Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
Today, let's look at Viking Global Investors, founded in 1999 by Andreas Halvorsen and David Ott, who had previously worked together at Julian Robertson's respected Tiger Management firm. Viking is known as a long-short global equity fund, meaning that it aims to maintain long positions in companies on which it's bullish and short positions in those where it's bearish.
The company's reportable stock portfolio totaled $14.4 billion in value as of Dec. 31, 2012.
So what does Viking's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Alexion Pharmaceuticals and Las Vegas Sands. Other new holdings of interest include EMC (NYSE:EMC) and TIBCO Software (UNKNOWN:TIBX.DL). EMC is a $50 billion storage giant, with solid growth prospects in the rapidly growing cloud-computing and Big Data arenas. It also holds an 80% ownership stake in virtualization specialist VMware. EMC has been held back some by softness in technology spending due to a weak global economy, but that won't last forever. In the meantime, it has struck a partnership with Lenovo, which might help it in China, and its recent earnings report was solid, with strong operating income growth
TIBCO is another Big Data operator, and one that got whacked late last year after posting disappointing earnings results. It had previously posted a long string of strong earnings and pointed to softness in orders as well as some weather interference for the miss. Still, management is upbeat, as are some of my colleagues, such as Anders Bylund, who bought shares. Some think the company may end up acquired by another.
Among holdings in which Viking Global increased its stake was BlackBerry (NYSE:BB). BlackBerry, until very recently known as Research In Motion, has been fighting strong competition from iPhones and Android devices. (Apple, for example, is expected to debut a lower-cost smartphone that might appeal to businesses that buy in bulk for employees, threatening BlackBerry's longtime strength in the corporate market.) BlackBerry recently debuted some new devices, but some think that's not enough to turn the company around.
Viking Global reduced its stake in lots of companies, including Sherwin-Williams (NYSE:SHW), which has averaged annual growth of nearly 30% over the past five years, partly on signs of a housing market recovery. Last year, the company bought global paint giant Comex, based in Mexico, for $2.3 billion. Some don't like that the deal will add to Sherwin-Williams' debt, but others see it as a smart strategic move. In a sign of strength, the company recently boosted its dividend by 28%. With a forward P/E ratio of 19, it's reasonable to see the stock as not a bargain right now.
Finally, Viking's biggest closed positions included Apple and priceline.com. Other closed positions of interest include ARIAD Pharmaceuticals (NASDAQ:ARIA), which received FDA approval for its leukemia drug Iclusig -- though its launch hasn't been as strong as some had hoped. ARIAD's bone-tumor drug ridaforolimus was rejected in Europe, but it might still prove effective against other cancers. The company has been spending heavily on research and development, and it needs some more success from its pipeline. Investors are hoping for European approval for Iclusig and eventual FDA approvals for other treatments.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.