Graham & Doddsville Spring 2017 Issue: Begg, Sosin, Krishna

Columbia Business School is out with its spring 2017 issue of Graham and Doddsville.  It features:

- Interview with A. Rama Krishna of ARGA Investment Management who talked about investing in international markets and in particular, Russia.

- Interview with Cliff Sosin of CAS Investment Partners talking Herbalife (HLF) and World Acceptance (WRLD).

- Interview with Chris Begg of East Coast Asset Management, who we've featured on the site numerous times in the past.  He shares his thesis on TransDigm Group (TDG) and thoughts on Sherwin Williams (SHW).

The new issue also includes student investment pitches such as long Yum China (YUMC), long Alaska Airlines (ALK), long Corning (GLW), and long Dollarama (DOL).


Embedded below is the spring 2017 issue of Graham & Doddsville:



You can download a .pdf copy here.

For more of their past issues, we've also posted up their interview with Kingstown Capital as well as their interview with Meritage Group and MSD Capital.

Lee Ainslie's Maverick Capital Bullish on CVS Caremark (CVS) & Technology: 13F Filing Q1 2010

(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 filings.)

Next up is Lee Ainslie's hedge fund Maverick Capital. Lee founded the firm with seed capital from the Wyly Family in Texas after he left Julian Robertson's hedge fund Tiger Management. Maverick focuses on intensive fundamental research on both the long and short sides of the portfolio, but doesn't employ pairs trades. Ainslie likes to focus on risk management and positions typically do not exceed more than 8% of the portfolio. Maverick's analytical team is divided up by sector and place an emphasis on enterprise value to sustainable free cash flow.

Maverick is part of the Tiger Cub Portfolio created with Alphaclone where you can replicate the holdings of some of the top hedge funds in the game. For recent market insight from Ainslie, we covered Maverick's investor letter where Ainslie saw a decline in the price of risk. Additionally, he gave some of his thoughts at a hedge fund panel. To learn more about Ainslie, head to our profile of Maverick Capital.

The positions listed below were Maverick's long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:


Brand New Positions
Abercrombie & Fitch (ANF)

Dell (DELL)

Google (GOOG)

Hewlett Packard (HPQ)

Ironwood Pharmaceuticals (IRWD)

JPMorgan Chase (JPM)

Men's Wearhouse (MW)

Office Depot (ODP)

PNC Financial (PNC)

Solarwinds (SWI)

Stanley Black & Decker (SWK)


Increased Positions
Qualcomm (QCOM): Increased position by 269.7%

Bank of America (BAC): 159.3%

Pfizer (PFE): Increased by 125.8%

Expedia (EXPE): Increased by 95.4%

Family Dollar Stores (FDO): Increased by 88%

CVS Caremark (CVS): Increased by 85%

Davita (DVA): Increased by 68.8%

Wellpoint (WLP): Increased by 67.1%

Marvell Technology (MRVL): Increased by 60.9%

Corning (GLW): Increased by 56.9%

Visa (V): Increased by 48.6%

DirecTV (DTV): Increased by 30.6%

Mead Johnson Nutrition (MJN): Increased by 39.3%

Dish Network (DISH): Increased by 9.5%


Reduced Positions
Berkshire Hathaway (BRK.A): Reduced position by 99.6%

Gilead Sciences (GILD): Reduced by 47.2%

Healthnet (HNT): Reduced by 43.8%

Express Scripts (ESRX): Reduced by 42.2%

FedEx (FDX): Reduced by 30.6%

Athenahealth (ATHN): Reduced by 29.2%

Tyco International (TYC): Reduced by 22%


Positions They Sold Out of Completely
Autodesk (ADSK)

AIG (AIG)

Amgen (AMGN)

American Movil (AMX)

Anadys Pharmaceuticals (ANDS)

Apache (APA)

Autozone (AZO)

Brocade (BRCD)

Berkshire Hathaway (BRK.B)

Banco Santander (BSBR)

Citigroup (C)

Citrix (CTXS)

Cablevision (CVC)

Discovery Communications (DISCK)

Equinix (EQIX)

Green Mountain Coffee Roasters (GMCR)

Illumina (ILMN)

Infinera (INFN)

Lorillard (LO)

Priceline (PCLN)

Pepsico (PEP)

Parker Hannifin (PH)

RenaissanceRe (RNR)

Rovi (ROVI)

Sears Holdings (SHLD)

State Street (STT)

Target (TGT)

South Financial Group (TSFG)

Ultra Clean Holdings (UCTT)

Wells Fargo (WFC)

XenoPort (XNPT)

XTO Energy (XTO)

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

1. CVS Caremark (CVS): 4.04%

2. Marvell Technology (MRVL): 3.89%

3. Apple (AAPL): 3.88%

4. Corning (GLW): 3.88%

5. Qualcomm (QCOM): 3.82%

6. Pfizer (PFE): 3.80%

7. Wellpoint (WLP): 3.75%

8. Apollo Group (APOL): 3.73%

9. Family Dollar Stores (FDO): 3.73%

10. DirecTV (DTV): 3.67%

11. Hewlett Packard (HPQ): 3.54%

12. Progressive (PGR): 2.29%

13. Expedia (EXPE): 2.78%

14. Google (GOOG): 2.71%

15. Visa (V): 2.62%

CVS Caremark is Maverick's largest stake and here's a brief history with their position: Back in the first quarter of 2009, we actually saw Ainslie sell out of CVS and buy into rival Walgreens. Then in the fourth quarter of 2009, we posted on our Twitter account that Ainslie mentioned he was very keen on shares of CVS at an investment conference as it was one of his highest conviction picks. That much is now evident in his portfolio as CVS sits as Maverick's largest holding as of the first quarter in 2010. CVS was also mentioned on a list of analysts' best stock picks for 2010.

Earlier this morning we saw that John Griffin's Blue Ridge started a huge new position in Google (GOOG). Maverick did the same, albeit on a slightly smaller scale. So you have two very prominent hedge funds adding shares of GOOG in size and the stock now trades below any price they would have purchased at this past quarter. Additionally, we see that both Maverick & Blue Ridge sold out of data center play Equinix (EQIX). It should also be highlighted that Ainslie started a sizable stake in tech bellwether Hewlett Packard (HPQ) as well.

We also see Maverick sold over 40% of their Express Scripts (ESRX) position which is interesting because fellow Tiger Cub hedge fund Viking Global favors it as one of their top picks. If we were to hazard a guess, we'd say Maverick reduced this position because they have CVS (another pharmacy benefit management company) as their top holding. We also wanted to highlight Maverick's Family Dollar Stores (FDO) position because this is a name we've seen popping up on numerous 13F filings as of late as it attracts hedge fund interest (and as you'll see in our continuing coverage). Lastly, we make note of Ainslie's departure from some high flying stocks such as Priceline (PCLN) and Green Mountain Coffee Roasters (GMCR).

On a sector basis, Maverick's largest weightings are in technology and consumer services. This is along the lines of what we saw last quarter from Maverick as they bet on technology then as well. Assets reported on the 13F filing were $9.3 billion this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting (Market Folly readers can receive a special free 30 day trial). Remember that these filings are not representative of the hedge fund's entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We've already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman's Baupost Group, Warren Buffett's Berkshire Hathaway, Stephen Mandel's Lone Pine Capital, and Bill Ackman's Pershing Square, David Einhorn'sGreenlight Capital, Eddie Lampert's RBS Partners, David Tepper's Appaloosa Management, Mohnish Pabrai's Investment Fund, and John Griffin's Blue Ridge Capital. Be sure to check back daily for new hedge fund updates.

Lee Ainslie's Maverick Capital Bet Big On Technology Stocks

This is the third quarter 2009 edition of our hedge fund portfolio tracking series. If you're unfamiliar with tracking hedge fund movements or SEC filings, check out our series preface on hedge fund 13F filings.

Next up is Lee Ainslie's hedge fund firm Maverick Capital. Ainslie learned his ways under the guidance of hedge fund legend Julian Robertson and is a member of the Tiger Cub family. (You can view a Tiger Cub family tree here). As such, Maverick is a part of the Tiger Cub portfolio clone created with Alphaclone that is seeing great returns and is comprised of holdings widely held by all of the Tiger Cub hedge funds.

Maverick manages well over $8 billion and focuses on straight up stock picking on both sides of the book (long and short) but they do not employ pairs trades. They have six industry heads and each team handles their respective sector. Risk management is a big focus at Maverick and position sizes typically don't go above 5-8% of the portfolio. They focus on value and growth at a reasonable price (GARP) investments and they like to compare enterprise value to sustainable free cash flow. To learn more about this hedge fund, check out our profile/biography on Lee Ainslie & Maverick.

Keep in mind that the positions listed below were Maverick's long equity, note, and options holdings as of September 30th, 2009 as filed with the SEC. We don't cover every single portfolio maneuver, as we instead focus on all the big moves. All holdings are common stock unless otherwise denoted.


Some New Positions
Brand new positions that they initiated last quarter:
Corning (GLW)
Qualcomm (QCOM)
Citigroup (C)
Macys (M)
CVS Caremark (CVS)
Itron (ITRI)
Pfizer (PFE)
Bank of America (BAC)
Microsoft (MSFT)
Williams Sonoma (WSM)
Rovi Corporation (ROVI)
Google (GOOG)
Equinix (EQIX)
Whole Foods (WFMI)


Some Increased Positions
Positions they already owned but added shares to:
First Solar (FSLR): Increased position by 307.5%
Visa (V): Increased by 88.2%
Apollo Group (APOL): Increased by 49.4%
Gilead Science (GILD): Increased by 48.9%
Marvell Technology (MRVL): Increased by 42.9%
Priceline (PCLN): Increased by 42.2%
Berkshire Hathaway (BRK.B): Increased by 40%
Berkshire Hathaway (BRK.A): Increased by 37%
Amgen (AMGN): Increased by 31.3%


Some Reduced Positions
Stakes they sold shares in but still own:
Gap (GPS): Reduced position by 46.7%
Lorillard (LO): Reduced by 44.9%
PepsiCo (PEP): Reduced by 35.8%
Lender Processing (LPS): Reduced by 26%
Palm (PALM): Reduced by 22.3%
America Movil (AMX): Reduced by 18.9%
Davita (DVA): Reduced by 18.8%
Apache (APA): Reduced by 18.7%
Covidien (COV): Reduced by 9.9%


Removed Positions
Positions they sold out of completely:
Wyeth (WYE)
Walgreen (WAG)
Netapp (NTAP)
Research in Motion (RIMM)
Mastercard (MA)
State Street (STT)
Eaton (ETN)
Leap Wireless (LEAP)
CTrip (CTRP)
Hanesbrands (HBI)
Discovery Communications - Series C (DISCK)
Jetblue (JBLU)
Fifth Third Bancorp (FITB)
Finish Line (FINL)
Orthofix (OFIX)
BPW Acquisition (BPW-U)
Liberty Media Corp - Series A (LCAPA)
MSCI (MXB)
Officemax (OMX)


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

1. Apple (AAPL): 3.38%
2. Hewlett Packard (HPQ): 3.37%
3. Corning (GLW): 3.1%
4. Qualcomm (QCOM): 2.8%
5. Priceline (PCLN): 2.52%
6. Apollo Group (APOL): 2.5%
7. JPMorgan Chase (JPM): 2.5%
8. Gilead Sciences (GILD): 2.48%
9. Citigroup (C): 2.46%
10. Macys (M): 2.43%
11. Marvell Technology (MRVL): 2.42%
12. Amgen (AMGN): 2.3%
13. Liberty Media (LMDIA): 2.28%
14. Progressive (PGR): 2.21%
15. First Solar (FSLR): 2.2%
    

Maverick added to technology names the most on a quarter over quarter basis. Four of their top 10 holdings were brand new positions just added. Half of those were technology names (Qualcomm & Corning) and they were Maverick's third and fourth largest holdings respectively. Not to mention, Maverick's top two holdings were also tech plays in Apple and Hewlett Packard. Do you see a theme here?

Lee Ainslie's hedge fund also added largely to shares of Priceline, Apollo Group, and JP Morgan Chase. This is intriguing mainly because other 'Tiger Cub' hedge funds were buying the exact same names (see Andreas Halvorsen's Viking Global which we just covered this morning). A few other names Ainslie added to that are more unique to their portfolio include Gilead Sciences as well as First Solar, a name that they tripled their exposure in.

We also want to focus on their new portfolio addition in CVS Caremark. Way back in the first quarter of this year, Maverick sold out of CVS in favor of competitor Walgreens. Now, fast forward to the third quarter of this year and we see that Maverick has done the opposite and has sold completely out of Walgreens and started a new stake in CVS Caremark again. Possibly the most interesting aspect of this whole 'switcheroo' is that Lee Ainslie was at an investing conference in late October at the University of Virginia and he mentioned one of his current favorite plays was CVS. He obviously just added this name in the third quarter and then a few days after the conference on November 5th we saw shares of CVS drop from $36 to $28 and wondered if Ainslie was buying or not. Shares are now trading around the $30 mark. We'll definitely be interested to see what Ainslie did with this position when the fourth quarter portfolio disclosures are released given that he has been flip-flopping on various pharmacy plays throughout the year.

Below are some graphical illustrations of the changes made to Maverick Capital's portfolio courtesy of Drew Robertson at Financial Research Station:

(click to enlarge)

And also:

(click to enlarge)

Assets from the collective holdings reported to the SEC via 13F filing were $8.3 billion this quarter compared to $6.4 billion last quarter, so they deployed almost $2 billion into long US equities on a quarter over quarter basis. Please keep in mind that when we state "percentage of portfolio," we are referring to the percentage of assets reported on the 13F filing. Since these filings only report longs (and not shorts or cash positions), the percentages are skewed. Also, please again note that these positions were as of September 30th so two months have elapsed and they've undoubtedly shifted around their portfolio since then.

This is just one of the 40+ prominent funds that we'll be covering in our Q3 2009 hedge fund portfolio series. We've already covered Seth Klarman's Baupost Group Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Dan Loeb's Third Point LLC, David Einhorn's Greenlight Capital, John Paulson's firm Paulson & Co and Andreas Halvorsen's Viking Global so check back daily as we'll be covering new hedge fund portfolios.