Stanley Druckenmiller (Trades, Portfolio), the CEO of Duquesne Family Office, disclosed last week that his top six buys for the fourth quarter of 2019 were in iShares Russell 2000 (IWM, Financial), iShares MSCI Emerging Index Fund (EEM, Financial), JPMorgan Chase & Co. (JPM, Financial), Alphabet Inc. (GOOGL, Financial), Freeport-McMoRan Inc. (FCX, Financial) and FedEx Corp. (FDX, Financial).
A former partner of George Soros (Trades, Portfolio), Druckenmiller takes a macroeconomic approach to investing. The CEO of Duquesne converted the hedge fund into a family office in 2010.
As of quarter-end, the $3.41 billion equity portfolio contains 62 stocks, with 27 new holdings and a turnover ratio of 51%. The top three sectors in terms of weight are communication services, technology and financial services, with weights of 21.43%, 21.36% and 11.25%.
IShares Russell 2000
Druckenmiller purchased 1,550,100 shares of iShares Russell 2000, giving the position 7.53% weight in the equity portfolio. Shares averaged $157.72 during the quarter.
The Russell 2000 small cap index measures the performance of approximately 2,000 U.S. stocks based on a combination of the stocks’ market cap and index membership. The Russell 2000 represents approximately 10% of the total market cap of the Russell 3000 index, which measures the performance of approximately the top 3,000 U.S. stocks based on market cap.
IShares MSCI Emerging Index Fund
Druckenmiller purchased 4,065,100 shares of iShares MSCI Emerging Index Fund, giving the position 5.35% weight in the equity portfolio. Shares averaged $42.23 during the quarter.
According to the iShares website, the MSCI Emerging Index Exchange-Traded Fund seeks to track the investment results of an index composed of large-cap and mid-cap equities from emerging markets.
GuruFocus tracks the market valuation of several emerging markets: For these markets, we apply Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio)’s favorite market indicator using market cap and gross domestic product data for the respective market.
JPMorgan Chase
Druckenmiller purchased 1,286,900 shares of JPMorgan Chase, giving the stake 5.26% weight in the equity portfolio. Shares averaged $128.65 during the quarter.
According to GuruFocus, the New York-based bank’s cash-to-debt, equity-to-asset and debt-to-equity ratios are underperforming 58.77%, 51.13% and 73.81% of global competitors, suggesting low financial strength. Despite this, the bank’s net margin and return on assets are outperforming over 70% of global banks.
Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also purchased shares of JPMorgan Chase, a major holding of Berkshire. Buffett’s conglomerate owns 59,514,932 shares of JPM as of quarter-end.
Alphabet
Druckenmiller purchased 92,189 Class A shares of Alphabet, giving the position 3.62% weight in the equity portfolio. Shares averaged $1,292.54 during the quarter.
The Mountain View, California-based company operates a wide range of online media platforms, including Google Search and YouTube. GuruFocus ranks Alphabet’s profitability 10 out of 10 on several positive investing signs, which include a four-star business predictability rank and an operating margin that outperforms 80.56% of global competitors despite contracting over the past five years.
Freeport-McMoRan
Druckenmiller purchased 4,572,051 shares of Freeport-McMoRan, giving the stake 1.76% weight in the equity portfolio. Shares averaged $11.05 during the quarter.
The Phoenix-based company operates copper mines around the globe, including the Americans and the Indonesian Grasberg mining complex. GuruFocus ranks the company’s profitability 6 out of 10: Although the Joel Greenblatt (Trades, Portfolio) return on capital and three-year earnings growth rate outperform over 80% of global competitors, Freeport’s operating margin outperforms just 59.39% of global metals and mining companies.
FedEx
Druckenmiller purchased 336,950 shares of FedEx, giving the holding 1.49% weight in the equity portfolio. Shares averaged $154.38 during the quarter.
The Memphis, Tennessee-based company offers a wide range of delivery options, including FedEx Express and FedEx Ground. According to GuruFocus, FedEx’s good investing signs include expanding operating margins and a three-year revenue growth rate that outperforms 78.55% of global competitors. Despite this, net profit margins are underperforming over 75% of global freight and logistics companies.
Disclosure: No positions.
Read more here:
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- Paul Singer’s Elliott Management Starts 5 Positions in the 4th Quarter
- Top 6 4th-Quarter Boosts of Ron Baron’s Firm
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