 and increased by ~62% the following quarter at prices between $158 and $172. The next three quarters had seen a ~58% selling at prices between $164 and $228. There was a ~3% trimming last quarter and that was followed with a ~18% selling this quarter. The stock is now at ~$270.

Alibaba Group Holdings (BABA) and United States Steel (X): These two stakes established last quarter were reduced this quarter. BABA is a 2.22% portfolio stake established at prices between $172 and $205 and the stock currently trades at ~$160. There was a ~5% trimming this quarter. The 1.27% X position was purchased at prices between $33.50 and $46 and it currently trades at ~$30. There was a ~30% selling this quarter at prices between $32 and $38.

Note 1: Viking Global controls 3.5% of United States Steel.

Note 2: BABA is a frequently traded position in Viking's portfolio.

Anheuser-Busch InBev (BUD) and Equifax Inc. (EFX): These two positions built over the last three quarters saw selling this quarter. The 1.60% BUD position was first purchased at prices between $110 and $123 and increased by ~80% in Q4 2017 at prices between $110 and $126. There was another ~50% stake increase last quarter at prices between $103 and $116. The position saw a one-third reduction this quarter at prices between $92 and $110 and it is now at $90.23. The EFX stake had seen a ~350% increase in Q4 2017 at prices between $106 and $120. The 1.84% stake as of last quarter was almost eliminated this quarter at prices between $111 and $128 and it currently trades at ~$136.

Netflix Inc. (NFLX): NFLX is now a small ~1% of the 13F portfolio stake. It was established in H2 2015 at prices between $93 and $131. It was a fairly large ~3.5% of the portfolio (~7.6M shares) stake at the time. Last five quarters have seen the position sold down by ~95% at prices between $146 and $417. The stock is now at ~$347. Viking Global realized huge gains.

Canadian Pacific Railway (CP): CP is a frequently traded stock that has been in the portfolio since Q4 2013. Recent activity follow: ~90% increase in Q3 2017 at prices between $151 and $169 followed with a ~30% reduction next quarter at prices between $165 and $185. There was another two-thirds reduction this quarter at prices between $173 and $195. The stock is now at ~$209 and the stake is at 0.86% of the portfolio.

Domino's Pizza (DPZ): The 0.80% DPZ position saw a ~500% increase in Q4 2017 at prices between $169 and $209. There was a ~40% selling last quarter at prices between $186 and $232 and that was followed with a ~60% reduction this quarter at prices between $230 and $292. The stock currently goes for ~$291.

Abeona Therapeutics (ABEO), Deciphera Pharmaceuticals (DCPH), Dentsply Sirona (XRAY), Editas Medicine (EDIT), Jianpu Technology (JT), MercadoLibre (MELI), Syneos Health (SYNH), and Toronto Dominion (TD): These are very small (less than 0.65% of the portfolio each) positions reduced this quarter.

Note: Viking Global controls ~5% of Abeona Therapeutics and ~4% of Deciphera Pharmaceuticals.

Kept Steady:

aTyr Pharma (LIFE): LIFE is a minutely small 0.01% stake kept steady this quarter.

Note: Regulatory filings show Viking Global owning 38.34M shares (~63% of the business) of Myovant Sciences (MYOV), 16M shares (~29% of the business) of Arbutus Biopharma Corp. (ABUS) and 89M shares (~73% of the business) of Axovant Sciences Ltd. (AXON). The three positions are indirectly held through Roivant Sciences, which it acquired in 2015.

The spreadsheet below highlights changes to Halvorsen's 13F stock holdings in Q2 2018:

Ole Andreas Halvorsen - Viking Global - Q2 2018 13F Report

Disclosure: I am/we are long BABA, GE, JD. 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.

Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.