Lee Ainslie (Trades, Portfolio), the founder and CEO of Maverick Capital, recently disclosed the firm's portfolio changes for the third quarter of 2020, which ended on Sept. 30.
One of the "Tiger Cubs" mentored by legendary investor Julian Robertson (Trades, Portfolio) of Tiger Management, Ainslie founded Maverick Capital in 1993. The Dallas-based firm employs six industry heads for researching investment opportunities, each one an expert in their respective industry: consumer, health care, cyclical, retail, financial and telecommunications/media/technology. After consulting these experts, Ainslie makes the final call on any changes to the portfolio.
Maverick Capital's top buys for the quarter were Lam Research Corp. (LRCX, Financial), Corning Inc. (GLW, Financial), TG Therapeutics Inc. (TGTX, Financial) and Logitech International SA (LOGI, Financial).
Lam Research
The firm added 503,769 shares, or 217.25%, to its investment in Lam Research for a total holding of 735,657 shares. The trade had a 3.11% impact on the equity portfolio. During the quarter, shares traded for an average price of $344.01.
Lam Research is a semiconductor company based in Fremont, California. It primarily engages in designing, manufacturing, marketing and servicing semiconductor processing equipment that is used in the fabrication of advanced integrated circuits.
On Dec. 8, shares of Lam Research traded around $510.03 for a market cap of $73.26 billion. The GuruFocus Value chart rates the stock as significantly overvalued.
The company has a financial strength rating of 6 out of 10 and a profitability rating of 9 out of 10. The cash-debt ratio of 1.14 is about average for the industry, while the Altman Z-Score of 7.28 indicates the company is not in danger of bankruptcy. The return on invested capital has been consistently higher than the weighted average cost of capital in recent years, indicating the company is creating value.
Corning
The firm also upped its stake in Corning by 4,012,700 shares, or 3,389.42%, for a total holding of 4,131,089 shares. The trade had a 2.42% impact on the equity portfolio. Shares traded for an average price of $30.85 during the quarter.
Corning is a materials science technology company based in Corning, New York. It designs and manufactures specialty glass, ceramics and related materials and technologies such as advanced optics for use in industrial and scientific applications.
On Dec. 8, shares of Corning traded around $37.72 for a market cap of $28.78 billion. The GuruFocus Value chart rates the stock as modestly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 7 out of 10. The interest coverage ratio is 0.69, but the current ratio is 2.09, indicating that while the company can pay its debts, it is still in hot water and may need to make some sacrifices in order to keep the bills paid. The company has a three-year revenue growth rate of 15.9%, but a three-year Ebitda growth rate of -9.5%.
TG Therapeutics
The firm invested in 4,262,157 more shares of TG Therapeutics, increasing the position by 3,277.6% to a total of 4,392,196 shares. The trade had a 2.12% impact on the equity portfolio. During the quarter, shares traded for an average price of $22.98.
TG Therapeutics is an American company focused on the acquisition, development and commercialization of novel biopharmaceutical treatments for B-cell malignancies and autoimmune diseases.
On Dec. 8, shares of TG Therapeutics traded around $28.93 for a market cap of $3.76 billion. The stock price languished for years as the company failed to produce any encouraging signs for investors before surging in recent months on the news of favorable data from two pivotal trials.
The company has a financial strength rating of 5 out of 10 and a profitability rating of 1 out of 10. This stock falls firmly into the speculative category, as it is not yet profitable and its fate depends entirely on the company succeeding in acquiring, developing and selling its target products in the future. However, with a cash-debt ratio of 6.19 and a Piotroski F-Score of 4 out of 9, the company has stable financial footing.
Logitech International
The firm purchased an additional 1,192,508 shares of Logitech International, increasing the stake by 1,211.47% for a total of 1,290,943 shares. The trade had a 1.72% impact on the equity portfolio. Shares traded for an average price of $71.36 during the quarter.
Logitech is a Swiss-American technology company that manufactures and sells a variety of computer peripherals and software worldwide, including mice, keyboards, headsets, security devices, smart home implements and more.
On Dec. 8, shares of Logitech traded around $89.47 for a market cap of $14.98 billion. The GuruFocus Value chart rates the stock as significantly overvalued.
The company has a financial strength rating of 7 out of 10 and a profitability rating of 8 out of 10. The Piotroski F-Score of 8 out of 9 and Altman Z-Score of 9.37 indicate the company has a fortress-like balance sheet. The ROIC has greatly surpassed the WACC in most years of the company's history, indicating solid value creation.
Portfolio overview
During the third quarter, Ainslie's firm established 188 new positions, sold out of 188 stocks and added to or reduced several other positions for a turnover of 30%. As of the quarter's end, the firm held 561 common stock positions valued at a total of $5.38 billion.
The top holdings were Facebook Inc. (FB, Financial) with a 6.63% portfolio weight, DuPont de Nemours Inc. (DD, Financial) with 6.27% and Humana Inc. (HUM, Financial) with 5.12%. In terms of sector weighting, the firm was most invested in technology, health care and consumer cyclical.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.
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