Tracking Ole Andreas Halvorsen's Viking Global Portfolio - Q4 2018 Update

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Includes: AAL, ABEO, ADBE, ADI, ADSK, AJG, ALGN, AMRX, AMZN, ANAB, ANTM, AON, BA, BABA, BERY, BMRN, BPMC, BSX, CGNX, CNC, CP, CRM, CTLT, CTRP, DCPH, DIS, DVA, DWDP, ECA, EDIT, EIDX, ELAN, EXAS, FANG, FB, FWONK, GE, GOOG, GOOGL, HDB, HIG, ILMN, IQ, JAZZ, JT, LEN, LIFE, LIVN, LNC, LNG, MIDD, MPC, MRNA, MSFT, MYL, NFLX, OLN, PCG, PDD, PE, PGR, PLCE, PTEN, RACE, RJF, SEE, SYNH, TD, TMO, TMUS, TS, UNH, UROV, UTX, V, WCG, WPX, WYNN, Z, ZEN
by: John Vincent
Summary

Halvorsen's 13F portfolio value decreased from $18.06B to $17.57B. The number of positions decreased from 64 to 56.

Viking Global increased Amazon.com, Alphabet, Netflix, and Visa while dropping General Electric and reducing Encana.

The top three positions are Alibaba Group Holdings, Anthem Inc., and Microsoft. Together, they are at ~23% 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 02/14/2019. 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 2018.

This quarter, Halvorsen’s 13F stock portfolio value decreased ~3% from $18.06B to $17.57B. The number of holdings decreased from 64 to 56. Largest five individual stock positions are Alibaba Group Holdings, Anthem Inc., Microsoft, Amazon.com, and Alphabet. They add up to just over one-third of the 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:

Adobe Systems (ADBE): ADBE is a medium-sized 3.58% portfolio stake established this quarter at prices between $205 and $275 and the stock currently trades at $255.

Moderna Inc. (MRNA), American Airlines (AAL), and Boeing (BA): These are small (less than ~1.5% of the portfolio each) new stakes established this quarter.

Note: MRNA had an IPO in December. It was priced at $23 per share (~$18.50 first day close) and currently trades at $20.93. Viking Global’s stake goes back to 2015 when they made an investment in Moderna’s funding round. Their ownership stake in Moderna is currently at 5.4%.

Zillow Group (Z), Diamondback Energy (FANG), DaVita Inc. (DVA), WellCare Health Plans (WCG), Align Technology (ALGN), Canadian Pacific Railway (CP), Zendesk Inc. (ZEN), Cognex Corp (CGNX), Sealed Air Corp (SEE), and CTrip.com (CTRP): These are very small (less than ~1% of the portfolio each) positions established this quarter.

Note: Canadian Pacific Railway is back in the portfolio after a quarter’s gap. It is a frequently traded stock that had been in the portfolio since Q4 2013. The disposal last quarter was at prices between $178 and $216. The stock is now at $205.

Stake Disposals:

General Electric (GE): The large (top three) 8.28% GE stake was purchased in Q2 2018 at prices between $12.75 and $15.30 and almost doubled last quarter at prices between $11 and $14. The disposal this quarter was at prices between $6.75 and $13.50. The stock currently trades at $9.58.

Autodesk Inc. (ADSK): ADSK was a 2.64% portfolio stake established in H2 107 at prices between $99 and $130. The position was reduced by ~75% over the last two quarters at prices between $123 and $157. The remaining stake was disposed this quarter at prices between $118 and $156. The stock currently trades at ~$152.

Hartford Financial Services (HIG): HIG stake had seen a ~175% increase in Q2 2018 to a 1.70% portfolio stake at prices between $50 and $55 but the position was almost sold out last quarter at prices between $49 and $54. The stock currently trades at $48.11. The minutely small remainder stake was eliminated this quarter.

Lincoln National (LNC): The LNC position saw a ~120% increase to a 1.67% portfolio stake in Q2 2018 at prices between $62 and $72. Last quarter saw a ~30% selling at prices between $62 and $70 and the disposal this quarter was at prices between $48.50 and $70.50. The stock currently trades at $60.17.

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 $17.28. The stake had wavered. Last quarter saw a ~24% reduction at prices between $26.50 and $33 and the elimination this quarter was at prices between $14.50 and $30.70.

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

Analog Devices (ADI), Cheniere Energy (LNG), Children’s Place (PLCE), Elanco Animal Health (ELAN), Ferrari NV (RACE), LivaNova (LIVN), PG&E Corp. (PCG), Pinduoduo Inc. (PDD), WPX Energy (WPX), and Wynn Resorts (WYNN): These new positions established last quarter were disposed this quarter.

Deciphera Pharmaceuticals (DCPH), HDFC Bank (HDB), Jianpu Technology (JT), Olin Corp (OLN), Patterson UTI Energy (PTEN), Tenaris SA (TS), and Toronto Dominion (TD): These very small (less than ~1% of the portfolio each) positions were disposed this quarter.

Stake Increases:

Alibaba Group Holdings (BABA): BABA is currently the largest 13F position at 7.95% of the portfolio. It was established in Q1 2018 at prices between $172 and $205. There was a whopping ~355% stake increase last quarter at prices between $156 and $198 and the stock currently trades at ~$175. For investors attempting to follow Viking Global, BABA is a good option to consider for further research. This quarter also saw a ~8% stake increase

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

Anthem Inc. (ANTM): The large (top three) 7.62% 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 well above those ranges at ~$295. There was a ~15% increase over the last two quarters.

Microsoft Corporation (MSFT): MSFT is a large (top three) 7.61% 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 ~$111. This quarter saw a ~28% increase at prices between $94 and $116.

Amazon.com Inc. (AMZN): AMZN is now a top five 5.67% 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 to a ~2% portfolio stake in Q2 2018 at prices between $1370 and $1735. This quarter saw a whopping 260% stake increase at prices between $1344 and $2005. The stock currently trades at $1621.

Alphabet Inc. (GOOG) (GOOGL): The GOOG stake 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 next quarter at prices between $1005 and $1175. Last quarter saw the position almost sold out at prices between $1102 and $1268. The position was built back up to a top five 5.52% position this quarter at prices between $976 and $1203. The stock is now at $1142.

Netflix Inc. (NFLX): NFLX is now a fairly large 4.62% of the 13F portfolio stake. It was established in H2 2015 at prices between $93 and $131. The five quarters thru Q2 2018 had seen the position almost sold out at prices between $146 and $417 realizing huge gains. The position was built back up this quarter at prices between $234 and $381. The stock is now at $350.

Visa Inc. (V): The 4.60% 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 the position almost sold out at prices between $105 and $150. The position was rebuilt this quarter at prices between $122 and $151. The stock currently trades at $147.

Marathon Petroleum (MPC): MPC was a minutely small stake established in Q2 2018. The position was built to a medium-sized position last quarter at prices between $70 and $86. This quarter saw another ~85% stake increase to a 4.45% portfolio position at prices between $54 and $86. The stock is now at $57.50.

United Technologies (UTX): UTX is a 4.23% 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 in Q2 2018 at prices between $118 and $128. The position was sold down by ~45% last quarter at prices between $125 and $142 while this quarter saw a ~18% stake increase. It is now at ~$124.

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

UnitedHealth (UNH): UNH is a ~4% 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. This quarter saw a ~130% stake increase at prices between $233 and $286 and the stock is currently at $237.

Salesforce.com (CRM): CRM is a ~4% 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 ~$155. Last three quarters have seen a ~400% stake increase at prices between $115 and $160.

Facebook Inc. (FB): FB is 3.58% 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 roughly one-third selling next quarter at prices between $155 and $202 and another ~70% reduction last quarter at prices between $159 and $218. The position was built back up this quarter at prices between $124 and $169. The stock currently trades at $170.

BioMarin Pharma (BMRN): The 2.47% BMRN stake was built last year at prices between $76 and $106. It is currently at ~$90.

AnaptysBio Inc. (ANAB), Amneal Pharmaceuticals (AMRX), Aon plc (AON), Berry Global (BERY), Blueprint Medicines (BPMC), Catalent Inc. (CTLT), Centene Corp (CNC), Exact Sciences (EXAS), Illumina Inc. (ILMN), iQUYI Inc. (IQ), Progressive Corp (PGR), and T-Mobile US (TMUS): These are small (less than ~1.5% of the portfolio each) stakes increased this quarter.

Note: Regulatory filings since the quarter ended show them owning 6.95M shares of Berry Global (5.3% of the business). This is compared to 5.5M shares (4.2% of business) in the 13F Report.

Stake Decreases:

Walt Disney (DIS): The 2.11% DIS stake was established in Q1 2018. It was increased by ~650% over the next two quarters at prices between $99 and $117. The position saw a 70% selling this quarter at prices between $100 and $119 and the stock is now at ~$114.

Liberty Media Formula One (FWONK): FWONK is a 1.90% position purchased in Q2 2017 at prices between $27.50 and $35. It is now at $32.81. The position has seen minor trimming in the last four quarters.

DowDuPont (DWDP): DWDP is a 1.78% portfolio position established in Q2 2018 at prices between $62 and $70. The stake was sold down by ~44% this quarter at prices between $49 and $65. It is now at $54.68.

Raymond James (RJF): The ~1% 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 $80.35. Last three quarters saw the stake sold down by ~60% at prices between $69 and $102.

Thermo Fisher Scientific (TMO): TMO is now a small 0.70% position. It was purchased in Q4 2017 at prices between $182 and $200 and increased by ~190% in Q2 2018 at prices between $203 and $220. Last quarter saw a ~25% selling at prices between $206 and $249 and that was followed with a ~70% selling this quarter at prices between $209 and $252. The stock is now at $250.

Middleby Corp (MIDD): The MIDD position was established in Q2 2018 at prices between $99 and $132. There was a ~20% selling last quarter at prices between $99 and $130 and this quarter saw an additional ~75% selling at prices between $98 and $126. The stock is currently at ~$124 and the stake is now minutely small at 0.36%.

Encana Corp. (ECA): ECA was a large 5.38% of the portfolio position as of last quarter. This quarter saw a ~90% reduction to a minutely small stake at prices between $5.11 and $13.50. The vast majority of the original stake was purchased in Q1 2016 at prices between $3 and $6. The stock is now at $6.66. Viking Global realized gains.

Abeona Therapeutics (ABEO), Boston Scientific (BSX), Gallagher Arthur J & Co. (AJG), Jazz Pharmaceuticals (JAZZ), Lennar Corporation (LEN), Mylan NV (MYL), and Syneos Health (SYNH): These very small (less than ~1% of the portfolio each) positions were reduced during the quarter.

Kept Steady:

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

Note: Viking Global has 5.4% ownership stake each in Eidos Therapeutics & Editas Medicine and a 9.5% stake in aTyr Pharma.

Note: Regulatory filings show Viking Global owning 22.7M shares (75.6% of business) of Urovant Sciences (UROV) – around 2.7M shares were added last quarter at ~$14 per share. The stock is currently at ~$13.

The spreadsheet below highlights changes to Halvorsen’s 13F stock holdings in Q4 2018:

Ole Andreas Halvorsen - Viking Global Investors - Q4 2018 13F Report Q/Q Comparison

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