Billionaire Andreas Halvorsen’s Top 10 Stock Picks

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In this article, we presented billionaire Andreas Halvorsen’s top 10 stock picks. Click to skip ahead and see Billionaire Andreas Halvorsen’s Top 5 Stock Picks.

The billionaire Andreas Halvorsen’s Viking Global Investors LP has beaten the broader market index in 2020 by returning 25% after management and performance fees. This is not the first time the Greenwich-based hedge fund has topped the market indices. Between 1999 to 2009, Viking Global’s Equities III fund has generated average returns of 22%. Moreover, its returns stood around 119% between June 2005 and March 2010, outperforming the MSCI World Index return of 11%.

Viking Global hedge fund has also seen several down years. For instance, the fund lost 4% net of fees in 2016 mainly due to bets on pharmaceutical stocks.

In 2017, Viking Global Investors’ 13F portfolio shrank by $8 billion after the Chief Investment Officer Daniel Sundheim left the fund. Despite that significant decline, Julian Robertson’s protégé is currently managing around $27 billion in its 13F portfolio, according to the latest filings.

Before founding Viking Global, Andreas Halvorsen worked as a senior managing director and the director of equities at Tiger Management. Andreas Halvorsen graduated from the Norwegian Naval Academy and he got an MBA degree from the Stanford Graduate School of Business. He was considered to be among the highest earning hedge fund managers in 2018.

Halvorsen’s strategy of generating value by investing in tech, healthcare, and the financial sector helped in generating massive returns for investors over the years. Here is how Andreas Halvorsen defines his investment strategy:

“We are stock pickers. We believe that our thoughtful analysis and disciplined valuation over time yield a diversified portfolio of longs and shorts whose stock price developments will deviate from each other and provide a profitable spread.”

Viking Global Investors focuses on fundamental aspects and market trends when making buying or selling decisions. In addition, the Tiger cub’s hedge fund likes to sell stakes when they believe the position has generated enough gains and the stock is fairly priced. They don’t fall in love with any stock. This is evident from the average time held for top ten stocks of 2.10 quarters.  

For instance, the hedge fund has sold its JD.com stake in the September quarter after initiating a position in the first quarter of 2019. Prior to the stake sale, JD was accounting for 2.15% of the overall portfolio. Shares of JD rallied almost 150% in the last twelve months alone. He also sold a stake in Salesforce during the September quarter and slashed its Amazon stake by 55%. Halvorsen also sold out of its entire $150 million position in Alibaba (BABA) shares during the third quarter. That trade was especially profitable as Alibaba lost around 20% of its value since this summer as Jack Ma became the object of intense scrutiny by Chinese regulators after his comments in October.

Andreas Halvorsen always seeks to make changes in the portfolio to align the investments according to the market environment.

The value of Viking Global Investors 13F portfolio came in at $27.68 billion at the end of the September quarter, up 20% from the previous quarter’s value of $23.14 billion. The hedge fund has increased its number of positions from 71 to 86. The top 5 positions account for 25% of the overall portfolio while the top ten positions represent 40% of the portfolio.

While Andreas Halvorsen’s reputation remains intact, the same can’t be said of the hedge fund industry as a whole, as its reputation has been tarnished in the last decade during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 88 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Let’s start reviewing billionaire Andreas Halvorsen’s top 10 stock picks to see how his hedge fund has generated impressive 25% return in 2020.

10. Hilton Worldwide Holdings Inc. (NYSE:HLT)

In the case of Hilton Worldwide Holdings Inc. (NYSE: HLT), the tiger cub has used the dip in the stock price as a buying opportunity. Hilton’s stock price fell sharply during the second quarter of 2020 amid lockdowns. Viking Global Partners initiated a big position in Hilton Worldwide during the second quarter and added to its stake in the September quarter.

The strategy of buying on dip worked for Viking Global. This is because shares of Hilton rallied almost 50% in the last six months.

Other hedge funds are also bullish on Hilton Worldwide. It was in 57 hedge funds’ portfolios at the end of September. Billionaire Dan Sundheim also has a very large position in HLT which tells us that Halvorsen and Sundheim still feed off each other’s ideas. 

Heartland Mid Cap Value Fund has presented a bullish case about Hilton and predicted that the dip in stock price was the best buying opportunity. Here is what Heartland Mid Cap Value Fund stated:

“A room with a view. As stocks sold off earlier this year in response to the global pandemic, the Team acted opportunistically by adding industry-leading businesses that were trading at significant discounts relative to their intrinsic value. Hilton Worldwide Holdings Inc. (HLT) is an example of this approach.”

9. Amazon.com (NASDAQ:AMZN)

The largest online retailer Amazon.com (NASDAQ: AMZN) is one of the favorite stock holdings of Andreas Halvorsen’s Viking Global Investors. Although the hedge fund has sold 55% of stake in the September quarter to capitalize on a stunning share price rally, Amazon still accounts for 3.08% of the overall portfolio. Shares of Amazon grew 76% in the last twelve months, extending the five-year gains to 380%.   

Baron Opportunity Fund, which returned 17.92% in the September quarter, expressed strong confidence in the world’s largest e-commerce giant. Here is what Baron Opportunity Fund stated:

“Amazon.com, Inc. is the world’s largest retailer and cloud services provider. Shares were up on strong second quarter revenue metrics – with paid unit growth accelerating to 57%, a startling figure for a company of this scale – as Amazon benefited from recent investments in logistics and distribution to meet increased COVID-19-related demand. Amazon has the unique ability to deliver all the necessities of life safely to your doorstep, including groceries. Amazon also reported a stunning beat in operating profit, with $5.8 billion of operating income, almost six times Wall Street’s expected figure. While e-commerce penetration is rising rapidly and Amazon continues to grow its addressable market by entering new verticals, we continue to view Amazon Web Services as the more material driver of the company given its leadership in the vast and growing cloud infrastructure market and potential to compete in application software in the years to come.”

8. JPMorgan Chase & Co. (NYSE:JPM)

The billionaire Andreas Halvorsen has created a big position in JPMorgan Chase & Co. (NYSE: JPM) in fiscal 2020. He used the dip in share price as a buying opportunity.  JPM stock price remained under pressure throughout 2020 amid pandemic and low-interest rates. Viking Global initiated a position in JPM during the first quarter of 2020 and added to its existing position in the third quarter. JPM currently accounts for 3.27% of the overall portfolio.

Jamie Dimon is a very smart insider to follow. We verified this back in 2012 when JPM shares declined from $45 to $33 because of the London Whale scandal (do you remember that?). Dimon bought 500,000 shares at around $34 per share. Insider Monkey maintains a 10-year database of insider filings and you can see Jamie Dimon’s entire insider transactions history on this page. The last time Dimon bought any shares of JPM prior to the 2012 purchases was in 2007. This indicated us that Dimon really thought JPM shares were significantly undervalued by the market. Given the fact that JPM shares currently trade above $130, Dimon made close to $50 million from those purchases. We believe Dimon is in a similar mood now. Last month JP Morgan announced a $30 billion share repurchase program for 2021. JPM shares are already up 10+% since that announcement. We think JPM will continue to outperform the market and see above $150 in 2021. 

In a Q2 investor’s letter, VLTAVA Fund has also claimed that the dip in JPM’s share price offered an attractive buying opportunity. Here is what VLTAVA Fund stated:

“In the quarter just ended, we bought shares of JP Morgan. In our opinion, among all the world’s large banks, this one is the best managed and financially strongest. It did very well already in the recession of 2008, when it remained profitable and did not require government help.”

7. T-Mobile US (NYSE:TMUS)

The Tiger cub also looks optimistic over the fundamentals of T-Mobile US (NASDAQ: TMUS), which is the seventh-largest holding of Viking Global according to the latest filings. The hedge fund has significantly raised its stake by 112% in the September quarter after initiating a position in the first quarter. Shares of T-Mobile US rallied almost 70% in the last twelve months.

Oakmark Funds, which returned 23.0% in the second quarter, commented on few stocks including T-Mobile in an investor’s letter. Here is what Oakmark said:

“We initiated a position in T-Mobile after the company announced that regulators would approve its merger with Sprint. AT&T and Verizon have long dominated the market for wireless services due to their incumbent network quality advantage. The recently closed merger of T-Mobile and Sprint creates the first opportunity for a challenger to build the fastest, most reliable, and highest capacity wireless network in the United States.”

6. BridgeBio Pharma, Inc. (NASDAQ:BBIO)

The Biotechnology company BridgeBio Pharma, Inc. (NASDAQ: BBIO) is the sixth-largest stock holding of Viking Global portfolio, accounting for 3.59%. The hedge fund has been holding a stake in BridgeBio Pharma since the second quarter of 2019.

Shares of BridgeBio Pharma rallied close to 100% in the last twelve months. The share price rally is supported by the news that the FDA accepts to review BridgeBio Pharma and affiliate QED Therapeutics’ New Drug Application (NDA) for infigratinib for the first-line treatment of advanced/metastatic cholangiocarcinoma (bile duct cancer) with FGFR2 gene fusions or translocations.  

Disclosure: No position. The article billionaire Andreas Halvorsen’s top 10 stock picks is originally published on Insider Monkey.