1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (1321)  | Author's Website |

Andreas Halvorsen's 5 Biggest Trades of the 2nd Quarter

Viking Global leader slashes stakes in Netflix and Amazon

Andreas Halvorsen (Trades, Portfolio), founding partner and chief investment officer of Viking Global Investors, disclosed last week that his top five trades for the second quarter in terms of portfolio impact featured position trimmings of Netflix Inc. (NASDAQ:NFLX) and Amazon.com Inc. (NASDAQ:AMZN), a position boost of American Express Co. (NYSE:AXP) and new holdings in Thermo Fisher Scientific Inc. (NYSE:TMO) and Hilton Worldwide Holdings Inc. (NYSE:HLT).

Prior to founding the Greenwich, Connecticut-based firm, Halvorsen worked as senior managing director at Julian Robertson (Trades, Portfolio)'s Tiger Management. Viking manages approximately $42 billion in total assets; according to the firm's website, Viking employs a research-intensive investing approach, selecting equity investments across geographies and industries based on fundamental analysis.

62b44541dde5f1f6062f5b507daa8ce8.png

As of quarter-end, the firm's $23.14 billion equity portfolio contains 71 stocks, with 23 new positions and a turnover ratio of 34%. The top three sectors in terms of weight are health care, technology and consumer cyclical, representing 32.64%, 19.28% and 18.94% of the portfolio.

098b73d9d4f26d77d200943e5cae7be9.png

Netflix

Halvorsen sold 2,302,698 shares of Netflix, slashing 86.59% off the holding and 4.50% off the equity portfolio. Shares of the Los Gatos, California-based streaming giant averaged $424.08 during the second quarter.

3bd572a8578e7aa4fea76bff315b467b.png

GuruFocus ranks Netflix's profitability 8 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that has increased approximately 18% per year on average over the past five years and is outperforming over 86% of global competitors.

c7ca3a7d7248492f78e9cfd204a74cca.png

Despite high profitability, Netflix`s valuation ranks just 2 out of 10 on several signs of overvaluation, including a share price near a 10-year high and a price-sales ratio that underperforms 94.11% of global competitors.

7bb509b1882d8f12b333c1e5f3a49d51.png

According to the GuruFocus Baskets feature, five GuruFocus users dismissed Netflix as a potential investment, second only to Tesla Inc.`s (NASDAQ:TSLA) 20 "not interested" votes.

894e8b36e90166031a528b7c638d14c2.png

Gurus with large holdings in Netflix include Ken Fisher (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio), with the former increasing his stake by approximately 5% to 3,406,209 shares during the second quarter.

a27b713629779b1039eeebd5d5fcde0c.png

Amazon

Halvorsen sold 267,207 shares of Amazon, reducing the position 30.36% and the equity portfolio 2.71%. Shares of the Seattle-based online retail giant averaged $2,403.24 during the second quarter.

0a7e4f02efb441b9776ef3d3d94972ee.png

GuruFocus ranks Amazon`s profitability 8 out of 10 on several positive investing signs, which include expanding operating margins, a 4.5-star business predictability rank and a return on assets that outperforms over 80% of global competitors.

d1aafb66a9b892b201714faca97d2a4f.png

Amazon`s valuation ranks 1 out of 10 on the back of price valuations underperforming over 92% of global competitors, with price-sales ratios near the 10-year high of 5.04.

1eceb0da2dcad2dd7de91ace143383d2.png

American Express

Halvorsen purchased 6,619,218 shares of American Express, increasing the stake 170.67% and the equity portfolio 2.72%. Shares of the New York-based credit card company averaged $91.97 during the second quarter.

72825a7b146b27964343c5da99e0df02.png

GuruFocus ranks American Express' financial strength 3 out of 10 on the back of equity-to-asset and debt-to-equity ratios underperforming over 67% of global competitors.

202d39353d4adcbc29eb37739300f13c.png

Gurus with large holdings in American Express include Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) and Dodge & Cox.

b04de0f1e94a24d77c7fad50bd4ab36e.png

Thermo Fischer Scientific

Halvorsen purchased 1,734,144 shares of Thermo Fischer Scientific, giving the position 2.72% weight in the equity portfolio.

bd35a34e5d10382795fb2c8be0d13d5e.png

The Waltham, Massachusetts-based company sells medical diagnostics products through four business segments: analytical technologies, specialty diagnostic products, life science solutions and lab products and services. GuruFocus ranks Thermo Fischer Scientific`s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a five-star business predictability rank and an operating margin that has increased approximately 6.30% per year on average over the past five years and is outperforming 84.79% of global competitors.

66c560f0f8149ce160584ff408fe8e64.png

Hilton Worldwide

Halvorsen purchased 7,272,455 shares of Hilton Worldwide, giving the holding 2.31% weight in the equity portfolio. Shares of the McLean, Virginia-based hotel giant averaged $74.11 during the second quarter.

7fd8ae510e43d8c871a7ceb3981478bd.png

GuruFocus ranks Hilton`s profitability 7 out of 10 on the back of expanding operating margins and revenues growing approximately 17.7% per year on average over the past three years, a rate that outperforms 84.47% of global competitors.

26ea66b1fe1ac462ec500af6290b0d74.png

Despite high profitability, Hilton's financial strength ranks 3 out of 10 on several warning signs, which include an interest coverage ratio below 5 that underperforms 59.45% of global competitors. Additionally, Hilton's debt-to-Ebitda ratio of 5.81 exceeds Joel Tillinghast`s safe threshold of 4, suggesting high financial leverage.

e6affeedca7f05fda1d55473d7db23d2.png

Other gurus with holdings in Hilton include Bill Ackman (Trades, Portfolio)'s Pershing Square and Steve Mandel (Trades, Portfolio)'s Lone Pine.

05db1f0aec72f38964d0d962647ad229.png

Disclosure: No positions.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


Rating: 0.0/5 (0 votes)

Comments

Please leave your comment:



Performances of the stocks mentioned by James Li


User Generated Screeners


pjmason14Momentum
pascal.van.garsseHigh FCF-M2
kosalmmuse6
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
kosalmmuseNice
kosalmmusehan
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)