Generation Investment Management, the firm co-founded by Al Gore (Trades, Portfolio) and David Blood, disclosed this month that its top four buys during the fourth quarter of 2020 included a new position in Alibaba Group Holding Ltd. BABA and boosts to its Equifax Inc. EFX, Baxter International Inc. BAX and Illumina Inc. ILMN holdings.
Gore, a former vice president of the United States, co-founded the London-based firm in 2004. Generation seeks long-term capital appreciation by investing in the stock of companies that strategically manage their economic, social and environmental performances.
Generation applies a bottom-up, fundamental analysis-driven approach to investing. As of December 2020, the firm's $22.41 billion equity portfolio contains 41 stocks, with two new positions and a turnover ratio of 9%. The firm's top three sectors in terms of weight are technology, health care and industrials, representing 40.51%, 30.18% and 8.04% of the equity portfolio.
Alibaba
Generation purchased 1,544,863 shares of Alibaba BABA, giving the stake 1.6% weight in its equity portfolio. Shares averaged $227.43 during the fourth quarter; the stock is modestly undervalued based on Friday's price-to-GF Value ratio of 0.73.
GuruFocus ranks the Chinese e-commerce giant's profitability 8 out of 10 on several positive investing signs, which include consistent revenue growth and profit margins and returns outperforming over 90% of global competitors.
Gurus with large positions in Alibaba include Ken Fisher (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).
Equifax
Generation purchased 3,609,565 shares of Equifax EFX, expanding the position 176.09% and the equity portfolio 3.11%. Shares averaged $168.28 during the fourth quarter.
GuruFocus ranks the Atlanta-based credit bureau's financial strength 4 out of 10: Although the company has a high Piotroski F-score of 8 and a strong Altman Z-score of 3.18, debt ratios are underperforming over 65% of global competitors.
Baxter
The firm added 5,566,649 shares of Baxter BAX, increasing the position 46.94% and the equity portfolio 1.99%. Shares averaged $79.20 during the fourth quarter.
GuruFocus ranks the Deerfield, Illinois-based medical device company's profitability 7 out of 10 on the back of profit margins and returns outperforming over 70% of global competitors.
Illumina
The firm purchased 784,337 shares of Illumina ILMN, boosting the position 66.51% and the equity portfolio 1.29%. Shares averaged $327.99 during the fourth quarter.
GuruFocus ranks the San Diego-based medical research company's profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and a net profit margin that outperforms over 85% of global competitors.
Disclosure: No positions.
Read more here:
- Top 5 4th-Quarter Trades of Chris Davis' Firm
- Top 4 Broadest-Owned Tech Stocks as of the 4th Quarter
- Top 4 Holdings of Nelson Peltz's Trian Fund Management
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