Stanley Druckenmiller (Trades, Portfolio) altered his course in the first quarter, buying 40 stocks and boosting exposure to the consumer cyclical sector while delving deeper into his favored tech companies, to give his portfolio 56% turnover.
Druckenmiller, who closed his hedge fund Duquesne Capital Management to manage a family office in 2010, increased the value of his long portfolio to $3.45 billion in the first quarter, from $1.73 billion in the fourth quarter of 2018. Famous for collaborating with George Soros (Trades, Portfolio) on macro trades at his Quantum Fund, Druckenmiller is known to make concentrated bets on his highest-conviction ideas. Over three decades, he produced annual returns of 30%.
In the first quarter, he affirmed his confidence in certain tech stocks, which make up five of his six largest holdings. Druckenmiller enlarged his top holding in Microsoft Corp. (MSFT, Financial) by 12% to 17.68% of his long equity portfolio. He also boosted Amazon.com Inc. (AMZN, Financial) by 15.53%, Netflix Inc. (NFLX, Financial) by 717.87%, Adobe Inc. (ADBE, Financial) by 112.68% and Alibaba Group Holding Ltd. (BABA) by 432.56%.
(GuruFocus categorizes Amazon and Netflix as consumer cyclical stocks.)
Druckenmiller also expanded his exposure to other parts of the tech industry. Of his 61 added positions, 19 were of tech stocks, while he exited only three in the space: his former third-largest position Salesforce.com Inc. (CRM, Financial), Zendesk Inc. (ZEN, Financial) and Elastic NV (ESTC, Financial). Druckenmiller eliminated nine positions in all during the quarter.
In an interview with Bloomberg on Dec. 8, Druckenmiller said he liked “secular growth stocks” such as Microsoft and Salesforce.com because of their cloud computing businesses.
“Everything has to convert to the cloud. If we get in a mild recession, demand goes up because it’s a way to cut costs,” he told Bloomberg.
The flood of buying in the first quarter and deletion of Salesforce diluted his portfolio’s overall weighting in technology to 39.95% from 51.19% in the previous quarter. Consumer cyclical stocks, meanwhile, grew to 21.22% from 12.78%, and health care fell to 9.98% from 19.6%. Other buys came from an array of industries he previously had modest or no exposure to, such as energy, industrials and financial services.Â
His largest stock positions started during the first quarter were: T-Mobile US Inc. (TMUS, Financial), The Home Depot Inc. (HD, Financial), General Electric Co. (GE, Financial), Mastercard Inc. (MA, Financial) and Visa Inc. (V, Financial).
New buys
T-Mobile US Inc. (TMUS, Financial)
Druckenmiller purchased 1,915,725 shares of T-Mobile US Inc., giving it 3.84% portfolio weight. The stock’s first-quarter share price averaged $70.
T-Mobile US Inc. has a market cap of $65.91 billion; its shares were traded around $77.15 with a price-earnings ratio of 21.08 and price-sales ratio of 1.49. T-Mobile US Inc. had an annual average earnings growth of 15.40% over the past five years.
The Home Depot Inc. (HD, Financial)
Druckenmiller purchased 387,300 shares of The Home Depot Inc., giving it 2.15% portfolio weight. The stock’s first-quarter share price averaged $183.
The Home Depot Inc. has a market cap of $211.12 billion; its shares were traded around $191.45 with a price-earnings ratio of 19.65 and price-sales ratio of 2.01. The trailing 12-month dividend yield of The Home Depot Inc. is 2.33%. The forward dividend yield of The Home Depot Inc. is 2.85%. The Home Depot Inc. had an annual average earnings growth of 17.10% over the past 10 years. GuruFocus rated The Home Depot Inc. the business predictability rank of 4.5-star.
General Electric Co. (GE, Financial)
Druckenmiller purchased 8,741,000 shares of General Electric, giving it 1.81% portfolio weight. The stock’s first-quarter share price averaged $9.
General Electric Co. has a market cap of $86.86 billion; its shares were traded around $9.96 with a price-sales ratio of 0.72. The trailing 12-month dividend yield of General Electric Co. is 2.61%. The forward dividend yield of General Electric Co. is 0.40%.
Mastercard Inc. (MA, Financial)
Druckenmiller purchased 238,300 shares of Mastercard Inc., giving it 1.63% portfolio weight. The stock’s first-quarter share price averaged $215.
Mastercard Inc. has a market cap of $260.83 billion; its shares were traded around $255.36 with a price-earnings ratio of 42.62 and price-sales ratio of 17.42. The trailing 12-month dividend yield of Mastercard Inc. is 0.46%. The forward dividend yield of Mastercard Inc. is 0.52%. Mastercard Inc. had an annual average earnings growth of 13.60% over the past five years.
Druckenmiller purchased 350,900 shares of Visa Inc., giving it 1.59% portfolio weight. The stock’s first-quarter share price averaged $144.
Visa Inc. has a market cap of $369.17 billion; its shares were traded around $163.86 with a price-earnings ratio of 33.86 and price-sales ratio of 17.38. The trailing 12-month dividend yield of Visa Inc. is 0.59%. The forward dividend yield of Visa Inc. is 0.61%. Visa Inc had an annual average earnings growth of 22.30% over the past 10 years. GuruFocus rated Visa Inc. the business predictability rank of 4.5-star.
See Stanley Druckenmiller (Trades, Portfolio)’s portfolio here.
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