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Robert Karr Boosts 3 Positions in 3rd Quarter

Former tiger cub's firm reports quarterly portfolio

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Nov 23, 2021
Summary
  • Firm’s top trade is a major boost in Alibaba.
  • Joho Capital also boosts stakes in Global Payments and Livent.
  • Firm exits holdings in Ceridian HCM Holding and Simon Property Group.
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Robert Karr (Trades, Portfolio), founder of Joho Capital, disclosed last week that his firm’s top trades during the third quarter included boosts in Alibaba Group Holding Ltd. (BABA, Financial), Global Payments Inc. (GPN, Financial) and Livent Corp. (LTHM, Financial). The firm also exited its positions in Ceridian HCM Holding Inc. (CDAY, Financial) and Simon Property Group Inc. (SPG, Financial).

Prior to founding the New York-based firm, Karr primarily focused on Asian equities at

Julian Robertson (Trades, Portfolio)’s Tiger Management. Joho usually holds a concentrated portfolio in technology stocks with a low portfolio turnover rate.

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As of Sept. 30, Joho’s $744 million equity portfolio contains 20 stocks with a quarterly turnover ratio of 13%. The technology sector occupies 47.64% of the equity portfolio, followed by a 19.80% weight in consumer cyclical and a 16.67% weight in industrials.

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Alibaba

Joho purchased 385,900 shares of Alibaba (

BABA, Financial), expanding the position by 67.6% and its equity portfolio by 7.68%.

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Although shares of Alibaba averaged $182.30 during the third quarter, the stock hit a new 52-week low of $133.31 on Tuesday. The stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.35.

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GuruFocus ranks the Chinese e-commerce giant’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank and profit margins and returns that outperform more than 78% of global competitors.

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Gurus that also purchased shares of Alibaba during the third quarter include

Charlie Munger (Trades, Portfolio)’s Daily Journal Corp. (DJCO, Financial), Ken Fisher (Trades, Portfolio)’s Fisher Investments and First Eagle Investment (Trades, Portfolio).

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Global Payments

The firm added 189,693 shares of Global Payments (

GPN, Financial), boosting the position by 31.78% and its equity portfolio by 4.02%.

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Shares of Global Payments averaged $173.79 during the third quarter; the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.64.

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GuruFocus ranks the Atlanta-based payment processing company’s profitability 8 out of 10 on several positive investing signs, which include a three-star business predictability rank, a high Piotroski F-score of 8 and profit margins that are outperforming more than 81% of global competitors.

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Other gurus with holdings in Global Payments include

Larry Robbins (Trades, Portfolio)’ Glenview Capital Management and Philippe Laffont (Trades, Portfolio)’s Coatue Asset Management.

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Livent

The firm invested in 496,000 shares of Livent (

LTHM, Financial), increasing the position by 13.13% and its equity portfolio by 1.54%.

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Shares of Livent averaged $22.44 during the third quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 3.03.

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GuruFocus ranks the Philadelphia-based lithium company’s financial strength 6 out of 10 on the back of a strong Altman Z-score of 8.94 despite debt ratios underperforming more than 87% of global competitors.

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Ceridian

Joho sold all 185,037 shares of Ceridian (

CDAY, Financial), trimming 2.52% of its equity portfolio.

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Shares of Ceridian averaged $105.06 during the third quarter; the stock is modestly overvalued based on Tuesday’s price-to-GF Value ratio of 1.12.

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GuruFocus ranks the Minneapolis-based human capital management company’s financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a weak Altman Z-score of 1.58 and debt ratios that underperform more than 73% of global competitors.

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Simon Property Group

The firm sold all 8,100 shares of Simon Property Group (

SPG, Financial), paring 0.15% of its equity portfolio.

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Shares of Simon Property Group averaged $130.23 during the third quarter; the stock is significantly overvalued based on Tuesday’s price-to-GF Value ratio of 1.43.

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GuruFocus ranks the Indianapolis-based REIT’s financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.28 and interest coverage and debt ratios that are underperforming more than 56% of global competitors despite having a high Piotroski F-score of 7.

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I am/we are Long BABA
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