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Lee Ainslie's Top Holdings

January 24, 2012 | About:
Mara Kohn

Mara Kohn

4 followers
Lee Ainslie founded the hedge fund Maverick Capital in 1993. This Dallas-based firm has six industry sector heads who have expertise in several industries: consumer, health care, cyclical, retail, financial, and telecommunications, media, and technology. They provide advice on the purchase of stock.

Ainslie serves as CEO of the company. Formerly, he was part of Tiger Management. He earned his bachelor's degree in system engineering from the University of Virginia, and an MBA from the University of North Carolina.

Apart from working for the hedge fund, Ainslie serves as the vice-chairman of the Robin Hood Foundation, and on the board of trustees for several organizations such as the Green Vale School.

Here are his top holdings:

Qualcomm (QCOM): QCOM develops and licenses wireless technology and manufactures semiconductors for mobile phones. The firm is also the world's largest wireless chipmaker, supplying many leading handset makers with cutting-edge processors.

Qualcomm has become an innovator in code division multiple access technology. It is a communications standard used in wireless networks. QCOM faces severe competition; nevertheless, it can remain profitable.

CDMA is one of the two main wireless standards used by the telecommunications industry. Qualcomm holds patents related to such standard, and the intellectual property portfolio is the source of the firm's wide economic moat.

Financially speaking, the company is healthy. In 2011, it had $20.9 billion in cash and investments, with only $1 billion of outstanding bank loans. Most importantly, Qualcomm pays a dividend that yields between 1% and 2% and the company makes stock buybacks too.

Apollo Group (APOL): Apollo Group is one of the world's largest for-profit education companies. 350,000 degree students enrolled in its core school, the University of Phoenix.

APOL does not only offer physical learning at its centres located in nearly 40 states and in international locations, but it also offers online training.

Programs range from associate to doctorate degrees in areas such as business, education, health care, technology, and social and behavioral sciences.

APOL has had solid revenue and operating profit in the first quarter above analysts’ expectations. However, the firm made little changes in the full-year outlook.

To be more specific, revenue in the first quarter fell 11% and total enrollment dropped 15%.

Although the general environment does not look extremely good, Apollo is performing well.

Corning (GLW): Corning is the leading designer and manufacturer of glass and ceramic substrates found in liquid crystal displays, fiber-optic cables, automobiles, and laboratory products. The company comprises the following divisions: display technologies, telecommunications, environmental technologies, specialty materials, and life sciences. 40% of revenue is generated from displays.

It primarily produces glass panels for LCD. The growth in demand of products using LCD has boosted growth in revenue. Although there is competition in the market, Corning is still the leading provider.

Its products and efficiency have enabled GLW and its 50% owned subsidiary, Samsung Corning Precision to control an important share of the panel market.

Corning shares are undervalued. They trade at less than 7 P/E on a TTM basis.

McKesson (MCK): McKesson is a leading distributor of pharmaceuticals, specialty drugs, medical and surgical supplies, and health- and beauty-care products in North America.

As regards the segments, the distribution sector increased 10%. The current market cap is $18.84 billion and stocks trade at a P/E Multiple of 10.1x. It is also trading at a discount to its industry average of 11.0x.

Wells Fargo & Company (WFC): Wells Fargo & Company is a diversified financial services company providing banking, insurance, investments, mortgage, leasing, credit cards and consumer finance. The company operates through stores, via Internet and other channels in North America and across the globe.

One of the best moves WFC has made is the purchase of Wachovia, which converted WFC into a nationwide bank.

Furthermore, it has one of the most admired management teams in banking.

Recently, it has been announced that the company will increase the dividend payout ratio and the share repurchases initiatives.

Rating: 3.8/5 (9 votes)

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