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James Li
James Li
Articles (863)  | Author's Website |

Julian Robertson Buys 3 Stocks in 2nd Quarter

New positions include David Tepper’s former top holding Micron Technology

Julian Robertson (Trades, Portfolio), founder and CEO of Tiger Management, disclosed this week his three new positions for the second quarter were Applied Materials Inc. (NASDAQ:AMAT), Micron Technology Inc. (NASDAQ:MU) and Qualcomm Inc. (NASDAQ:QCOM).

Considered the “father of hedge funds,” Robertson founded Tiger Management in 1980 with approximately $8 million. During the 1980s and 1990s, the fund manager expanded the $8 million to over $22 billion, garnering one of the best records among hedge funds.

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Robertson closed Tiger Management to outside investors in 2000 and has since managed his own money. He also mentored several of our other gurus that GuruFocus Premium members can view current and past portfolio data on, as well as Real-Time Picks. The “Tiger Cubs” include Philippe Laffont (Trades, Portfolio) of Coatue Management, Andreas Halvorsen (Trades, Portfolio) of Viking Global Partners, Chase Coleman (Trades, Portfolio) of Tiger Global Management, Lee Ainslie (Trades, Portfolio) of Maverick Capital and Steve Mandel (Trades, Portfolio) of Lone Pine Capital.

As of quarter-end, Robertson’s equity portfolio contains 23 stocks, with 56.31% weight in the technology sector and 23.29% weight in the financial services sector. The guru invests using long and short strategies.

Applied Materials

Robertson purchased 255,700 shares of Applied Materials, giving the position 4.66% weight in the equity portfolio. Shares averaged $42.09 during the quarter.

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The Santa Clara, California-based company supplies various semiconductor manufacturing equipment, including etching, chemical mechanical polishing and wafer-inspection systems. Applied Materials said in an Aug. 15 earnings release that net revenues for the quarter ending July 28 were $3.562 billion, down 14% from net revenues in the prior-year quarter.

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Although the company’s three-year revenue growth rate of 21.30% outperforms 82.01% of global competitors, Applied Materials’ revenue increased just 4.20% over the trailing 12 months, a warning sign of decelerating revenue growth.

Micron Technology

Robertson purchased 287,400 shares of Micron Technology, giving the holding 4.50% weight in the equity portfolio.

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The Boise, Idaho-based company provides dynamic random-access memory chips for personal computers and servers. GuruFocus ranks Micron Technology’s financial strength and profitability 8 out of 10 on several positive indicators, which include a strong Altman Z-score of 5.29 and operating margins that have increased approximately 38.10% per year on average over the past five years and is outperforming 96.46% of global competitors.

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Parnassus Endeavor Fund (Trades, Portfolio) leader Jerome Dodson (Trades, Portfolio) said in his second-quarter letter that Micron detracted from the portfolio’s performance as prices for the company’s DRAM products declined in light of the U.S.-China trade war and export ban on Chinese technology company Huawei.

Two other gurus made significant transactions in Micron over the past six months. Mohnish Pabrai (Trades, Portfolio) added 1,238,898 shares in the aggregate over the past two quarters, more than tripling his stake from fourth-quarter 2018. As of the June quarter, Pabrai dedicated 23.43% of his U.S.-based equity portfolio, which represents a small fraction of his entire investing portfolio, to the holding.

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On the flip side, David Tepper (Trades, Portfolio), who had Micron Technology as his top holding over the past several quarters, axed 95.32% of his stake during the second quarter, selling 18.35 million shares. The transaction reduced Tepper’s equity portfolio by 21.96%.

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Qualcomm

Robertson purchased 123,500 shares of Qualcomm, giving the position 3.81% equity portfolio weight. Shares averaged $73.23 during the quarter.

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The San Diego-based company develops and licenses wireless technology and also designs chips for mobile phones. GuruFocus ranks Qualcomm’s financial strength 5.3 out of 10: Although the company has a strong Piotroski F-score of 7 and a strong Altman Z-score of 3.70, its debt-to-equity ratio of 3.01 underperforms 97.92% of global competitors.

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Dodson said in his letter that Qualcomm contributed most to the Endeavor Fund’s portfolio return, with the stock posting its largest one-day jump in nearly 20 years on Qualcomm’s litigation settlement with Apple Inc. (NASDAQ:AAPL), the top holding of Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B).

See also

Robertson’s top three holdings as of quarter-end are Blackstone Group Inc. (NYSE:BX), Microsoft Corp. (NASDAQ:MSFT) and Facebook Inc. (NASDAQ:FB). GuruFocus Premium members can view the top 10 holdings on over 150 gurus as well as the Aggregated Portfolio.

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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