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New Premium Guru Li Lu's 4 Holdings

Himalaya Capital fund manager boosts Facebook and Micron holdings

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James Li
Nov 16, 2020

Summary

  • Li Lu's firm boosted holdings in Facebook and Micron Technology.
  • Firm also has holdings in Bank of America and Google-parent Alphabet.
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Li Lu (Trades, Portfolio), founder of Himalaya Capital, disclosed four positions in his third-quarter 13-F filing: Facebook Inc. (FB, Financial), Micron Technology Inc. (MU, Financial), Bank of America Inc. (BAC, Financial) and Alphabet Inc. (GOOG, Financial).

Born and raised in China, Lu graduated with a JD at Columbia Law School and an MBA at Columbia Business School. Lu's firm seeks long-term capital appreciation through investments in companies with strong economic moat, embracing the value investment principles of Ben Graham and Berkshire Hathaway Inc. (

BRK.A, Financial)(BRK.B, Financial) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio).

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According to the firm's website, Himalaya Capital developed its investing philosophy based on a baseball analogy in which a batter should only hit balls that are "slow, straight and right in the middle" of the sweet spot.

Himalaya Capital primarily focuses on publicly-traded companies in Asia with an emphasis on China. Although most of its holdings date back since the firm's 1997 inception, Himalaya Capital resumed filing 13-F reports to the Securities and Exchange Commission in 2020.

As of the end of the third quarter, the firm's $1.31 billion equity portfolio contained four holdings with a turnover ratio of 20% for the recent quarter. The top three sectors in terms of weight are technology, communication services and financial services, with weights of 41.09%, 36.21% and 22.70%, respectively.

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Facebook

Himalaya owns 1.331 million shares of Facebook, up 722,100 shares, or 118.59%, from the second-quarter holding. The shares, which averaged $257.89 during the third quarter, occupy 26.58% of the equity portfolio.

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GuruFocus ranks the Menlo Park, California-based social media giant's financial strength and profitability 9 out of 10 on several positive investing signs, which include a strong Altman Z-score of 18 and an operating margin that outperforms over 92% of global competitors.

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Gurus with large holdings in Facebook include

Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund and Chase Coleman (Trades, Portfolio)'s Tiger Global Management.

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Micron Technology

Himalaya owns 11,476,523 shares of Micron Technology, up 1,567,100 shares, or 15.81%, from the previous-quarter holding. The shares, which averaged $48.39 during the third quarter, occupy 41.09% of the equity portfolio.

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GuruFocus ranks the Boise, Idaho-based semiconductor company's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased over 20% per year on average over the past five years and is outperforming over 70% of global competitors.

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Other gurus with holdings in Micron Technology include

PRIMECAP Management (Trades, Portfolio) and David Tepper (Trades, Portfolio)'s Appaloosa Management.

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Bank of America

Himalaya owns 12,358,987 shares of Bank of America, unchanged from the previous-quarter holding. The shares, which averaged $24.90 during the third quarter, occupy 22.70% of the equity portfolio.

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GuruFocus ranks the Charlotte-based bank's financial strength 3 out of 10 on the heels of a debt-to-equity ratio that underperforms 64.11% of global competitors and a cash-to-debt ratio that underperforms 56.41% of global banks, suggesting high financial leverage compared to all global stocks.

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Gurus with large holdings in Bank of America include Berkshire and Dodge & Cox.

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Alphabet

Himalaya owns 85,900 Class C shares of Alphabet, unchanged from the previous-quarter holding. The shares, which averaged $1,525.89 during the third quarter, occupy 9.63% of the equity portfolio.

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GuruFocus ranks the Mountain View, California-based online media giant's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and profit margins outperforming approximately 80% of global competitors.

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See also

We are pleased to announce that we have added

Li Lu (Trades, Portfolio) as one of our Premium gurus. You can search for a guru's profile page by entering the guru's name into the GuruFocus search bar as the following image illustrates.

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Disclosure: No positions.

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