Viking Global leader Andreas Halvorsen (Trades, Portfolio) disclosed last week he trimmed the firm’s Adaptive Biotechnologies Corp. (ADPT, Financial) stake by 12.79%.
A protégé of Tiger Management’s Julian Robertson (Trades, Portfolio), Halvorsen’s Connecticut-based firm picks stocks based on its understanding of the business’ fundamentals and management team as well as cyclical and secular industry trends.
According to GuruFocus Real-Time Picks, a Premium feature, the guru sold 4.9 million shares of the Seattle-based biotech company on Jan. 28, bringing the total holding to 33.5 million shares, which represent 4.39% of the equity portfolio. The stock traded for an average price of $24.98 per share.
GuruFocus estimates he has lost 34% on the investment since establishing it in the second quarter of 2019.
The company, which develops medicine with the goal of improving people’s lives by learning from the wisdom of their adaptive immune systems, has a $3.75 billion market cap; its shares were trading around $29.91 on Monday with a price-book ratio of 6.35 and a price-sales ratio of 13.85.
According to GuruFocus, the stock has fallen over 20% since its initial public offering last June.
On Jan. 21, the company revealed preliminary unaudited revenue for full fiscal 2019. It said it expects revenue to range from $84 million to $85 million, reflecting 52% growth from the midpoint of the range for full-year 2018. Adaptive will report its fourth-quarter and full-year financial results later this month.
The company also announced a proposed underwritten offering of 8 million shares of its common stock by certain selling shareholders. The shares were priced at $26.50 and underwriters were granted a 30-day option to purchase up to an additional 1.2 million shares. The offering closed on Jan. 28.
Adaptive’s financial strength was rated 7 out of 10 by GuruFocus on the back of comfortable interest coverage and a high cash-debt ratio. In addition, the robust Altman Z-Score of 6.81 indicates it is good financial health.
While it was not assigned a profitability rating, the company also has some weaknesses as its days inventory is building up and its margins and returns are negative.
Halvorsen’s firm is still the company’s largest guru shareholder with a 26.74% stake. Robertson and Ron Baron (Trades, Portfolio) also have positions in the stock.
Portfolio composition
Nearly 30% of Halvorsen’s $19.2 billion equity portfolio, which was composed of 62 stocks as of the end of third-quarter 2019, is invested in the health care sector. He has smaller holdings in the consumer cyclical and technology spaces.
Biotechnology companies make up the majority of his holdings in the health care industry, followed by health care plans and diagnostics and research.
Other biotechnology companies the guru is invested in as of the three months ended Sept. 30, 2019 include Sage Therapeutics Inc. (SAGE, Financial), Genmab AS (GMAB, Financial), Blueprint Medicines Corp. (BPMC, Financial), Biomarin Pharmaceutical Inc. (BMRN, Financial), BridgeBio Pharma Inc. (BBIO, Financial), aTyr Pharma Inc. (LIFE, Financial), Editas Medicine Inc. (EDIT, Financial), AnaptysBio Inc. (ANAB, Financial), Moderna Inc. (MRNA, Financial) and Eidos Therapeutics Inc. (EIDX).
Disclosure: No positions.
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