Stanley Druckenmiller (Trades, Portfolio), CEO of the Duquesne Family Office, disclosed in November that his top four buys in the third quarter included increased bets in ServiceNow Inc. (NOW, Financial) and General Electric Co. (GE, Financial) as well as new positions in Shopify Inc. (SHOP, Financial) and Anaplan Inc. (PLAN, Financial).
Druckenmiller, who managed money for George Soros (Trades, Portfolio) in the late 1990s as the lead portfolio manager of the Quantum Fund, turned his Duquesne hedge fund into a family office in 2010. The guru takes a macroeconomic approach to investing.
As of quarter-end, Druckenmiller’s $2.57 billion equity portfolio contains 43 stocks, of which 13 represent new holdings. The top three sectors in terms of weight are technology, consumer cyclical and communication services.
ServiceNow
Druckenmiller purchased 307,038 shares of ServiceNow, increasing the position 153.08% and the equity portfolio 3.03%. Shares averaged $272.05 during the quarter.
The Santa Clara, California-based company develops information technology service management software for enterprise-level customers. According to GuruFocus, ServiceNow’s three-year revenue growth rate of 31.50% outperforms 88.43% of global competitors. Operating margins are increasing, albeit they underperform 61.87% of global software companies.
GE
Druckenmiller purchased 8,654,718 shares of GE, increasing the stake 139.80% and the equity portfolio 3.01%. Shares averaged $9.43 during the quarter.
The Duquesne fund manager disclosed to CNBC’s Kelly Evans in August that he bought shares of the Boston-based industrial conglomerate in response to a whistleblower report accusing GE of “an Enron-like fraud.” GE denounced in a press release that the report contains “meritless” statements regarding its integrity, underscoring that the company “operates at the highest level of integrity and stands behind its financial reporting.” Druckenmiller believed in GE CEO Lawrence Culp’s statements regarding the report and bought shares during the stock’s plunge that day.
GE has a strong Piotroski F-score of 7 according to GuruFocus data. Despite this, the company's operating margin has declined approximately 11.3% per year over the past five years, a warning sign of declining profitability.
Other gurus that increased their GE holdings during the quarter included Ken Fisher (Trades, Portfolio) and the T Rowe Price Equity Income Fund (Trades, Portfolio).
Shopify
Druckenmiller purchased 212,480 shares of Shopify, giving the holding 2.58% weight in the equity portfolio. Shares averaged $342.64 during the quarter.
The Ottawa, Ontario-based company provides a cloud-based commerce platform designed for small and mid-sized businesses. GuruFocus ranks Shopify’s financial strength 8 out of 10 on several positive investing signs, which include an Altman Z-score in the double digits and a cash-to-debt ratio that outperforms 70.25% of global competitors. Despite this, Shopify has a weak Piotroski F-score of 2.
Anaplan
Druckenmiller purchased 1,323,345 shares of Anaplan, giving the stake 2.42% weight in the equity portfolio. Shares averaged $54.24 during the quarter.
The San Francisco-based company facilitates dynamic, collaborate and intelligent planning through its Collective Planning platform. The company, which went public in October 2018, said in November that revenues for the third quarter were $89.4 million, including $79.7 million in subscription revenues.
Disclosure: No positions.
Read more here:
- Wallace Weitz's Major Consumer Cyclical Holdings
- 5 Manufacturing Companies Gurus Broadly Own
- 5 Asian Stocks Gurus Agree On
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
