Stanley Druckenmiller (Trades, Portfolio), president of the Duquesne Family Office, disclosed last week that his top trades during the second quarter included trimmings in several Big Tech companies and new holdings in cyclical companies like big bank JPMorgan Chase & Co. (JPM, Financial), coffee restaurant chain Starbucks Inc. (SBUX, Financial) and travel-reservation giant Booking Holdings Inc. (BKNG, Financial).
Druckenmiller managed money for George Soros (Trades, Portfolio) from 1988 to 2000, famously shorting the British Pound in 1992. The Duquesne CEO converted the hedge fund into a family office in 2010.
As of the quarter's end, Druckenmiller's $3.27-billion equity portfolio contains 72 stocks, with 41 new positions and a turnover ratio of 45%, suggesting a high number of transactions. The top three sectors in terms of weight are consumer cyclical, communication services and technology, with weights of 26.07%, 20.81% and 20.08%, respectively.
Guru slashes stakes in Big Tech as market becomes overvalued
Druckenmiller chopped his holdings in several of the "FAANG" stocks during the second quarter. The guru dumped 63.45% of his holding in Netflix Inc. (NFLX, Financial), 52.83% of his stake in Amazon.com Inc. (AMZN, Financial), 81.35% of his position in Facebook Inc. (FB, Financial) and 38.09% of his holding in Alphabet Inc.'s (GOOGL, Financial) Class A shares. Table 1 summarizes the transactions, which reduced the equity portfolio 25.07% in aggregate.
| Company (Ticker) | Shares Sold | % of Holding Sold | Equity Portfolio Reduction | Second-quarter Average Share Price |
| Netflix (NFLX, Financial) | 537,174 | 63.45% | 8.18% | $424.08 |
| Amazon (AMZN, Financial) | 95,464 | 52.83% | 7.54% | $2,403.24 |
| Facebook (FB, Financial) | 1,011,754 | 81.35% | 6.84% | $208.03 |
| Alphabet (GOOGL, Financial) | 53,210 | 38.09% | 2.51% | $1,344.49 |
Table 1
Druckenmiller said in a June 8 CNBC interview that he is "humbled" by the strong market rally, with his firm gaining just 3% during the 40% market rally from the March 23 low. Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio)'s favorite market indicator reached 178.5% on Tuesday, a new all-time high.
The S&P 500 index closed at 3,389.78, smashing the previous-record close of 3,386.15 set on Feb. 19. The index also set a new intraday high of 3,395.06, topping the previous record intraday high of 3,393.52, which was also set on Feb. 19. CNBC cited several reasons for the strong market rally, including several monetary and fiscal stimulus movements, which include the Federal Reserve setting overnight interest rates close to zero and the U.S. government pouring trillions of dollars in coronavirus stimulus packages.
JPMorgan Chase
With the proceeds from the Big Tech sells, Druckenmiller purchased 1,611,940 shares of JPMorgan Chase, giving the position 4.64% weight in the equity portfolio. Shares averaged $94.84 during the second quarter.
GuruFocus ranks the New York-based bank's financial strength 3 out of 10 on the back of equity-to-asset and debt-to-equity ratios underperforming over 68% of global bank competitors, suggesting high financial leverage compared with other sectors.
Berkshire sold 35,506,006 shares of JPMorgan Chase during the quarter, slashing 61.52% of the holding and 1.82% of its equity portfolio.
Starbucks
Druckenmiller purchased 905,915 shares of Starbucks, giving the position 2.04% weight in the equity portfolio. Shares averaged $75.03 during the second quarter.
GuruFocus ranks the Seattle-based coffee restaurant chain's profitability 9 out of 10 driven on a 3.5-star business predictability rank and profit margins outperforming over 78% of global competitors.
Booking
Druckenmiller purchased 37,360 shares of Booking, giving the position 1.82% weight in the equity portfolio. Shares averaged $1,519.55 during the second quarter.
GuruFocus ranks the Norwalk, Connecticut-based travel-reservation giant's profitability 9 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and profit margins and returns that are outperforming over 95% of global competitors.
See also
Druckenmiller's top buys also include a new holding in T-Mobile US Inc. (TMUS) and a position boost in Microsoft Corp. (MSFT, Financial). The two transactions increased the equity portfolio by 9.34% in aggregate.
Disclosure: The author has no positions in the stocks mentioned. The current value of the Buffett Indicator reflects a 32.9% annual-rate decline in U.S. gross domestic product during the second quarter.
Read more here:
- David Tepper's Top 5 Buys in the 2nd Quarter
- Warren Buffett's Market Indicator Breaks 155%
- Google Parent Alphabet Sinks on Otherwise Strong Day for Big Tech
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