Roberto Mignone's Bridger Management Bullish On Healthcare: 13F Filing ~ market folly

Friday, February 26, 2010

Roberto Mignone's Bridger Management Bullish On Healthcare: 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Roberto Mignone's hedge fund Bridger Management. They focus on both long/short and event driven strategies which you'll see evidence of in their portfolio below. Bridger has $2.8 billion in assets under management and is closed to new investors. Mignone likes to focus on investing rather than running a large organization. Not to mention, he argues that once you get 'too big' in AUM, you can't have a complementary short portfolio of necessary size. After all, Mignone is known for his sleuthing abilities on the short side of the book. Previously, we had detailed some of his investment thoughts for 2010 from a hedge fund panel.

Before Bridger, Mignone co-founded Blue Ridge Capital with John Griffin in 1996. And before that, Mignone (like Griffin) worked at Julian Robertson's Tiger Management, joining the ranks of other prominent 'Tiger Cub' hedge funds. Mignone received his degree from Harvard and his MBA from Harvard Business School.

The positions listed below were Bridger's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Brand New Positions
Medtronic (MDT)
Pfizer (PFE)
Hyatt Hotels (H)
Amerigroup (AGP)
State Street (STT)
Rino (RINO)
Aetna (AET)
Boyd Gaming (BYD)
Teekay (TK)
Synovus Financial (SNV)
China Real Estate Information (CRIC)
Talecris Biotherapeutics (TLCR)
Mannkind (MNKD)
Regions Financial (RF)
The rest of their new positions were each less than 0.25% of reported holdings, so much smaller stakes:
Casella Waste Systems (CWST) ~ a new position we'd already detailed, Amylin Pharmaceuticals (AMLN) Puts, Crucell (CRXL), Enhealth (EHTH), Given Imaging (GIVN) & Sanderson Farms (SAFM)

Increased Positions
Cardinal Health (CAH): Increased by 150%
Warner Chilcott (WCRX): Increased by 120%
Las Vegas Sands (LVS): Increased by 111.5%
Amgen (AMGN): Increased by 109.7%
Pall (PLL): Increased by 92.3%
Electronic Arts (ERTS): Increased by 75%
Onyx Pharmaceuticals (ONXX): Increased by 66.4%
Cardiome Pharma (CRME): Increased by 51.9%
OSI Pharma (OSIP): Increased by 48.8%
Waste Connections (WCN): Increased by 41.7%
Gilead Sciences (GILD): Increased by 40%
Ebay (EBAY): Increased by 31.1%
Unitedhealth (UNH): Increased by 28.9%
Royal Carribean (RCL): Increased by 18.9%

Reduced Positions
Davita (DVA): Reduced by 84.6%
Expedia (EXPE): Reduced by 78.2%
Ritchie Bros (RBA): Reduced by 70.3%
Eclipsys (ECLP): Reduced by 58.8%
Allergan (AGN): Reduced by 14%

Removed Positions (Sold out completely):
Ameriprise Financial (AMP)
Wyeth (WYE)
International Game Technology (IGT)
Invesco (IVZ) Copart (CPRT)
Continental Airlines (CAL)
Watson Pharma (WPI)
MGM Mirage (MGM)
Schering Plough (SGP)
Cablevision (CVC)
Monsanto (MON)
Allegiant Travel (ALGT)
Cigna (CI)
Schering Plough (SGP-PB)
Amylin Pharma (AMLN) Calls
Airtran Holdings (AAI)
Illumina (ILMN)
American Express (AXP)
Brunswick (BC)
Trimeris (TRMS)

Top 15 Holdings by percentage of assets reported on 13F filing

  1. Covidien (COV): 3.76%
  2. Medtronic (MDT): 3.41%
  3. Amgen (AMGN): 3.35%
  4. Pall Corp (PLL): 3.30%
  5. Millipore (MIL): 3.30%
  6. Waste Connections (WCN): 3.21%
  7. Cardinal Health (CAH): 3.03%
  8. Dr Pepper Snapple (DPS): 2.77%
  9. Unitedhealth (UNH): 2.32%
  10. Carmax (KMX): 2.21%
  11. Pfizer (PFE): 2.2%
  12. Royal Caribbean (RCL): 2.18%
  13. Berkshire Hathaway (BRK.A): 2.17%
  14. Apple (AAPL): 2.16%
  15. First American (FAF): 2.11%

Hedge fund Bridger Management doesn't have any overwhelmingly massive positions as you can see. Overall, they boosted exposure to healthcare and reduced exposure to services and technology. This falls in line with Goldman Sachs' research that showed hedge funds reducing tech holdings. Mignone likes health plays as he says there is a huge margin of safety.

Mignone's hedge fund started a massive new stake in Medtronic (MDT) as it is their 2nd largest US equity long now. They also bought a new position in Pfizer (PFE), something we've seen many hedge funds do as of late. In terms of positions they already owned but added to, Bridger doubled down on their Amgen stake and almost doubled their position in Pall too. Both those positions are in their top five reported holdings as well. We also want to highlight that Bridger could be set for a big payday on shares of Millipore (MIL). The company has been exploring strategic takeover maneuvers and there were rumors they had received a bid from Thermo Fisher Scientific that sent shares soaring earlier this week. Hedge fund Blue Ridge Capital also has a sizable MIL stake.

The event driven portion of their portfolio is evident in their 'sales' of Wyeth and Schering Plough. They no longer show those positions because they completed their respective mergers. While they didn't do much selling with their core holdings, they did completely sell out of previously sizable positions in Ameriprise Financial, International Game Technology and Invesco. That wraps up all the major moves. For investment insight from Bridger's manager Roberto Mignone, check out his thoughts at a recent hedge fund panel.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $2.19 billion this quarter compared to $2.10 billion last quarter. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, and Chris Shumway's hedge fund Shumway Capital Partners, Chase Coleman's Tiger Global, and Philip Falcone's Harbinger Capital Partners. Check back daily for our new updates.

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