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Top 5 1st Quarter Trades of Hound Partners, LLC

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May 15, 2022
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Hound Partners, LLC recently filed their 13F report for the first quarter of 2022, which ended on 2022-03-31.

The 13F report details which stocks were in a guru’s equity portfolio at the end of the quarter, though investors should note that these filings are limited in scope, containing only a snapshot of long positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They are not required to include international holdings, short positions or other types of investments. Still, even this limited filing can provide valuable information.

Hound Partners, LLC is a hedge fund sponsor based out of New York City. The company was established in 2004 by Jonathan A.G. Auerbach, who is still with the company acting as its Portfolio Manager. Jonathan A.G. Auerbach previously worked at Ziff Brothers Investments as a senior analyst before founding the company. Hound Partners has grown from its inception to now have 22 employees of which 14 are investment professionals. The company conducts its research internally and utilizes a fundamental methodology to make its investment decisions. Hound Partners invests in the value stocks of companies, utilizing a long short strategy to allocate its assets in the public equity markets on a global scale. The company invests most heavily in the industrials sector, which alone makes up almost a quarter of its total asset allocations, and also invests in the finance sector, which makes up another fifth of its total allocations, health care, consumer discretionary, information technology, and energy sectors, among other sectors to a lesser degree, in order of decreasing allocation. The company’s top holdings include Valeant Pharmaceuticals International Inc., Spirit Aerosystems Holdings Inc., Citigroup Inc., Caters Inc., Tesoro Petroleum Co., and FleetCor Technologies Inc. Its top 10 holdings alone make up over three quarters of its total holdings and the company has a turnover rate of 30%. Hound Partners holds over $4.5 billion in total assets under management spread across 10 accounts, all of which are discretionary accounts. Both of the firm’s total number of accounts held and total assets under management have been increasing in recent years with its total assets under management growing significantly from approximately half a billion to almost 9 times that amount today. Hound Partners currently caters exclusively to pooled investment vehicles and takes advisory fees in the form of a percentage of assets and various performance based fees.

As of the latest 13F report, the guru’s equity portfolio contained 31 stocks valued at a total of $1,547,000,000. The top holdings were VOO(22.20%), IWM(9.46%), and KEX(9.39%).

According to GuruFocus data, these were Hound Partners, LLC’s top five trades of the quarter.

Freshworks Inc


The guru established a new position worth 4,096,125 shares in NAS:FRSH, giving the stock a 4.74% weight in the equity portfolio. Shares traded for an average price of $20.37 during the quarter.

On 05/15/2022, Freshworks Inc traded for a price of $16.19 per share and a market cap of $4,600,733,000. The stock has returned 0.00% over the past year.

GuruFocus gives the company a financial strength rating of 8 out of 10 and a profitability rating of 1 out of 10.

In terms of valuation, Freshworks Inc has a price-book ratio of 4.50, a EV-to-Ebitda ratio of -14.48 and a price-sales ratio of 7.64.

Zendesk Inc


The guru sold out of their 654,423-share investment in NYSE:ZEN. Previously, the stock had a 3.84% weight in the equity portfolio. Shares traded for an average price of $108.63 during the quarter.

On 05/15/2022, Zendesk Inc traded for a price of $102.15 per share and a market cap of $12,517,801,000. The stock has returned -21.83% over the past year.

GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 3 out of 10.

In terms of valuation, Zendesk Inc has a price-book ratio of 38.23, a EV-to-Ebitda ratio of -86.83 and a price-sales ratio of 8.62.

The price-to-GF Value ratio is 0.71, earning the stock a GF Value rank of 10.

Workday Inc


The guru established a new position worth 211,231 shares in NAS:WDAY, giving the stock a 3.27% weight in the equity portfolio. Shares traded for an average price of $238.19 during the quarter.

On 05/15/2022, Workday Inc traded for a price of $182.29 per share and a market cap of $46,238,293,000. The stock has returned -18.10% over the past year.

GuruFocus gives the company a financial strength rating of 7 out of 10 and a profitability rating of 4 out of 10.

In terms of valuation, Workday Inc has a price-earnings ratio of 1822.90, a price-book ratio of 10.09, a EV-to-Ebitda ratio of 118.71 and a price-sales ratio of 8.99.

The price-to-GF Value ratio is 0.67, earning the stock a GF Value rank of 8.

TransDigm Group Inc


The guru sold out of their 80,568-share investment in NYSE:TDG. Previously, the stock had a 2.88% weight in the equity portfolio. Shares traded for an average price of $642.63 during the quarter.

On 05/15/2022, TransDigm Group Inc traded for a price of $563.81 per share and a market cap of $30,775,568,000. The stock has returned -3.88% over the past year.

GuruFocus gives the company a financial strength rating of 3 out of 10 and a profitability rating of 10 out of 10.

In terms of valuation, TransDigm Group Inc has a price-earnings ratio of 39.24, a price-earnings-to-growth (PEG) ratio of 5.04, a EV-to-Ebitda ratio of 20.25 and a price-sales ratio of 6.60.

The price-to-GF Value ratio is 0.98, earning the stock a GF Value rank of 6.

Controladora Vuela Compania de Aviacion SAB de CV


The guru established a new position worth 2,415,697 shares in NYSE:VLRS, giving the stock a 2.84% weight in the equity portfolio. Shares traded for an average price of $17.79 during the quarter.

On 05/15/2022, Controladora Vuela Compania de Aviacion SAB de CV traded for a price of $13.49 per share and a market cap of $1,559,542,000. The stock has returned -21.98% over the past year.

GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 7 out of 10.

In terms of valuation, Controladora Vuela Compania de Aviacion SAB de CV has a price-earnings ratio of 17.29, a price-book ratio of 5.94, a price-earnings-to-growth (PEG) ratio of 2.98, a EV-to-Ebitda ratio of 12.58 and a price-sales ratio of 0.63.

The price-to-GF Value ratio is 0.82, earning the stock a GF Value rank of 7.


Please note, the numbers and facts quoted are as of the writing of this article and may not factor in the latest trading data or company announcements.

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