U.K.-based investment firm Baillie Gifford (Trades, Portfolio) recently disclosed its portfolio updates for the first quarter of 2023, which ended on March 31.
Established over 100 years ago, Baillie Gifford (Trades, Portfolio) is an investment management firm that has a commitment to long-term growth investments. It puts investment ideas through a rigorous process of fundamental analysis and research, looking for companies around the globe that demonstrate the potential to grow at a faster rate on a more sustainable basis than their peers.
According to the firm’s 13F report for the latest quarter, its top buys included a sizeable addition to Advanced Micro Devices Inc. (AMD, Financial) and a new buy for Samsara Inc. (IOT, Financial). On the sell side, the firm sold out of Salesforce Inc. (CRM, Financial) and slashed its Illumina Inc. (ILMN, Financial) stake.
Investors should be aware 13F reports do not provide a complete picture of a guru’s holdings. They include only a snapshot of long equity positions in U.S.-listed stocks and American depository receipts as of the quarter’s end. They do not include short positions, non-ADR international holdings or other types of securities. However, even this limited filing can provide valuable information.
Advanced Micro Devices
Previously, Baillie Gifford (Trades, Portfolio) owned only a nominal position worth 118 shares in Advanced Micro Devices (AMD, Financial), but as of the first quarter’s end, the firm held 8,728,290 shares, adding 0.77% to the equity portfolio at the quarter’s average share price of $81.38.
Advanced Micro Devices is a semiconductor company headquartered in Santa Clara, California. It develops computer processors and related technologies and also produces flash memories, graphics processors, motherboard chip sets and other components used in consumer electronics goods. Despite the cyclical downturn in other parts of the semiconductor demand stream, AMD is benefitting from the growing popularity of artificial intelligence.
GuruFocus gives the company a financial strength rank of 8 out of 10 and a profitability rank of 7 out of 10. The company has a three-year revenue per share growth rate of 35.7% and a three-year earnings per share growth rate of 40.9%. The GF Value chart rates the stock as fairly valued after the recent upswing.
Samsara
The firm established a new position of 18,813,062 shares in Samsara Inc. (IOT, Financial), giving it a 0.33% equity portfolio weight. During the quarter, shares averaged $15.85 apiece.
Samsara is a technology company focused on the internet of things. Its Connected Operations Cloud allows customers to harness the power of IoT data to develop insights and improve the efficiency, safety and sustainability of their operations. The San Francisco-based company has a decent runway for growth with its ability to manage and optimize vehicle fleets and industrial operations.
As a fairly recent initial public offering with a strong backing from investors, Samsara is still flush with cash, even though it is not profitable. While the gross margin is 72.01%, the operating margin is -39.60%. Shares are down 20% since the company went public near the end of 2021.
Salesforce
The firm sold out of its 3,312,517-share stake in Salesforce (CRM, Financial), which previously took up 0.46% of the equity portfolio. Shares traded for an average price of $168.91 for the quarter.
Salesforce is a subscription-based cloud software provider headquartered in San Francisco. It provides corporate customers with market-leading sales, marketing, customer relationship management, analytics and application development tools. While Salesforce is still consistently seeing revenue growth, its earnings really have not improved overall since 2018, drawing activist investors to try their hands at a turnaround effort.
The company's three-year revenue per share growth rate of 16.1% and three-year earnings per share growth rate of 11.9% may look good at first glance, but as shown in the chart below, earnings have fallen off a cliff more recently. The forward price-earnings ratio of 30.13 is a little on the high side.
Illumina
The firm trimmed its stake in Illumina (ILMN, Financial) by 9.97% for a remaining holding of 15,073,358 shares, slimming the equity portfolio by 0.35%. Shares averaged $210.38 apiece for the quarter.
Based in San Diego, Illumina is a biotechnology company that develops, manufactures and markets integrated systems for the sequencing and analysis of genetic variation and biological function. Its products enable researchers to explore DNA at an unprecedented scale. Its acquisition of cancer test maker Grail was supposed to boost growth dramatically, but due to antitrust concerns, regulators have ordered Illumina to divest Grail, though the company plans to keep fighting the decision in court.
Despite a solid GuruFocus profitability rank of 8 out of 10, Illumina has struggled recently, bringing its bottom line into the red for most of 2022. The GF Value chart rates the stock a possible value trap as the decline in share price has been accompanied by a decline in profitability.
See also
As of the quarter’s end, the firm held shares of 454 stocks in a 13F equity portfolio valued at $110.83 billion. The turnover for the quarter was 3%.
The firm’s top holding was MercadoLibre Inc. (MELI, Financial) with 7.29% of the equity portfolio, followed by Moderna Inc. (MRNA, Financial) with 6.44% and Tesla Inc. (TSLA, Financial) with 4.88%.
In terms of sector weighting, the firm was most invested in consumer cyclical, technology and health care stocks.
