We are pleased to announce that we added Scotland-based investment firm Baillie Gifford (Trades, Portfolio) to our Premium list of gurus. According to top 10 holdings statistics, the firm's top five holdings as of the December 2020 filing date are Tesla Inc. (TSLA, Financial), Amazon.com Inc. (AMZN, Financial), MercadoLibre Inc. (MELI, Financial), Illumina Inc. (ILMN, Financial) and Spotify Technology SA (SPOT, Financial).
Firm background
Colonel Augustus Baillie and Carlyle Gifford created Baillie & Gifford WS in 1907 as a partnership. The firm started out as a law firm; however, Baillie and Gifford converted the partnership to investment firm Baillie Gifford (Trades, Portfolio) & Co. one year later. Today, the firm focuses on long-term investments and the belief that fundamental analysis and proprietary research are core to a successful, long-term, bottom-up investment approach. The firm discusses on its website that actual investors "think in decades and not quarters."
As of December 2020, the firm's $179.24 billion equity portfolio contains 422 stocks, with 197 new holdings and a turnover ratio of 6%. The top four sectors in terms of weight are consumer cyclical, communication services, technology and health care, representing 37.35%, 15.95%, 15.82% and 15.43% of the equity portfolio.
Tesla
Baillie Gifford owns 27,304,170 shares of Tesla (TSLA, Financial), dedicating 10.75% of its equity portfolio to the stake. While shares averaged $512.96 during the fourth quarter, Tesla traded around $692.36 on Friday, showing that the stock is significantly overvalued based on a price-to-GF Value ratio of 5.50.
GuruFocus ranks the Palo Alto, California-based electric vehicle giant's financial strength 6 out of 10: Tesla has a high Piotroski F-score of 8 and a strong Altman Z-score of 14.73 despite interest coverage and debt ratios underperforming more than half of global competitors.
Other gurus with holdings in Tesla include Ron Baron (Trades, Portfolio)'s Baron Funds, Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund and Catherine Wood (Trades, Portfolio)'s ARK Investment Management.
Amazon
The firm owns 3,197,240 shares of Amazon (AMZN, Financial), giving the position 5.81% weight in the equity portfolio. Shares averaged $3,191.09 during the fourth quarter of 2020.
GuruFocus ranks the Seattle-based e-commerce giant's profitability 8 out of 10 on several positive investing signs, which include a five-star business predictability rank, a return on assets that outperforms over 85% of global competitors and three-year revenue and earnings growth rates that outperform more than 90% of global cyclical retail companies.
MercadoLibre
The firm owns 4,751,724 shares of MercadoLibre (MELI, Financial), allocating 4.44% of its equity portfolio to the position. Shares averaged $1,414.87 during the fourth quarter.
GuruFocus ranks the Argentine e-commerce company's profitability 7 out of 10: Three-year revenue and earnings growth rates are outperforming over 81% of global competitors despite profit margins and returns underperforming more than half of cyclical retail companies.
Illumina
The firm owns 19,834,762 shares of Illumina (ILMN, Financial), giving the position 4.09% weight in the equity portfolio. 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 returns that outperform over 73% of global competitors.
Spotify
The firm owns 20,795,970 shares of Spotify (SPOT, Financial), giving the position 3.65% equity portfolio space. Shares averaged $282.71 during the fourth quarter.
GuruFocus ranks the Swedish music streaming service company's financial strength 6 out of 10: Spotify has a strong Altman Z-score of 7.82 despite debt-to-equity ratios underperforming over 59% of global competitors.
Disclosure: The author has no positions in the stocks mentioned. The holdings mentioned in this article reflect the firm's holdings as of the December 2020 filing and do not include any trades or portfolio hedges that Baillie Gifford (Trades, Portfolio) made in the first few months of 2021.
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