Andreas Halvorsen (Trades, Portfolio), founding partner and chief investment officer of Viking Global Investors LP, disclosed this week his top four position boosts during the third quarter were Alibaba Group Holding Ltd. (BABA, Financial), General Electric Co. (GE, Financial), Walt Disney Co. (DIS, Financial) and Marathon Petroleum Corp. (MPC, Financial).
According to the fund's website, the former protégé of Tiger Management founder Julian Robertson (Trades, Portfolio) employs a research intensive, long-term focused investment approach. The fund primarily invests in companies based on a thorough assessment of their business models and fundamentals and the quality of their management teams. Halvorsen’s top sectors in terms of portfolio weight are consumer cyclical, health care, industrials and energy.
Alibaba
Halvorsen added 7,388,433 shares of Alibaba, boosting the position 354.21%. The transaction increased the equity portfolio 6.74%. Shares of the Chinese retail giant averaged $176.96 during the quarter.
Alibaba CEO Daniel Zhang said on Nov. 2 annual active consumers increased to 601 million for the 12 months ending Sept. 30, driven by continued strength of the company’s digital economy and “New Retail” strategy. Consolidated revenues of $12.398 billion stemmed from double-digit growth in Alibaba’s key businesses, which include core commerce, cloud computing, digital media and entertainment.
GuruFocus ranks Alibaba’s profitability 8 out of 10: the company’s profit margins are outperforming 98% of global specialty retailers even though margins have contracted approximately 9% per year over the past five years. Additionally, Alibaba’s business predictability ranks 3.5 stars out of five on consistent revenue and earnings growth over the past 10 years.
Other gurus riding Alibaba’s strong growth and momentum include PRIMECAP Management (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Daniel Loeb (Trades, Portfolio).
General Electric
Having invested in 68,408,502 shares during the previous quarter, Halvorsen added 64,021,293 shares of GE for an average price of $12.86 per share, boosting the holding 93.59%. The transaction increased the equity portfolio 4%.
Shares of GE increased on Tuesday on news the embattled conglomerate agreed to accelerate the sale of Baker Hughes, a GE Co. (BHGE, Financial). Despite this, the company pared gains on Wednesday on the Boston-based conglomerate’s announcement it will sell 92 million shares of Baker Hughes to the public at $23 per share.
GuruFocus ranks GE’s financial strength 4 out of 10 on several weak indicators, which include a debt-to-equity ratio that underperforms 96% of global competitors and an Altman Z-score that suggests moderate to severe financial distress.
Walt Disney
Halvorsen added 5,116,214 shares of Walt Disney for an average price of $111.30 per share, boosting the position 88.94%. The transaction increased the equity portfolio 3.31%.
Walt Disney CEO Bob Iger said on Nov. 8 the company delivered “record revenue, net income and earnings per share” for fiscal 2018. Igor also said Disney “remains focused” on completing its acquisition of Twenty-First Century Fox Inc. (FOX, Financial)(FOXA, Financial), a company Seth Klarman (Trades, Portfolio) continued investing in during the quarter.
Diluted earnings for the 12 months ending Sept. 29 were $8.36 per share, compared to $5.69 per share from fiscal 2017.
GuruFocus ranks Disney’s profitability 9 out of 10 on several positive investing signs, which include expanding profit margins and a strong Piotroski F-score of 8. Additionally, the company’s business predictability ranks 4.5 stars out of five on strong and consistent revenue and earnings growth over the past 10 years.
Marathon Petroleum
Halvorsen added 6,386,336 shares of Marathon Petroleum for an average price of $79.08 per share, boosting the holding 835.07%. The transaction increased the equity portfolio 2.83%.
Marathon Petroleum engages in the refining, marketing, retail and transportation of petroleum products in the U.S. GuruFocus ranks the company’s profitability 5 out of 10: although the company has a strong Piotroski F-score of 8, its operating margin outperforms just 55% of global competitors. The company’s three-year revenue growth rate is -5% despite outperforming 60% of global energy refining and marketing companies.
Disclosure: No positions.
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