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James Li
James Li
Articles (836)  | Author's Website |

Stanley Druckenmiller’s Top 5 Buys in the 2nd Quarter

Guru discloses GE buy amid whistleblower report

August 15, 2019 | About:

Stanley Druckenmiller (Trades, Portfolio), CEO of the Duquesne Family Office, disclosed this week his top five buys for the second quarter were Uber Technologies Inc. (NYSE:UBER), Salesforce.com Inc. (NYSE:CRM), PG&E Corp. (NYSE:PCG), Barrick Gold Corp. (NYSE:GOLD) and JD.com Inc. (NASDAQ:JD).

On Thursday, the former partner of George Soros (Trades, Portfolio) disclosed to CNBC’s Kelly Evans he bought shares of General Electric Co. (NYSE:GE), a company that sank over 11% on the heels of a report from Madoff whistleblower Harry Markopolos accusing the Boston-based industrial conglomerate of engaging in "Enron-like fraud,” according to sources from CNBC columnists John Melloy and Kate Rooney. Druckenmiller disclosed a 6,190,650-share stake in GE as of June, down a slight 0.81% from his purchase of 6.241 million shares during the first quarter.

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Druckenmiller closed his hedge fund in 2010 and now manages the Duquesne Family Office. As of quarter-end, the firm’s $3.37 billion equity portfolio contains 61 stocks, of which 19 represent new positions. The top two sectors in terms of weight are technology, which occupies 46.96% of the equity portfolio, and consumer discretionary, which occupies 25.93%.

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Uber

Druckenmiller purchased 2,689,840 shares of Uber, giving the stake 3.70% weight in the equity portfolio. Shares averaged $42.42 during the period between the company’s May 10 initial public offering date and June 30.

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According to GuruFocus data, the San Francisco-based ride-hailing company has a cash-to-debt ratio of 1.41, underperforming 60.71% of global competitors. Likewise, Uber’s debt-to-equity ratio of 0.44 underperforms 64.64% of global competitors.

Other gurus that established holdings in the ride-hailing company include several of Julian Robertson (Trades, Portfolio)’s “Tiger Cubs,” including Philippe Laffont (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Steve Mandel (Trades, Portfolio)’s Lone Pine Capital and Chase Coleman (Trades, Portfolio)’s Tiger Global Management.

Salesforce.com

Druckenmiller purchased 482,103 shares of Salesforce.com, giving the position 2.17% equity portfolio weight. Shares averaged $156.67 during the quarter.

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The San Francisco-based company offers customer relationship management applications around sales, customer service, marketing and analytics. GuruFocus ranks Salesforce.com’s financial strength 6.4 out of 10: Even though the company’s debt-to-equity ratio underperforms 59.89% of global competitors, it has a solid Piotroski F-score of 6 and a strong Altman Z-score of 5.14.

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PG&E

Druckenmiller purchased 3,051,300 shares of PG&E, giving the stake 2.08% weight in the equity portfolio. Shares averaged $20.09 during the quarter.

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The San Francisco-based company operates Pacific Gas and Electric, a regulated utility operating in Central and Northern California. According to GuruFocus, PG&E’s cash-to-debt ratio of 0.83 outperforms 88.34% of global competitors while its debt-to-equity ratio of 0.40 outperforms 96.89% of global competitors. Despite this, PG&E’s financial strength ranks just 5.6 out of 10 on the heels of low interest coverage.

Barrick Gold

Druckenmiller purchased 3,980,100 shares of Barrick Gold, giving the holding 1.86% equity portfolio weight. Shares averaged $13.25 during the quarter.

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The Toronto-based company operates gold mines in North America, South America, Australia and Africa. GuruFocus ranks Barrick Gold’s financial strength 5 out of 10: Although the company has a solid Piotroski F-score of 5, its interest coverage and debt ratios are underperforming over 57% of global competitors.

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JD.com

Druckenmiller purchased 1,299,213 shares of JD.com, giving the position 1.17% equity portfolio weight. Shares averaged $28.75 during the quarter.

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The Beijing-based e-commerce company offers a wide selection of authentic products at competitive prices. GuruFocus ranks JD.com’s financial strength 5.7 out of 10: Even though the company’s equity-to-asset ratio underperforms 73.29% of global competitors, it has a strong Altman Z-score of 3.66 and a moderately strong Piotroski F-score of 6.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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