Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q3 2018 Update

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Includes: ABEO, ADI, ADSK, AET, AJG, AMRX, AMZN, ANAB, ANTM, AON, BABA, BERY, BIDU, BMRN, BPMC, BSX, BUD, CNC, COL, CP, CRM, CTLT, DCPH, DIS, DPZ, DWDP, ECA, EDIT, EFX, EIDX, ELAN, EQH, EXAS, FB, FWONK, GE, GOOG, GOOGL, HBI, HDB, HIG, ILMN, IQ, JAZZ, JT, LEN, LIFE, LIVN, LNC, LNG, LSXMA, MELI, MIDD, MPC, MSFT, MU, MYL, NFLX, OLN, PCG, PDD, PE, PGR, PLCE, PTEN, RACE, RJF, SYNH, TD, TMO, TMUS, TS, UNH, UROV, UTX, V, WPX, WYNN, X, XRAY
by: John Vincent
Summary

Halvorsen's 13F portfolio value increased from $17.47B to $18.06B. The number of positions increased from 60 to 64.

Viking Global increased Alibaba Group Holdings, Walt Disney, and Marathon Petroleum while reducing Facebook and Alphabet.

The top three positions are Alibaba Group Holdings, General Electric, and Anthem Inc. Together, they are at ~24% of the portfolio.

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 11/14/2018. 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 Q2 2018.

This quarter, Halvorsen’s 13F stock portfolio value increased 3.40% from $17.47B to $18.06B. The number of holdings increased from 60 to 64. Largest five individual stock positions are Alibaba Group Holdings, General Electric, Anthem Inc., Walt Disney, and Microsoft. They add up to ~38% 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:

PG&E Corp. (PCG), Berry Global (BERY), Ferrari NV (RACE), Wynn Resorts (WYNN), Mylan NV (MYL), Boston Scientific (BSX), Analog Devices (ADI), Exact Sciences (EXAS): These are small (less than ~1.5% of the portfolio each) positions established this quarter.

Note: Regulatory filings since the quarter ended show them owning 7.2M shares (5.4% of business) of Berry Global. This is compared to 5.18M shares in the 13F report.

Progressive Corp (PGR), Aon plc (AON), Children’s Place (PLCE), WPX Energy (WPX), Iqiyi Inc. (IQ), Cheniere Energy (LNG), Pinduoduo Inc. (PDD), Amneal Pharmaceuticals (AMRX), Elanco Animal Health (ELAN), Blueprint Medicines (BPMC), and LivaNova (LIVN): These are minutely small (less than ~0.5% of the portfolio each) stakes established this quarter.

Stake Disposals:

Anheuser Busch Inbev (BUD) and Equifax Inc. (EFX): These two positions built over the three quarters thru Q1 2018 were disposed this quarter. The 1.60% BUD position was built at prices between $103 and $126. The position saw a one-third reduction last quarter at prices between $92 and $110 and the disposal this quarter was at prices between $87 and $107. It is now at $76.16. The EFX stake had seen a ~350% increase in Q4 2017 at prices between $106 and $120. The 1.84% stake as of Q1 2018 was almost eliminated last quarter at prices between $111 and $128. The remainder stake was disposed this quarter. The stock is currently at ~$101.

Canadian Pacific Railway (CP): CP is a frequently traded stock that had been in the portfolio since Q4 2013. Recent activity follows: ~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 last quarter at prices between $173 and $195 and the elimination this quarter was at prices between $178 and $216. The stock is now at ~$203.

Baidu Inc. (BIDU): The 1.24% BIDU stake was purchased last quarter at prices between $220 and $284 and disposed this quarter at prices between $213 and $272. It is now at $183.

United States Steel (X): The 1.27% X position was purchased in Q1 2018 at prices between $33.50 and $46 and reduced by ~30% last quarter at prices between $32 and $38. The elimination this quarter was at prices between $28 and $38. The stock currently trades at $25.72.

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 next quarter at prices between $186 and $232 and that was followed with a ~60% reduction last quarter at prices between $230 and $292. The positon was eliminated this quarter at prices between $256 and $301. The stock currently goes for ~$263.

AXA Equitable (EQH), Aetna Inc. (AET), Dentsply Sirona (XRAY), Hanesbrands Inc. (HBI), Liberty Media Sirius XM (LSXMA), MercadoLibre (MELI), Rockwell Collins (COL), and Micron Technology (MU): These small (less than ~1% of the portfolio each) stakes were disposed this quarter.

Stake Increases:

Alibaba Group Holdings (BABA): BABA is currently the largest 13F position at 8.64% of the portfolio. It was established in Q1 2018 at prices between $172 and $205. There was a whopping ~355% stake increase this quarter at prices between $156 and $198 and the stock currently trades at ~$150. For investors attempting to follow Viking Global, BABA is a good option to consider for further research.

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

General Electric (GE) and DowDuPont (DWDP): These positions established last quarter were increased this quarter. The large (top three) 8.28% GE stake was purchased at prices between $12.75 and $15.30 and almost doubled this quarter at prices between $11 and $14. The stock currently trades below those ranges at $7.57. DWDP is a 3.70% portfolio position established at prices between $62 and $70 and increased marginally this quarter. It is now at ~$56.43.

Anthem Inc. (ANTM): The large (top three) 7.25% 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 ~$281. There was a ~7% increase this quarter.

Walt Disney (DIS) and BioMarin Pharma (BMRN): These two positions established in Q1 2018 saw huge increases in the last two quarters. The DIS stake saw a ~650% increase to a large (top five) ~7% portfolio position at prices between $99 and $117 and the stock is now at ~$112. The 2.22% BMRN stake was increased by ~140% at prices between $76 and $106 and it is currently at $93.78.

Encana Corp. (ECA): ECA is a large 5.38% 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 $7.12. Last two quarters had seen a combined ~24% selling at prices between $10 and $14. There was a ~4% increase this quarter.

Note: Viking Global owns ~7% of Encana.

Marathon Petroleum (MPC): MPC was a minutely small stake established last quarter. The position was built to a medium-sized ~3% position this quarter at prices between $70 and $86. The stock currently trades well below that range at $61.73.

Amazon.com Inc. (AMZN): AMZN is a ~2% 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 follows: the fairly large ~4% portfolio position as of Q4 2017 was almost sold out next quarter at prices between $1189 and $1598. The position was built back up last quarter at prices between $1370 and $1735. This quarter saw a ~15% increase. The stock currently trades at $1502.

Salesforce.com (CRM): CRM is a 1.92% 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. Q1 2018 saw another ~55% selling at prices between $104 and $128. The stock currently trades at ~$122. The stake was doubled over the last two quarters at prices between $115 and $160.

United Health (UNH): UNH is a 1.83% 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 ~$262. There was a ~5% increase this quarter.

Netflix Inc. (NFLX): NFLX is now a small 1.22% 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. The five quarters thru Q2 2018 had seen the position sold down by ~95% at prices between $146 and $417. The stock is now at ~$259. Viking Global realized huge gains. This quarter saw a one-third increase at prices between $317 and $419.

AnaptysBio Inc. (ANAB), HDFC Bank (HDB), Jazz Pharmaceuticals (JAZZ), Olin Corp (OLN), and Syneos Health (SYNH): These very small (less than 1% of the portfolio each) stakes were increased this quarter.

Stake Decreases:

Microsoft Corporation (MSFT): MSFT is a large (top five) 6.50% 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 ~$103. Last quarter saw a ~6% increase while this quarter there was a similar reduction.

United Technologies (UTX): UTX is a 4.56% of the portfolio position 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 last quarter at prices between $118 and $128. The position was sold down by ~45% this quarter at prices between $125 and $142. It is now at ~$129.

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

Parsley Energy (PE): The 2.69% 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 $20.66. There was a ~22% selling Q1 2018 at prices between $21.50 and $31 while last quarter there was a ~52% increase at prices between $26.50 and $33. There was a ~24% reduction this quarter at prices between $26.50 and $33.

Note: Viking Global has a ~5% ownership stake in Parsley Energy.

Thermo Fisher Scientific (TMO): TMO is a 2.54% stake purchased in Q4 2017 at prices between $182 and $200 and increased by ~190% last quarter at prices between $203 and $220. This quarter saw a ~25% selling at prices between $206 and $249. The stock is now at $235.

Liberty Media Formula One (FWONK): FWONK is a 2.31% position purchased in Q2 2017 at prices between $27.50 and $35. It is now at $29.74. The position has seen minor trimming in the last three quarters.

Raymond James (RJF): The ~2% 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 $76.64. There was a ~6% trimming last quarter while this quarter there was a ~30% reduction.

Middleby Corp (MIDD): MIDD is a 1.72% portfolio position established last quarter at prices between $99 and $132. There was a ~20% selling this quarter at prices between $99 and $130. The stock is currently at ~$117.

Note: Viking Global has a ~4.3% ownership stake in Middleby Corp.

Facebook Inc. (FB): FB is now a small 1.62% of the portfolio stake. 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. Q1 2018 saw a ~140% increase at prices between $152 and $193. There was a roughly one-third selling last quarter at prices between $155 and $202 and another ~70% reduction this quarter at prices between $159 and $218. The stock currently trades at $132.

Lincoln National (LNC): The LNC position saw a ~120% increase to a 1.67% portfolio stake last quarter at prices between $62 and $72. This quarter saw a ~30% selling at prices between $62 and $70. The stock currently trades at $60.97.

Alphabet Inc. (GOOG) (GOOGL): GOOG was a ~4% of the portfolio stake as of last quarter. 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 follows: Q4 2017 saw a one-third reduction at prices between $952 and $1077 and that was followed with a ~38% selling last quarter at prices between $1005 and $1175. This quarter saw the position almost sold out at prices between $1102 and $1268. The stock is now at $1024.

Visa Inc. (V): The ~1% V stake was purchased in H2 2016 at prices between $74 and $83. 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. Last four quarters saw a ~88% reduction at prices between $105 and $150. The stock is now at ~$133. Viking Global is harvesting gains.

Autodesk Inc. (ADSK): ADSK is a ~1% 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 at ~$133. The position was reduced by ~75% over the last two quarters at prices between $123 and $157.

Lennar Corporation (LEN): LEN is a 0.88% position purchased in Q1 2017 at prices between $43 and $53 and increased by ~80% in Q3 2017 at prices between $50 and $55. Last four quarters have seen a ~64% selling at prices between $50 and $72. The stock is now at $42.74.

Hartford Financial Services (HIG): HIG is now a minutely small 0.11% position. Last quarter had seen a ~175% increase to a 1.70% portfolio stake at prices between $50 and $55 but the position was almost sold out this quarter at prices between $49 and $54. The stock currently trades at $44.10.

Abeona Therapeutics (ABEO), Catalent Inc. (CTLT), Centene Corp (CNC), Deciphera Pharmaceuticals (DCPH), Gallagher Arthur J & Co. (AJG), Illumina Inc. (ILMN), Jianpu Technology (JT), Patterson-UTI Energy (PTEN), T-Mobile US (TMUS), Tenaris SA (TS), and Toronto-Dominion (TD): These are very small (less than ~1% of the portfolio each) positions reduced this quarter.

Kept Steady:

aTyr Pharma (LIFE), Editas Medicine (EDIT), and Eidos Therapeutics (EIDX): These are minutely small (less than ~0.5% of the portfolio each) stakes kept steady this quarter.

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

Note: Regulatory filings show Viking Global owning 22.7M shares (75.6% of business) of Urovant Sciences (UROV) – around 2.7M shares were added during the quarter at ~$14 per share.

The spreadsheet below highlights changes to Halvorsen’s 13F stock holdings in Q3 2018:

Ole Andreas Halvorsen - Viking Global - Q3 2018 13F Report

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