One of the world’s best investors, Stanley Druckenmiller (Trades, Portfolio), disclosed his third-quarter investment action this week, incorporating 18 stocks into his portfolio of 40 positions.
Druckenmiller, a former business partner of the legendary investor George Soros (Trades, Portfolio), selected as his largest new positions PayPal Holdings Inc. (PYPL, Financial), Abbott Laboratories (ABT, Financial), Citigroup Inc. (C, Financial), ServiceNow Inc. (NOW, Financial) and Medtronic PLC (MDT, Financial). The portfolio saw 32.2% turnover, ending the quarter valued at $2.1 billion. It is rooted in technology, which encompasses 54.8% of stocks, while consumer cyclical stocks follow at a distant 14.5% and health care at 12.9%.
Noted for his macro investing style, Druckenmiller accumulated one of the best 30-year trading records in history, compounding returns at a rate of 30%. He also participated in George Soros' (Trades, Portfolio) famous 1992 short of the British pound that reaped a $1 billion profit. His Duquesne Family Office, opened in 2010, has never suffered a down year.
Druckenmiller made most of his money during his 30-year streak in currencies and bonds, an area that has become “squished” and “very challenging,” he said in an in-depth interview this week. Over the past eight to nine years, he has had to reorient himself to the equity market.
For 2018, he encapsulated his macro view as a “very, very challenging puzzle,” with interest rates too low worldwide and $1 trillion-per-year quantitative easing ceasing by the end of the year, he said in the interview. At the start of the year, Druckenmiller expected markets to begin to discount the shrinking central bank balance sheets by July or August, but had been wrong for several months.
“So the cocktail I mixed up for here was to continue – and this has been going on for three or four years at my firm – was to continue to buy the disruptors – that would be the cloud-based companies, the internet companies – to short the disrupted, which would be things like retail, staples, that kind of stuff,” he said.
Although his trend of tech buying continued, Druckenmiller reduced positions in several leaders in the space during the third quarter, chopping 97.7% of Facebook (FB, Financial), 97.2% of Netflix Inc. (NFLX, Financial), and 90.3% of Alibaba Group Holding (BABA, Financial).
New buys
PayPal Holdings Inc. (PYPL, Financial)
Druckenmiller purchased 727,500 shares of the company, giving it 3.04% portfolio weight. The stock’s third-quarter price averaged around $88 per share.
Paypal Holdings Inc. has a market cap of $97.55 billion; its shares were traded around $85.43 Friday with a price-earnings ratio of 49.38 and price-sales ratio of 6.9. Paypal Holdings Inc. had an annual average earnings growth of 18.0% over the past five years.
Abbott Laboratories (ABT, Financial)
Druckenmiller purchased 732,100 shares of the company, giving it 2.55% portfolio weight. The stock’s third-quarter price averaged $66 per share.
Abbott Laboratories has a market cap of $124.16 billion; its shares were traded around $72.04 Friday with a price-earnings ratio of 150.08 and price-sales ratio of 4.19. The trailing 12-month dividend yield of Abbott Laboratories is 1.56%. The forward dividend yield of Abbott Laboratories is 1.58%. Abbott Laboratories had an annual average earnings growth of 9.10% over the past five years.
Druckenmiller purchased 667,100 shares, giving it 2.27% portfolio weight. The stock’s third-quarter price averaged around $71 per share.
Citigroup Inc. has a market cap of $155.92 billion; its shares were traded around $64.95 Friday with and price-sales ratio of 2.29. The trailing 12-month dividend yield of Citigroup Inc. is 2.35%. The forward dividend yield of Citigroup Inc. is 2.79%.
ServiceNow Inc. (NOW, Financial)
Druckenmiller purchased 194,300 shares, giving it 1.81% portfolio weight. The stock’s third-quarter price averaged around $189 per share.
ServiceNow Inc. has a market cap of $30.68 billion; its shares were traded around $171.09 Friday with a price-sales ratio of 12.74.
Medtronic PLC (MDT, Financial)
Druckenmiller purchased 372,500 shares, giving it 1.74% portfolio weight. The stock’s third-quarter price averaged around $92 per share.
Medtronic PLC has a market cap of $126.79 billion; its shares were traded around $93.70 Friday with a price-earnings ratio of 40.57 and price-sales ratio of 4.26. The trailing 12-month dividend yield of Medtronic PLC is 2.05%. The forward dividend yield of Medtronic PLC is 2.16%. Medtronic PLC had an annual average earnings growth of 6.90% over the past 10 years. GuruFocus rated Medtronic PLCĂ‚ the business predictability rank of 4.5-star.
See Stanley Druckenmiller (Trades, Portfolio)’s portfolio here.
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