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James Li
James Li
Articles (1542) 

Stanley Druckenmiller's Top 6 4th-Quarter Trades

Duquesne Family Office leader exits Alibaba and Netflix positions

February 18, 2021 | About:

Stanley Druckenmiller (Trades, Portfolio), founder and chairman of the Duquesne Family Office, disclosed this week that his top six trades during the fourth quarter of 2020 included the closure of his holding in Alibaba Group Holding Ltd. (NYSE:BABA) and Netflix Inc. (NASDAQ:NFLX), a reduction in his stake in JD.com Inc. (NASDAQ:JD) and boosts to his positions in Palo Alto Networks Inc. (NYSE:PANW), The Walt Disney Inc. (NYSE:DIS) and Carvana Co. (NYSE:CVNA).

Druckenmiller managed money for George Soros (Trades, Portfolio) during the 1990s, famously placing a short bet on the British pound in 1992. The Pittsburgh-based guru, who takes a macroeconomic approach to investing, converted his hedge fund into a family office in 2010.

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As of the quarter-end, Druckenmiller's $3.71 billion equity portfolio contains 56 stocks, with 20 new positions and a turnover ratio of 28%. The top three sectors in terms of weight are technology, consumer cyclical and communication services, representing 32.70%, 25.48% and 18.86% of the equity portfolio.

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Alibaba

Druckenmiller sold 545,755 shares of Alibaba (NYSE:BABA), freeing up 4.66% of the equity portfolio. Shares averaged $277.43 during the fourth quarter.

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GuruFocus ranks the Chinese e-commerce giant's profitability 9 out of 10 on several positive investing signs, which include consistent revenue growth and profit margins that outperform over 93% of global competitors.

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Gurus with large holdings in Alibaba include Ken Fisher (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).

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Netflix

Druckenmiller sold 278,372 shares of Netflix (NASDAQ:NFLX), trimming -4.04% of the equity portfolio. Shares averaged $506.65 during the fourth quarter.

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GuruFocus ranks the Los Gatos, California-based streaming giant's profitability 9 out of 10 on several positive 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 85% of global competitors.

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JD.com

Druckenmiller sold 1,316,630 shares of JD.com (NASDAQ:JD), axing 86.51% of the position and 2.97% of the equity portfolio. Shares averaged $83.6 during the fourth quarter.

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GuruFocus ranks the Beijing-based retail company's financial strength 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7 and a strong Altman Z-score of 5.32, despite interest coverage ratios outperforming just over 55% of global competitors.

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Palo Alto Networks

Druckenmiller purchased 376,760 shares of Palo Alto Networks (NYSE:PANW), expanding the position 457.79%. The shares, which occupy 3.6% of the equity portfolio, averaged $280.79 during the fourth quarter.

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GuruFocus ranks the Santa Clara, California-based cybersecurity software company's financial strength 4 out of 10: Although the company has a high Altman Z-score of 3.26, debt ratios are underperforming more than 80% of global competitors, suggesting high use of financial leverage.

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Walt Disney

Druckenmiller purchased 541,035 shares of Walt Disney (NYSE:DIS), increasing the position 377.55% and the equity portfolio 2.64%. Shares averaged $143.86 during the fourth quarter.

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GuruFocus ranks the Burbank, California-based entertainment giant's financial strength 4 out of 10 on the back of debt ratios underperforming over 65% of global competitors.

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Carvana

Druckenmiller purchased 394,065 shares of Carvana, increasing the position 428.72% and the equity portfolio 2.55%. Shares averaged $228.41 during the fourth quarter.

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GuruFocus ranks the Tempe, Arizona-based automobile retailer's financial strength 4 out of 10 on the back of debt ratios underperforming over 85% of global competitors despite a strong Altman Z-score of 18.

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Disclosure: No positions.

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