Lee Ainslie's Maverick Capital Sells CVS Caremark (CVS) In Favor Of Walgreens (WAG): 13F Filing Q1 2009

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth over $5 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. Just yesterday we ran a profile on Robertson and took a deeper look at his current big investment. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global.

Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades. Maverick places a large emphasis on a team atmosphere and focuses on risk management. Instead of having one or two people making all the investment decisions, Maverick has six industry sector heads. The industry heads of the consumer, health care, cyclical, retail, financial, and technology sectors all report to Ainslie. While Ainslie still has the ultimate say, he considers them peers and values the team culture at Maverick. In an interview in the past, Ainslie has said "I spend the majority of my day talking to them because they know so much more about each of their stocks than I could ever hope to. We're all peers." Each team typically has around 7 analysts.

They are a long/short hedge fund in the true sense of the definition. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. 2008 was a rough year for them (and many other funds) as their Maverick Fund finished -26.2% for the year, as noted in our year-end hedge fund performance numbers post. Some of their notable past activity includes selling out of their entire Under Armour (UA) position via a 13G filing, as well as filing a 13G on Cardiovascular Systems (CSII).

For more background on Ainslie and Maverick, check out the profile/biography on them that we posted this morning.

The following were Maverick's long equity, note, and options holdings as of March 31st, 2009 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.


Some New Positions (Brand new positions that they initiated in the last quarter):
Walgreens (WAG)
Best Buy (BBY)
KLA-Tencor (KLAC)
Progressive (PGR)
Wellpoint (WLP)
Strayer Education (STRA)
Mastercard (MA)
Sears Holdings (SHLD)
Pepsico (PEP)
Davita (DVA)
Visa (V)
AmerisourceBergen (ABC)
PNC Financial Services (PNC)
Advanced Micro Devices (AMD) Bonds
Parker Hannifin (PH)
Green Mountain Coffee Roasters (GMCR)
Liberty Media (LCAPA)
Electronic Arts (ERTS)
Time Warner Cable (TWC)
Orthofix International (OFIX)
OptionsXpress (OXPS)
Air Methods (AIRM)
Bankrate (RATE)
Time Warner (TWX)


Some Increased Positions (A few positions they already owned but added shares to)
Netapp (NTAP): Increased by 190%
First Solar (FSLR): Increased by 90%
Lorillard (LO): Increased by 80%
HanesBrands (HBI): Increased by 61%
Cognizant Tech (CTSH): Increased by 57%
Resarch in Motion (RIMM): Increased by 40%
RenaissanceRe (RNR): Increased by 35%
Wyeth (WYE): Increased by 30%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Priceline (PCLN): Reduced by 37%
Fidelity National (FIS): Reduced by 29%
Pfizer (PFE): Reduced by 27%
JPMorgan Chase (JPM): Reduced by 25%
Gilead Sciences (GILD): Reduced by 24%
Lender Processing (LPS): Reduced by 20%
Qualcomm (QCOM): Reduced by 20%


Removed Positions (Positions they sold out of completely)
CVS Caremark (CVS)
Staples (SPLS)
Baxter (BAX)
Carnival (CCL)
Covidien (COV)
Devry (DV)
Macys (M)
Genentech (DNA)
Dicks Sporting Goods (DKS)
State Street (STT)
Textron (TXT)
Health Net (HNT)
Interval Leisure (IILG)
Universal American (UAM)


Top 15 Holdings (by % of portfolio)

1. Walgreens (WAG): 4.33% of portfolio
2. Lorillard (LO): 3.63% of portfolio
3. Apple (AAPL): 3.34% of portfolio
4. Research in Motion (RIMM): 3.28% of portfolio
5. First Solar (FSLR): 3.26% of portfolio
6. Raytheon (RTN): 3.1% of portfolio
7. Wyeth (WYE): 3.08% of portfolio
8. Cognizant Technology (CTSH): 3.06% of portfolio
9. Qualcomm (QCOM): 2.93% of portfolio
10. Liberty Media (LMDIA): 2.83% of portfolio
11. Best Buy (BBY): 2.73% of portfolio
12. Amgen (AMGN): 2.7% of portfolio
13. Marvell Technology (MRVL): 2.59% of portfolio
14. Apollo Group (APOL): 2.56% of portfolio
15. Netapp (NTAP): 2.19% of portfolio

Maverick started a brand new position in Walgreen's (WAG) and brought it all the way up to their top holding. Additionally, they sold completely out of their CVS Caremark (CVS) position (which had previously been their #1 holding the quarter prior). So, it looks like they've straight up swapped CVS in favor of WAG. That is by far and away their biggest move of the last quarter. Their brand new addition of Best Buy (BBY) was noted as well.

Regarding positions they already owned, Maverick significantly bumped up two of their holdings. They added significantly to their Lorillard (LO) and First Solar (FSLR) plays, as those two stand as their 2nd and 5th largest positions respectively. We also noticed their large purchase of Netapp (NTAP) shares, but even after the purchases, that position is still only their 15th largest holding.

Maverick's portfolio also definitely showcases their 'Tiger Cub' roots. They hold numerous Tiger favorite names such as Apollo Group, Wyeth, Apple, Lorillard, and Strayer Education. What's interesting when you track the Tiger Cubs is the slight divergences you begin to see amongst managers. While all of them are rooted in the same principles of investing they employed in their time at Tiger, they have all added their own twist and personal touch to the strategy. As such, you now see Maverick still holding Lorillard (LO) as their 2nd largest position. While, on the other hand, we recently saw Lone Pine completely sell out of their LO position. Conversely, a while ago John Griffin's Blue Ridge Capital had sold out completely out of Tiger Cub favorite name America Movil (AMX) when Lone Pine continued to add to their position. These divergences between the Tiger Cubs have become very intriguing to us and it almost becomes 'who do you want to follow now?' when they split opinions. In the end, it appears that Maverick still has conviction behind their LO play.

Assets from the collective holdings reported to the SEC via 13F filing were $5.5 billion this quarter compared to $4.8 billion last quarter. So, they definitely put some money to work on the long side of the portfolio over the first quarter of 2009. Maverick is just one of the 40+ prominent funds that we'll be covering in our hedge fund Q1 2009 portfolio series. Check back each day as we cover new fund portfolios. We've already covered Andreas Halvorsen's Viking Global, John Paulson's hedge fund Paulson & Co, Stephen Mandel's Lone Pine Capital, Eric Mindich's Eton Park Capital, John Griffin's Blue Ridge Capital, and David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, and Timothy Barakett's Atticus Capital.

Maverick Capital Makes Silly Calculation Error

In a recently further amended 13G filing with the SEC, hedge fund Maverick Capital has updated their position in CSII. In a very silly mistake, Maverick has noted in the amended filing that they "inadvertently reported a miscalculation of the percentage" (of shares beneficially owned by the reporting persons). In the initial amended 13G filing, Maverick had a 16.2% stake in the company, which is a miscalculation. Now, as you below, they are listed as owning 15.3%.

So, their shares owned amount remains the same, but the percentage ownership stake (as calculated by them) has been adjusted to correct their error. Maverick now shows a 15.3% stake in Cardiovascular Systems (CSII) with 2,228,441 aggregate amount beneficially owned. This just goes to show that while many hedge funds have some very talented minds, everyone makes mistakes and is human.

This was a new position for them as of March 10th, as they did not own it when we covered their portfolio prior to that. Again, please note, Maverick has not altered the amount of shares they own. They are simply amending the filing to correct their calculation error.

If you're unfamiliar with Maverick, here's their background: Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post.

Taken from Google Finance,

Cardiovascular Systems is "a biopharmaceutical company focused on discovering, developing, in-licensing and commercializing anti-infective products. The Company had been developing its product candidate REP3123, an investigational narrow-spectrum antibacterial agent for the treatment of Clostridium difficile (C. difficile) bacteria and C. difficile infection and its other anti-infective programs based on its bacterial deoxyribonucleic acid (DNA) replication inhibition technology."

Lee Ainslie's Maverick Capital Files 13G on Cardiovascular Systems (CSII)

In a recent 13G filing with the SEC, hedge fund Maverick Capital has disclosed a 16.2% stake in Cardiovascular Systems (CSII) with 2,228,441 aggregate amount beneficially owned. This is a new position for them, as they did not own it when we covered their portfolio just last week.

If you're unfamiliar with Maverick, here's their background: Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post.

Taken from Google Finance,

Cardiovascular Systems is "a biopharmaceutical company focused on discovering, developing, in-licensing and commercializing anti-infective products. The Company had been developing its product candidate REP3123, an investigational narrow-spectrum antibacterial agent for the treatment of Clostridium difficile (C. difficile) bacteria and C. difficile infection and its other anti-infective programs based on its bacterial deoxyribonucleic acid (DNA) replication inhibition technology."

Lee Ainslie's Maverick Capital 13F Filing: Q4 2008

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post. Some of their notable past activity includes selling out of their entire Under Armour (UA) position via a 13G filing.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.


Some New Positions (Brand new positions that they initiated in the last quarter):
Qualcomm (QCOM)
Staples (SPLS)
Carnival (CCL)
Pfizer (PFE)
JPMorgan Chase (JPM)
Eaton (ETN)
Biogen Idec (BIIB)
Macys (M)
Genentech (DNA)
Cummins (CMI)
Renaissance Holdings (RNR)
Discovery Communications (DISCA)
Discovery Communications (DISCK)
State Street (STT)
American Tower (AMT)
Xenoport (XNPT)
Chico Fas (CHS)
The Finish Line (FINL)
Petroquest (PQ)
Gymboree (GYMB)
Healthnet (HNT)
Interval Leisure (IILG)


Some Increased Positions (A few positions they already owned but added shares to)
DirecTV (DTV): Increased position by 92.6%
Berkshire Hathaway (BRK-A): Increased position by 73%
XTO Energy (XTO): Increased position by 36%
Cognizant (CTSH): Increased position by 33.9%
Fidelity Information (FIS): Increased position by 18.8%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Netapp (NTAP): Reduced position by 77.8%
Apollo Group (APOL): Reduced position by 64.2%
ThermoFisher Scientific (TMO): Reduced position by 64%
Lorillard (LO): Reduced position by 61%
Citrix (CTXS): Reduced position by 53.6%
First Solar (FSLR): Reduced position by 51.5%
Gilead (GILD): Reduced position by 46.5%
America Movil (AMX): Reduced position by 40.7%
Marvell (MRVL): Reduced position by 38%
Priceline (PCLN): Reduced position by 37.7%
Dicks Sporting Goods (DKS): Reduced position by 37.5%
Baxter (BAX): Reduced position by 31%
Infinera (INFN): Reduced position by 30%
DeVry (DV): Reduced position by 28.9%
Amgen (AMGN): Reduced position by 28.6%
Apple (AAPL): Reduced position by 25.96%
Berkshire Hathaway (BRK-B): Reduced position by 35.5%
Research in Motion (RIMM): Reduced position by 21.3%
Raytheon (RTN): Reduced position by 19.6%


Removed Positions (Positions they sold out of completely)
First Marblehead (FMD)
Comscore (SCOR)
Salesforce (CRM)
Hudson City Bancorp (HCBK)
JCrew (JCG)
VMWare (VMW)
Las Vegas Sands (LVS)
Leap Wireless (LEAP)
Freeport McMoran (FCX)
Lamar Advertising (LAMR)
Goldman Sachs (GS)
Yingli Green Energy (YGE)
M&T (MTB)
Digital River (DRIV)
Potash (POT)
Cardinal Health (CAH)
Morgan Stanley (MS)
BB&T (BBT)
MetroPCS (PCS)
UnderArmour (UA)
Resmed (RMD)
Dish Network (DISH)
Western Union (WU)
Marsh & McLennan (MMC)
Schering Plough (SGP)
Burlington Northern (BNI)
Activision (ATVI)
Cigna (CI)
Monsanto (MON)
Advanced Micro Devices (AMD)


Top 20 Holdings (by % of portfolio)

1. CVS Caremark (CVS): 4.25% of the portfolio
2. Raytheon (RTN): 4.17% of the portfolio
3. Qualcomm (QCOM): 3.85% of the portfolio
4. Amgen (AMGN): 3.7% of the portfolio
5. Apple (AAPL): 3.37% of the portfolio
6. XTO Energy (XTO): 3.13% of the portfolio
7. Gilead Sciences (GILD): 2.84% of the portfolio
8. Staples (SPLS): 2.56% of the portfolio
9. Research in Motion (RIMM): 2.5% of the portfolio
10. Apollo Group (APOL): 2.5% of the portfolio
11. Baxter International (BAX): 2.4% of the portfolio
12. Marvell Technology (MRVL): 2.4% of the portfolio
13. Fidelity Information (FIS): 2.4% of the portfolio
14. Liberty Media (LMDIA): 2.37% of the portfolio
15. DirecTV (DTV): 2.35% of the portfolio
16. Wyeth (WYE): 2.34% of the portfolio
17. Carnival (CCL): 2.25% of the portfolio
18. America Movil (AMX): 2.21% of the portfolio
19. Berkshire Hathaway (BRK-A): 2.11% of the portfolio
20. Priceline (PCLN): 2.1% of the portfolio

Right from the start we notice common holdings with that of other Tiger Cub hedge funds. Apollo Group, America Movil, Qualcomm, and Carnival are all favorites of these various funds. And, its no surprise really, as they all come from the same school of thought. And, undoubtedly, they all stay in touch. Its also worth noting that they started new positions in some names and brought them up in size to the top 20 holdings. Some of these include Carnival, Qualcomm, and Staples. Other than that, they were doing a lot of selling across the board. Assets from the collective long US equity, options, and note holdings were $8.2 billion last quarter and were down to $4.8 billion this quarter. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered Paulson & Co (John Paulson), Carl Icahn, Warren Buffett, Stephen Mandel's Lone Pine Capital, George Soros, Bill Ackman's Pershing Square, Andreas Halvorsen's Viking Global, Timothy Barakett's Atticus Capital, David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, Peter Thiel's Clarium Capital, Bret Barakett's Tremblant Capital, David Stemerman's Conatus Capital, and James Pallotta's Raptor Capital Management. Look for our updates as we will be covering a new fund each day.

Hedge Fund Tracking: Lee Ainslie's Maverick Capital - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamd 'Tiger Cubs') learned from the best and have had great success running their own funds. Some contacts over at Maverick have explained that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector.

They try to hedge their positions like the name hedge fund implies by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

As we noted in our October hedge fund performance numbers update, one of Maverick's funds was -6.34% in October and is now -26.47% year-to-date. (You can check out their most recent investor letter). We suggest checking out Maverick's 2nd quarter '08 portfolio holdings so you can get a sense as to how they were shifting around their portfolio recently. Also, we recently noted that Maverick recently sold out of their entire Under Armour (UA) position via a 13G filing.

So, now that we've got a background on Ainslie and Maverick, let's take a quick look at his portfolio highlights. We'd like to give a special thank you to Alex Prywes who has helped us with the 13f analysis so that we can cover more funds.

The following were Maverick's long equity and options holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Maverick initiated in the last quarter):
Apollo Group (APOL)
Amgen (AMGN)
Priceline (PCLN)
XTO Energy (XTO)
Activision Blizzard (ATVI)
Schering Plough (SGP)
Devry (DV)
HanesBrands (HBI)
Lender Processing (LPS)
BB&T (BBT)
Morgan Stanley (MS)
M&T Bank (MTB)
Yingli Green Energy (YGE)
Goldman Sachs (GS)
Freeport McMoran (FCX)
Las Vegas Sands (LVS)
J Crew (JCG)
Hudson City Bancorp (HCBK)
SalesForce (CRM)
Zale Corp (ZLC)
Nutrisystem (NTRI)
Sealy (ZZ)
Fortress Investment Group (FIG)
Hancock Holding Co (HBHC)
Bancorp Southern (BCSO)
Washing Mutual (WM)
Susquehanna Bancshares (SUSQ)


Added to (Positions Maverick already owned but added more shares)
Citizens Republic Bancorp (CRBC): Increased position by 293%
Berkshire Hathaway (BRK.B): Increased position by 112%
MSCI Inc (MXB): Increased position by 87%
Southern Financial Group (AFN): Increased position by 80%
Universal American Corp (UAM): Increased position by 58.5%
Marvell (MRVL): Increased position by 45%
Cigna (CI): Increased position by 43%
Netapp (NTAP): Increased position by 35%
Cognizant Tech (CTSH): Increased position by 33%
GMarket (GMKT): Increased position by 27%
First Solar (FSLR): Increased position by 22%
Lorillard (LO): Increased position by 21%
Dish Network (DISH): Increased position by 20%
MetroPCS (PCS): Increased position by 19%
CVS Caremark (CVS): Increased position by 14%
AthenaHealth (ATHN): Increased position by 12.7%
Leap Wireless (LEAP): Increased position by 12%
Textron (TXT): Increased position by 9.9%
Monsanto (MON): Increased position by 7%
Digital River (DRIV): Increased position by 4.6%
Thermo Fisher Scientific (TMO): Increased position by 3.8%
Gilead Sciences (GILD): Increased position by 1.3%
Berkshire Hathaway (BRK.A): Increased position by 0.16%
Cypress Biosciences (CYPB): Increased position by 0.05%


Reduced Positions (Positions Maverick sold some shares of)
Cardinal Health (CAH): Reduced by 55%
Covidien (COV): Reduced by 54%
Western Union (WU): Reduced by 51%
National City (NCC): Reduced by 51%
Marsh & Mclennan (MMC): Reduced by 44.7%
Potash (POT): Reduced by 44%
Baxter (BAX): Reduced by 36%
Burlington Northern (BNI): Reduced by 35%
Advanced Micro Devices (AMD): Reduced by 34%
America Movil (AMX): Reduced by 29%
Under Armour (UA): Reduced by 29% - Note: They have since sold off their entire position
DirecTV (DTV): Reduced by 28%
Dicks Sporting Goods (DKS): Reduced by 25%
Trubion Pharmaceuticals (TRBN): Reduced by 22%
Infinera (INFN): Reduced by 9.7%
Wyeth (WYE): Reduced by 9.6%
Home Inns & Hotels (HMIN): Reduced by 9.4%
Resmed (RMD): Reduced by 9%
Palm (PALM): Reduced by 7.8%
Citrix (CTXS): Reduced by 7.2%
Liberty Media (LMDIA): Reduced by 5.6%
Apple (AAPL): Reduced by 4.8%
Raytheon (RTN): Reduced by 3%
Fidelity National Info (FIS): Reduced by 2.9%
Comscore (SCOR): Reduced by 2.7%
Research in Motion (RIMM): Reduced by 2.2%


Positions with no change
Lamar Advertising (LAMR)
VMWare (VMW)
Newstar Financial (NEWS)
BPW Acquisition (BPW)
First Advantage Corp (FADV)
Bluefly (BFLY)
First Marblehead (FMHD)
Ultra Clean Holdings (UCTT)
Vivus Inc (VVUS)


Removed Positions (Positions Maverick sold out of completely)
American Capital Strategies (ACAS)
Amylin Pharma (AMLN)
Avon Products (AVP)
Bank of New York Mellon (BK)
China Nepstar (NPD)
Corcept Therapeutics (CORT)
Discovery Holdings (DISCA)
Forest Labs (FRX)
Gamestop (GME)
Genentech (DNA)
Google (GOOG)
Hansen Natural (HANS)
ITT Educational (ESI)
JP Morgan Chase (JPM)
Lexmark (LXK)
Lumber Liquidators (LL)
Macys (M)
Mylan (MYL)
Nordstrom (JWN)
Polo Ralph Lauren (RL)
Sohu (SOHU)
Suntrust Banks (STI)
Viacom (VIA)
Visa (V)
Zimmer Holdings (ZMH)


Top 20 Holdings (by % of portfolio)

1. Lorillard (LO): 3.98% of portfolio
2. Apple (AAPL): 3.58% of portfolio
3. First Solar (FSLR): 3.38% of portfolio
4. America Movil (AMX): 3.29% of portfolio
5. Raytheon (RTN): 3.22% of portfolio
6. Marvell (MRVL): 3.2% of portfolio
7. Apollo Group (APOL): 3.19% of portfolio
8. Research in Motion (RIMM): 3.16% of portfolio
9. Amgen (AMGN): 3.15% of portfolio
10. Gilead (GILD): 2.8% of portfolio
11. Netapp (NTAP): 2.79% of portfolio
12. CVS Caremark (CVS): 2.76% of portfolio
13. Baxter (BAX): 2.54% of portfolio
14. Citrix (CTXS): 2.38% of portfolio
15. Thermo Fisher Scientific (TMO): 2.33% of portfolio
16. Advanced Micro Devices (AMD): 2.3% of portfolio
17. Liberty Media (LMDIA): 2.09% of portfolio
18. Monsanto (MON): 1.9% of portfolio
19. Priceline (PCLN): 1.85% of portfolio
20. XTO Energy (XTO): 1.79% of portfolio

This is the fifth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Ainslie & Maverick:
- October Hedge Fund Performance numbers
- Maverick's recent Investor Letter
- Maverick's 2nd quarter '08 portfolio holdings & 13f analysis
- Ainslie's Maverick Capital sells entire Under Armour (UA) stake
- 'Tiger Cub' hedge fund panel
- Julian Robertson (Ainslie's mentor) reveals some recent buys

Lee Ainslie's Maverick Capital Sells Entire Under Armour (UA) Stake - 13G Filing

In a 13G filing made with the SEC after the close today, hedge fund Maverick Capital has sold off their entire position in Under Armour (UA).  Maverick Capital is a $10 billion hedge fund ran by the notoriously great stock picker Lee Ainslie.  The filing shows that the transactions were completed as of October 31st, 2008.  Previously, Maverick owned 3,629,460 shares, around a 10% stake in the company, as was detailed in their last 13F filing.

Maverick's performance this year has definitely been sub-par by their standards.  Their Maverick Fund was -6.34% for October and is now -26.47% year-to-date.  You can check out their most recent investor letter here and learn more about Maverick and their portfolio holdings here.  Their updated portfolio will soon be available with the release of the next 13F filing with the SEC here in the next week or two.  So, make sure you keep an eye out at MarketFolly.com for that.  It will be interesting to see what else Maverick has been busy doing besides dumping all of their UA.

Taken from Google Finance, Under Armour (UA) is "engaged in the design, development, marketing and distribution of branded performance products for men, women and youth. The Company designs and sells an offering of apparel and accessories that utilize a variety of synthetic microfiber fabrications. Its active wear and sports apparel, footwear and accessories are designed to wick perspiration away from the skin, help regulate body temperature, enhance comfort and mobility and improve performance regardless of weather condition."

Julian Robertson Reveals Some Buys

Monday (10/13) on CNBC, Julian Robertson, legendary investor and founder of notable hedge fund Tiger Management revealed some purchases he made in the market carnage last week. His buys included:

• Apple (AAPL)
• Microsoft (MSFT)
• Baidu (BIDU)
• Mastercard (MA)
• Visa (V)
• Ryan Air Holdings (RYAAY)

His argument, being a notable value player, was that these equities were trading at very favorable prices. Yet, at the same time, he curiously noted that he thought the US was just now entering into a period of prolonged recession (possibly 10-15 years). He thinks that this time around, consumers are broke and will be forced to cut their spending. Interesting thoughts when you compare them to the purchases he just made.

And, it seems that Robertson is fond of some of his progeny's favorite stocks as well. Robertson is well known for the 'descendants' that left Tiger Management to start their own firms. Many of Julian's "offspring" (referred to as Tiger Cubs) whom we track here at Market Folly, have had large positions in AAPL, BIDU, MA, and V as disclosed in various 13F quarterly filings. Notable Tiger Cubs include Lee Ainslie at Maverick Capital, Stephen Mandel at Lone Pine Capital, and John Griffin at Blue Ridge Capital. As of the last disclosures, AAPL was Maverick's top portfolio holding. Blue Ridge also held AAPL as their 4th largest portfolio holding. We track all these funds (and more) through the most recent 13F filings with the SEC and you can view Maverick's portfolio here, Lone Pine's portfolio here, and Blue Ridge's portfolio here.

Affluential Hedge Funds Suffer in September

Oh how the mighty have stumbled. In a market where everyone is feeling the heat, even the well-respected, historical top performers are now finding it rough out there. We recently got some performance updates from numerous iconic hedge funds and found out that September was not kind to them. Let's take a look at some of the information.

• Moore Capital Management, a group of global macro hedge funds ran by notable risk manager Louis Bacon has seen three of its funds 'stumble' in the recent weeks, coming in -5% in September. You can view Moore Capital's equity portfolio holdings here.
• Maverick Capital, a $10 billion hedge fund ran by Lee Ainslie was -19.5% in the month of September alone and is now -21.2% year-to-date. As you can see, they were actually holding up pretty well all year until September hit them hard. Oh how one month can change things. Maverick's levered fund was -35.5% for the month of September. You can check out Maverick's most recent portfolio holdings here.
• Third Point Offshore, a fund ran by notable activist Daniel Loeb's Third Point LLC was -11% for the month of September and is now -18.4% for the year. You can check out some of Third Point's most recent holdings here.
• Paul Tudor Jones' Raptor Fund (Tudor Investment Corp) was -2% in the month of September and is now -12% year-to-date. Although Tudor employs a global macro strategy, the Raptor Fund is their equities fund. The Raptor Fund is currently run by James Pallotta; but, as I wrote about earlier, Pallotta is leaving Tudor to start his own equities fund. And, you can view Tudor Investment Corp's most recent equity holdings here.
• Greenlight Capital, the hedge fund run by David Einhorn, was -12.8% in September and is -16.4% for the year. You can check out some of Einhorn's portfolio holdings here.
• Lone Pine Capital, another 'tiger cub' fund managed by Stephen Mandel saw its Lone Cyprus fund -14.7% in September. That fund is -26.5% for the year. You can check out Lone Pine's recent activity here and portfolio holdings here.
• Timothy Barakett's Atticus Capital woes continue. His Atticus European Fund was -15.8% percent in September and his Atticus Global Fund -2.8% in September. Atticus European is now -42.5% for the year and Atticus Global is -27.2% for the year. You can view Atticus' most recent SEC filings disclosing their portfolio holdings here.
• Jeffrey Gendell's Tontine Partners wer -59.30% in September and are now -66.7% for the year... unreal. Here are Tontine's most recent portfolio holdings.
• Bret Barakett, brother of Atticus' Timothy Barakett, is also feeling the pain. His Tremblant Capital was -19.3% for the month of September and is -28% for the year. You can check out Tremblant's recent activity here and their portfolio holdings here.
• Shumway Capital's levered fund was -16% for September, and their Ocean fund was -8.6% for the month and is now -9% year-to-date. (Yet another case of one month doing extreme damage to a fund).
  
• Chris Coleman's Tiger Global was -14.3% for September and is now -13.7% for the year.
• Stephen Cohen's SAC Capital Multi-strat fund was -10.7% for September.
• Farallon Capital Management was -10.5% for the month of September.
• David Stemerman's Conatus Capital was -10.4% for September and is -8.10% year-to-date. Stemerman recently left Lone Pine Capital (referenced above) to start his own fund, which I wrote about here.
• Jana Partners was -9% for September and is -14.7% for the year
• Andreas Halvorsen's Viking Global, who I will be profiling next week, was -7.9% for September and is 0.30% for the year. (Wow, a fund that is actually still UP on the year).
• Bill Ackman's Pershing Square was 0.10% for the month of September and finds himself 1.9% for the year. (Another fund actually UP on the year).
• Ken Griffin has been hit hard as well. Citadel Capital's flagship fund was -15% for September and -18% for the year. The fund has lost around $2 billion.
  

So, don't feel so bad if your portfolio is underwater because even those regarded as 'some of the best in the game' are finding this market troublesome. No one is invincible in this environment.

Well, almost no one. John Paulson certainly could argue that he is invincible. Paulson runs Paulson & Co and is famous for making a fortune by betting against sub-prime when this whole mess began to unfold. And, it appears as if Paulson is still up to his fortune-making ways. One of his funds has generated a 589% return, which could easily be up there amongst the largest returns by a single hedge fund in a year. Paulson's Advantage Plus fund has returned 19.44% year-to-date as of the end of August. This is the same fund that gained 158% the year prior and has grown to almost $9 billion. And, that's not all. Paulson has multiple funds performing well in this environment. Taken from DealJournal,

"Paulson’s Advantage fund was up 13.22% for the year to the end of August, having made 100.15% last year. Its Credit Opportunities fund was up 12.95%, having made 351.72% last year; its Credit Opportunities fund was up 12.46%, having made 589.62% last year; its Enhanced fund was up 8.17%, having made 116.48% last year; and its International fund was up 5.17%, having made 51.7% last year. Paulson turned a $500m investment in its Credit Opportunities fund into $3.5bn over the course of last year, considered by investment consultants and investors the largest dollar amount ever generated by a hedge fund in a year."

After making a fortune by betting against sub-prime, Paulson has turned his focus to shorting UK banks. Paulson is on quite a roll and we'll keep an eye on his performance over the next year and see if he can hit a home run three years running.

Overall though, this has been the worst year for hedge funds in quite some time. As evidenced above, even some of the historically brightest managers in the game are stumbling a bit. And, undoubtedly, such struggles will lead to investor redemptions and continued deleveraging.


For more information and background on some of the iconic hedge funds mentioned above, head over to my posts on hedge fund manager interviews and Alpha's hedge fund rankings.




Sources: Anonymous investors in various funds, NYT , Bloomberg, FT, & WSJ DealJournal

Hedge Fund Tracking: Maverick Capital's 13F (Lee Ainslie)

(Note: Before reading this update, make sure you check out the preface to the series I'm doing on Hedge Fund 13F's here).

Here we are with another week of the Hedge Fund tracking series. If you've missed them, I've already covered Jeffrey Gendell's Tontine Partners here, Bret Barakett's Tremblant Capital here, Peter Thiel's Clarium Capital here, Stephen Mandel's Lone Pine Capital here, and John Griffin's Blue Ridge Capital here. Next up, we have Lee Ainslie's Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers I've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. So, due to the fact that these proteges learned from the best and have had great success running their own funds, I continually try to find a reason not to follow these funds. And, needless to say I'm never successful. Some contacts over at Maverick have explained that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector. They try to hedge their positions like a true hedge fund by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

So, now that we've got a little background on Maverick, let's see what they were up to. Once again, I'd like to give thanks to Alex Prywes for helping me gather and sort through the data of numerous hedge funds (including the one below). Thanks to Alex's help, we can now cover even more funds. And, on that note.... onto the 13F! The following are Maverick Capital's current holdings as of June 30th 2008, as released in their most recent 13F filing with the SEC. The positions in this most recent 13F were compared to last quarter's 13F and here are the changes made to their portfolio:

New Positions:
First Solar (FSLR): 1,202,118 shares. This position is 2.93% of Maverick's portfolio.
Lorillard (LO): 3,820,856 shares. This position is 2.36% of Maverick's portfolio.
CVS Caremark (CVS): 5,912,073 shares. This position is 2.09% of Maverick's portfolio.
Netapp (NTAP): 9,331,862 shares. This position is 1.81% of Maverick's portfolio.
ITT Educational Services (ESI): 2,422,090 shares. This position is 1.79% of Maverick's portfolio.
Macy's (M): 9,008,174 shares. This position is 1.56% of Maverick's portfolio.
Hansen Natural (HANS): 5,712,952 shares. This position is 1.47% of Maverick's portfolio.
Polo Ralph Lauren (RL): 2,431,244 shares. This position is 1.36% of Maverick's portfolio.
Dicks Sporting Goods (DKS): 7,589,473 shares. This position is 1.20% of Maverick's portfolio.
Cigna Corp (CI): 2,931,045 shares. This position is 0.93% of Maverick's portfolio.
Digital River Inc (DRIV): 1,974,144 shares. This position is 0.68% of Maverick's portfolio.
Viacom Inc (VIA): 2,442,500 shares. This position is 0.67% of Maverick's portfolio.
Forest Labs (FRX): 1,789,900 shares. This position is 0.56% of Maverick's portfolio.
Lamar Advertising (LAMR): 1,542,918 shares. This position is 0.50% of Maverick's portfolio.
Visa (V): 565,005 shares. This position is 0.41% of Maverick's portfolio.
South Financial Group (TSFG): 50,000 shares. This position is 0.38% of Maverick's portfolio.
Athena Health (ATHN): 1,245,819 shares. This position is 0.34% of Maverick's portfolio.
National City Corp (NCC): 6,625,176 shares. This position is 0.28% of Maverick's portfolio.
Sohu.com Inc (SOHU): 170,485 shares. This position is 0.11% of Maverick's portfolio.
MSCI Inc (MXB): 287,186 shares. This position is 0.09% of Maverick's portfolio.
Universal American (UAM): 1,004,391 shares. This position is 0.09% of Maverick's portfolio.
Comscore (SCOR): 436,640 shares. This position is 0.09% of Maverick's portfolio.
Citizens Republic Bancorp (CRBC): 937,500 shares. This position is 0.02% of Maverick's portfolio.


Added to:
Berkshire Hathaway (BRK.B): Increased position by 1412%. Position is now 0.45% of their portfolio.
Gmarket (GMKT): Increased position by 317%. Position is now 0.19% of their portfolio.
Infinera (INFN): Increased position by 171%. Position is now 0.54% of their portfolio.
American Capital (ACAS): Increased position by 141%. Position is now 0.30% of their portfolio.
Nordstrom (JWN): Increased position by 136.61%. Position is now 2.79% of their portfolio.
America Movil (AMX): Increased position by 129.88%. Position is now 3.91% of their portfolio.
Lexmark (LXK): Increased position by 109.39%. Position is now 1.42% of their portfolio.
Citrix (CTXS): Increased position by 109.36%. Position is now 2.20% of their portfolio.
Bank of New York Mellon (BK): Increased position by 55.42%. Position is now 3.15% of their portfolio.
Baxter Intl (BAX): Increased position by 51.69%. Position is now 2.90% of their portfolio.
Advanced Micro Devices (AMD): Increased position by 45.89%. Position is now 2.87% of their portfolio.
Raytheon (RTN): Increased position by 41.72%. Position is now 2.58% of their portfolio.
Fidelity National Info (FIS): Increased position by 40.56%. Position is now 2.05% of their portfolio.
Covidien (COV): Increased position by 32.99%. Position is now 2.32% of their portfolio.
Liberty Media Corp (LMDIA): Increased position by 28.09%. Position is now 1.59% of their portfolio.
Resmed (RMD): Increased position by 26.46%. Position is now 0.74% of their portfolio.
Burlington Northern (BNI): Increased position by 22.73%. Position is now 1.83% of their portfolio.
Google (GOOG): Increased position by 22.27%. Position is now 1.72% of their portfolio.
Genentech (DNA): Increased position by 21.38%. Position is now 1.40% of their portfolio.
Zimmer Holdings (ZMH): Increased position by 20.28%. Position is now 1.73% of their portfolio.
Cypress Bioscience (CYPB): Increased position by 19.98%. Position is now 0.20% of their portfolio.
Apple (AAPL): Increased position by 19.45%. Position is now 4.09% of their portfolio.
Research in Motion (RIMM): Increased position by 15.41%. Position is now 4.08% of their portfolio.
MetroPCS Comm (PCS): Increased position by 13.6%. Position is now 0.77% of their portfolio.
Home Inns & Hotels (HMIN): Increased position by 7.72%. Position is now 0.54% of their portfolio.
Gilead Sciences (GILD): Increased position by 6.66%. Position is now 2.37% of their portfolio.
Marvell Technology (MRVL): Increased position by 5.24%. Position is now 3.08% of their portfolio.
Newstar Financial (NEWS): Increased position by 5.21%. Position is now 0.14% of their portfolio.
Cardinal Health (CAH): Increased position by 3.33%. Position is now 1.56% of their portfolio.
Amylin Pharma (AMLN): Increased position by 2.84%. Position is now 0.58% of their portfolio.
Discovery Holding (DISCA): Increased position by 1.74%. Position is now 1.21% of their portfolio.
Palm (PALM): Increased position by 1.40%. Position is now 0.51% of their portfolio.
Lumber Liquidators (LL): Increased position by 1.14%. Position is now 0.26% of their portfolio.
China Nepstar (NPD): Increased position by 0.75%. Position is now 0.18% of their portfolio.
First Advantage (FADV): Increased position by 0.65%. Position is now 0.15% of their portfolio.
Under Armour (UA): Increased position by 0.17%. Position is now 0.83% of their portfolio.
Mylan Inc (MYL): Increased position by 0.06%. Position is now 1.09% of their portfolio.
Monsanto (MON): Increased position by 0.04%. Position is now 1.68% of their portfolio.
Potash (POT): Increased position by 0.03%. Position is now 2% of their portfolio.


Reduced positions:
Thermo Fisher (TMO): Reduced their position by 4.91%. Position is now 1.68% of their portfolio.
Western Union (WU): Reduced their position by 10.2%. Position is now 2.08% of their portfolio.
Marsh & Mclennan (MMC): Reduced their position by 12%. Position is now 1.55% of their portfolio.
Textron Inc (TXT): Reduced their position by 18.93%. Position is now 1.44% of their portfolio.
Wyeth (WYE): Reduced their position by 20.6%. Position is now 1.46% of their portfolio.
Leap Wireless (LEAP): Reduced their position by 23.40%. Position is now 0.39% of their portfolio.
Trubion Pharma (TRBN): Reduced their position by 24.38%. Position is now 0.04% of their portfolio.
Dish Network (DISH): Reduced their position by 27.75%. Position is now 1.13% of their portfolio.
Avon Products (AVP): Reduced their position by 33.23%. Position is now 1.36% of their portfolio.
JP Morgan Chase (JPM): Reduced their position by 38.68%. Position is now 0.89% of their portfolio.
Cognizant (CTSH): Reduced their position by 42.97%. Position is now 0.85% of their portfolio.
DirecTV (DTV): Reduced their position by 49.69%. Position is now 0.83% of their portfolio.
Suntrust Banks (STI): Reduced their position by 50%. Position is now 0.16% of their portfolio.
Gamestop (GME): Reduced their position by 51.64%. Position is now 0.81% of their portfolio.
Corcept (CORT): Reduced their position by 57.49%. Position is now 0.01% of their portfolio.
Bluefly (BFLY): Reduced their position by 90%. Position is now 0.11% of their portfolio.
Berkshire Hathaway (BRK.A): Reduced their position by 95%. Position is now 0.66% of their portfolio.


Removed Positions (Positions Maverick sold out of completely):
Hanesbrands (HBI)
Autozone (AZO)
Bankrate (RATE)
CNET (CNET)
Crocs (CROX)
Cumulus Media (CMLS)
Harmonic (HLIT)
Loews (L)
Move Inc (MOVE)
Nucor (NUE)
OfficeMax (OMX)
Qualcomm (QCOM)
Salesforce (CRM)
Sandisk (SNDK)
Sears (SHLD)
Starbucks (SBUX)
UnitedHealth (UNH)


Positions with no change:
VMWare (VMW). Position is 0.59% of their portfolio.
BPW Acquisition (BPW). Position is 0.18% of their portfolio.
FIrst Marblehead (FMD). Position is 0.05% of their portfolio.
Ultra Clean Holdings (UCTT). Position is 0.01% of their portfolio.
Vivus (VVUS). Position is 0.01% of their portfolio.


Top 20 holdings by % of portfolio:
1. Apple (AAPL): 4.09% of the portfolio
2. Research in Motion (RIMM): 4.08% of the portfolio
3. America Movil (AMX): 3.91% of the portfolio
4. Bank of New York Mellon (BK): 3.15% of the portfolio
5. Marvell Tech (MRVL): 3.08% of the portfolio
6. First Solar (FSLR): 2.93% of the portfolio
7. Baxter Intl (BAX): 2.90% of the portfolio
8. Advanced Micro (AMD): 2.87% of the portfolio
9. Nordstrom (JWN): 2.79% of the portfolio
10. Raytheon (RTN): 2.58% of the portfolio
11. Gilead (GILD): 2.37% of the portfolio
12. Lorillard (LO): 2.36% of the portfolio
13. Covidien (COV): 2.32% of the portfolio
14. Citrix (CTXS): 2.20% of the portfolio
15. CVS Caremark (CVS): 2.09% of the portfolio
16. Western Union (WU): 2.08% of the portfolio
17. Fidelity National Info (FIS): 2.05% of the portfolio
18. Potash (POT): 2.00% of the portfolio
19. Burlington Northern (BNI): 1.83% of the portfolio
20. Netapp (NTAP): 1.81% of the portfolio

----------------------------------------------------

Breakdown: Maverick changed up their portfolio a decent amount over the past quarter. Most notable are their changes within their top 10 holdings. Hedge fund favorite Qualcomm (QCOM) was Maverick's 3rd largest holding last filing. This filing, they no longer even hold a position. Additionally, they were selling off chunks of other top 10 holdings from last quarter. They sold off 33% of their position in Avon Products (AVP), which was their 4th largest holding just one quarter ago. They also sold over 51% of their Gamestop (GME) position, which last quarter was their 7th largest holding. With those positions vacating their place in the top 10 holdings of Maverick's portfolio, new holdings obviously took their place. America Movil (AMX), another hedge fund favorite, was Maverick's 9th largest holding last time. This time, they increased their position by 129% and it is now their 3rd largest holding. They obviously used the weakness in this name to add to their position, just like fellow 'Tiger Cub' fund Lone Pine Capital, as I wrote about here. Maverick also added heavily to Nordstrom (JWN), increasing their position by 136% and making it now their 9th largest holding.

Maverick was out adding to tech across the board. Apple (AAPL) and Research in Motion (RIMM) are their top 2 largest holdings respectively, as they boosted their positions in both by over 14% each. Additionally, they added to their Marvell (MRVL) position, bringing it up to the fund's 5th largest position now. Maverick also continues to build a position in Advanced Micro Devices (AMD), as it now is their 8th largest holding.

Among their new positions this quarter are First Solar (FSLR), Lorillard (LO), and CVS Caremark (CVS). I highlight these three in particular because Maverick started large, new positions in all three names. First Solar (FSLR) was brought up all the way to the fund's 6th largest holding after not even owning shares last quarter. They started a new position in CVS Caremark (CVS) and brought it up to the fund's 15th largest holding. Also, they added heavily to Lorillard (LO) as well, making this new position their 12th largest holding. This position is interesting because we also saw Lone Pine Capital (ran by Stephen Mandel Jr.) start a new position in this exact same name, as I wrote about here. And, actually, this is not the only position that both Maverick and Lone Pine both started together. In this 13F filing, we see that Maverick started a position in Hansen Natural (HANS). And, as I wrote about here, Lone Pine recently disclosed that they have a 7.8% stake in HANS. It's definitely common to see many similar positions within the portfolios of various 'Tiger Cub' managers who now run their own funds because they all undoubtedly keep in touch and come from the same school of thought.

One last thing I would like to point out is Maverick selling completely out of various consumer related names. They sold completely out of their positions in Autozone (AZO), Hanesbrands (HBI), Sears (SHLD), Starbucks (SBUX), Crocs (CROX), and OfficeMax (OMX).

You can view their most recent 13F as filed with the SEC here.

Check back each day this week as my 13F tracking series continues. Funds I will be covering this week include: Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, Boone Pickens' BP Capital, and Timothy Barakett's Atticus Capital.

Maverick Capital's 13F (Lee Ainslie)

(Note: Before reading this update, make sure you check out the preface to the series I'm doing on Hedge Fund 13F's here )

Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion, so you can already see the track record he's established. Ainslie, like many of the other fund managers I've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. So, due to the fact that these proteges learned from the best and have had great success running their own funds, I continually try to find a reason NOT to follow these funds. And, needless to say I'm never successful. Time to learn from the greats! Some of my contacts over at Maverick have explained to me that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector. They try to hedge their positions like a true hedge fund by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. So, now that we've got a little background on Maverick, let's see what they were up to. Rumor has it that they had a poor start to the year, and they were definitely out switching things up in mass in their portfolio.

New Positions: (in no particular order)
American Capital Strategies (ACAS) 581,590 shares
Bankrate (RATE) 100,100 shares
BonTon Stores (BONT) 57,000 shares
BPW Acquisitions (BPW) 2,000,000 shares
Citrix Systems (CTXS) 4,007,280 shares
Crocs (CROX) 515,389 shares
Discovery Holdings (DISCA) 6,063,297 shares
Dish Network (DISH) 5,977,630 shares
Infinera (INFN) 2,524,117 shares
JPMorgan Chase (JPM) 4,745,330 shares
Liberty Media Corp (LMDIA) 5,726,736 shares
Loews (LTR) 2,297,358 shares
Nordstrom (JWN) 4,386,874 shares
Sears (SHLD) 848,724 shares
Starbucks (SBUX) 12,512,559 shares
Wyeth (WYE) 4,282,850 shares

Added to:
Advanced Micro Devices (AMD) increased by 12% (3,956,220 more shares)
Amylin (AMLN) increased by 28% (544,550 more shares)
Apple (AAPL) increased by 3.6% (80,965 more shares)
Autozone (AZO) increased by 99.8% (1,005,200 more shares)
Avon Products (AVP) increased by 82% (2,863,320 more shares)
Bank NY Mellon (BK) increased by 24% (1,174,155 more shares)
Baxter (BAX) increased by 38.5% (930,840 more shares)
Burlington Northern (BNI) increased by 151% (1,007,490 more shares)
Cardinal Health (CAH) increased by 12% (350,230 more shares)
China Nepstar Chain Drugstores (NPD) increased by 68.5% (960,605 more shares)
Cognizant (CTSH) increased by 3.6% (181,168 more shares)
Covidien (COV) increased by 57% (1,483,210 more shares)
Cypress Bioscience (CYPB) increased by 123% (1,458,064 more shares)
Direct TV (DTV) increased by 25% (1,438,140 more shares)
Fidelity National Info (FIS) increased by 41% (1,286,091 more shares)
Google (GOOG) increased by 49% (98,722 more shares)
Hanes Brands (HBI) increased by 37% (896,563 more shares)
Home Inns & Hotel Mgmt (HMIN) increased by 28% (633,753 more shares)
Leap Wireless (LEAP) increased by 19.5% (217,011 more shares)
Lumber Liquidators (LL) increased by 7% (147,720 more shares)
Marsh & McLennan (MMC) increased by 13.6% (888,850 more shares)
MetroPCS (PCS) increased by 32% (1,032,857 more shares)
Mylan (MYL) increased by 52% (3,463,006 more shares)
Nucor (NUE) increased by 19% (307,337 more shares)
Research in Motion (RIMM) increased by 179% (2,174,226 more shares)
Resmed (RMD) increased by 11% (186,168 more shares)
Salesforce (CRM) increased by 63% (818,010 more shares)
Sandisk (SNDK) increased by 7% (399,180 more shares)
Textron (TXT) increased by 31% (988,240 more shares)
UnderArmour (UA) increased by 81% (1,622,662 more shares)
United Health (UNH) increased by 31% (832,673 more shares)
VMWare (VMW) increased by 5% (60,000 more shares)
Zimmer Holdings (ZMH) increased by 36% (623,610 more shares)


Reduced Positions:
America Movil (AMX) reduced by 34.5% (1,907,040 less shares)
Berkshire Hathaway A (BRK.A) reduced by 43.5% (635 less shares)
Berkshire Hathaway B (BRK.B) reduced by 22.8% (3,687 less shares)
Corcept (CORT) reduced by 8.5% (128,480 less shares)
Cumulus Media (CMLS) reduced by 21% (526,311 less shares)
Gamestop (GME) reduced by 14.6% (676,378 less shares)
Genentech (DNA) reduced by 9% (150,290 less shares)
Gmarket (GMKT) reduced by 56% (308,037 less shares)
Harmonic (HLIT) reduced by 10% (574,361 less shares)
Lexmark (LXK) reduced by 49% (2,161,513 less shares)
Marvell Tech (MRVL) reduced by 3% (551,916 less shares)
Monsanto (MON) reduced by 11% (190,570 less shares)
Office Max (OMX) reduced by 22% (1,464,249 less shares)
Potash (POT) reduced by 11% (123,790 less shares)
Qualcomm (QCOM) reduced by 37% (3,851,237 less shares)
Raytheon (RTN) reduced by 19% (861,290 less shares)
Suntrust (STI) reduced by 54% (1,194,028 less shares)
ThermoFisher Scientific (TMO) reduced by 33% (1,782,100 less shares)


Removed Positions:
Positions Maverick sold out of completely
Altria (MO)
Atheros Comm (ATHR)
Biogen Idec (BIIB)
Burger King (BKC)
Crown Castle (CCI)
CVS Caremark (CVS)
Digital River (DRIV)
Echostar (SATS)
Five Star Quality Care (FVE)
Guess (GES)
Healthnet (HNT)
Macys (M)
Men's Warehouse (MW)
Merck (MRK)
Omnicare (OCR)
Wellpoint (WLP)
Wyndham (WYN)
Yahoo (YHOO)


Positions with no change:
Bluefly (BFLY)
Cnet (CNET)
First Advantage Corp (FADV)
First Marblehead (FMD)
Gilead (GILD)
Move Inc (MOVE)
Newstar Financial (NEWS)
Palm (PALM)
Trubion Pharma (TRBN)
Ultra Clean Holdings (UCTT)
Vivus (VVUS)
Western Union (WU)


Top 10 Holdings by % of Portfolio:
1. RIMM (Top holding)
2. AAPL
3. QCOM
4. AVP
5. BK
6. GILD
7. GME
8. RTN
9. AMX
10. TXT



--------------------------------------------------------------

Breakdown: Alright, so right out of the gate the first thing I noticed was Maverick's heavy tech weighting, much like fellow Tiger Cub funds Lone Pine and Blue Ridge. Maverick's top 3 holdings are all tech in RIMM AAPL and QCOM. And, Maverick even reduced their QCOM position by almost 40% and its still the #3 holding. I'm sure given the big run tech has had lately (especially AAPL), that Maverick will show some profit taking next quarter in the next round of 13Fs. They just clearly loaded up on tech on the big dips, and they've profited quite handsomely from that play it seems. Ainslie added to Avon Products (AVP) by 82% and brought it up to the #4 fund holding, which is a strong move. Ainslie also added heavily to Autozone, increasing it by almost 100%, and bringing it to a notable 11th largest fund holding. Also, he added Bank New York Mellon by 24% and it sits at the fund's 5th largest holding. Maverick clearly wants to play the financial space through BK and then also JPM, which they also added as a brand new holding this go round. And, they added in mass too, with a whopping 4.7 million shares. Take a closer look at those two if you want financials exposure. Ainslie also started a pretty decent sized position in Citrix, who specialize in IT and the such. I would say they were trying to play the VMWare trade through the backdoor, but they already have VMW in the fund as well. Another new addition to the portfolio this go round was Wyeth, which they added a strong 4.2 million shares of. Also, it seems like Ainslie added SBUX as well, buying on the dip when Schulz came back. We'll see if they still hold those shares in the next quarter.

In terms of further adding to positions they already owned, Maverick really loaded up on BNI, a whopping 151%. And, keep in mind, that stock has already made a monster move, so they weren't exactly getting those shares on the cheap. They clearly believe the move in the rails has more juice. They also added in mass to Cypres Bioscience by 123%, showing conviction in that buy as well. One play that they continue to quietly amass is satellite plays. DTV they increased by 25% and they've been building a position over time. They also started a brand new position in Dish Network, so they've got all their bases covered. I'll definitely be checking into that theme further as Maverick seems to firmly believe in it, despite a recession. They also added GOOG to their tech basket by 41%, but its still *not* a top 10 holding in the fund. Ainslie clearly prefers hardware in tech. They also continue to add to Mylan quarter after quarter (increased 52% this quarter), so that's one I'm keeping my eye on as well. One move I'm not so sure of is them adding to UA by 81%. I think this stock has real issues as they've lost their "mojo" after first storming onto the scene. We'll see how that plays out and see if they add even more shares in the quarters to come. Half the point in tracking these 13f's is to see where these funds are accumulating shares on a quarterly basis, so we can play catch-up with them and load up on positions ourselves that these funds strongly believe in. Some stocks they buy and sell and they are in and out. Others though, you can see them slowly adding each quarter, building core positions. Those are the ones you want to look for. Also, keep an eye out for sector trends (such as satellite tv in Maverick's case). They are clearly buying up all satellite players and must believe strongly in that space.

Turning to the reduced positions, I noticed that they've reduced their stakes in both BRK.A and BRK.B. Clearly they aren't seeing as much value in Buffett anymore. Or, maybe they were just freeing up cash. As, after all, if the rumors of Maverick's poor start to the year were true, then they needed to free up some cash to re-tool their portfolio. I mentioned earlier that they reduced their QCOM position by 37%, and yet it is still the 3rd largest fund holding. That amazed me; they've really bet big on this name. I attribute this sell to some profit taking and some freeing up cash to re-work the portfolio. After all, its still a massive holding and they've sold off more than a 3rd of the position. Raytheon (RTN) was also reduced by 19% and yet it is the fund's 8th largest holding. So, not a whole lot to worry about there either.

Maverick sold completely out of some of their bigger and longer term holdings in that of CVS Caremark and Burger King. They also sold out of Echostar (SATS) and it seems they prefer DTV and DISH in the satellite space. Actually, it looks like they swapped completely out of SATS and into DISH. Another semi-big holding they sold out of was Guess. Then some smaller holdings of fellow retailers Macys and Men's Warehouse were sold off as well. It seems that Maverick must have taken a real beating with all of these retailers and that probably played a large part in their rumored weak start to 2008. They've clearly admitted they were wrong on those and sold them off completely in search of better sectors. One removal I was confused about was Crown Castle, as their investment in the wireless tower industry seemed to be a smart one. But, now that they've sold out, its time to revisit that name and make sure nothing is fundamentally wrong with it. Maybe Maverick needed the cash after their bad beginning of the year, maybe they were taking profits in the name, who knows. But, I strongly believe that the wireless tower play was a smart one and I'm going to look into it deeper, as the future is obviously in wireless technology.

Not a whole lot to look at in terms of positions with no change. They kept their GILD position unchanged as the fund's 6th largest holding. They held their CNET as well, and I'm sure they've actually sold it off now that the stock has popped immensely on its takeover news. Like fellow Tiger Cub manager John Griffin at Blue Ridge, Ainslie and Maverick have a position in First Marblehead. Maverick didn't quite add in mass like Blue Ridge did... but then again maybe Blue Ridge was playing catch-up. As I've said earlier, there are usually some commonalities between the portfolios of all the ex-Tiger Management gang. They undoubtedly still keep in touch and share their good ideas and then swarm them in mass. So, identifying the names that all of the funds hold collectively could create quite a killer portfolio. I'll actually be developing a model portfolio later based on the consensus ex-Tiger Management funds (ie: a portfolio of stocks that appear in all 3 funds' portfolios: Maverick, Lone Pine, and Blue Ridge). Now that I've covered the 3 major proteges of Julian Robertson, I can sift through the data to find all the commonalities and create a mock modern day Julian Robertson-esque Tiger Management portfolio to track.

Personal Favorites out of Maverick's portfolio: AAPL QCOM GILD AMX BNI TMO POT AMLN MYL DTV RMD

Most interesting move(s): 1. Bringing Avon Products up to the #4 fund holding 2. Doubling down on Autozone and making it the #11 fund holding 3. Substituting DISH in place of SATS 4. Seemingly shifting out of most of their retail plays (including selling off their entire huge chunk of CVS) 5. Continuing to slowly build positions in RMD, DTV, and MYL

Note/ Of their positions, I'm long: AAPL QCOM GILD AMX TMO POT

Names I want to research further: CCI DTV DISH MYL RMD

Keep an eye out for continued hedge fund 13f tracking when I cover Greenlight Capital (David Einhorn), Atticus Capital (Timothy Barakett), and a few other big funds/whales.

Hedge Fund Activity / 13F

(Just FYI: This post marks the first of a series I will be doing this week that details what the "smart money" has been up to lately.)

Four times a year, hedge funds & asset managers with > $100 million AUM (assets under management) are required to report to the SEC their holdings from the previous quarter. I check these 13F filings quarterly just to get a sense as to where these funds are putting their money sector wise. If you just sit down and do some simple number crunching between last quarter's 13F and this quarter's 13F, you can see exactly where these funds have been moving their money.

Now, these 13F's should be treated as a lagging indicator simply because the 13F's that were just released May 15th 2008 show the funds' holdings as of March 31st 2008. So, in the past month and a half, they could have completely changed their portfolio. But, at the same time, its easy to see which sectors they are flocking to.

I like to specifically follow value based hedge funds in the hope that they won't experience ridiculously high turnover and thus allowing me to track their sector rotations. Specifically, I follow the Tiger Cubs (otherwise known as the proteges of former Tiger Management legend Julian Robertson). Many of these former proteges/right hand men have started their own funds and here are the ones I've been following:

- Blue Ridge Capital (John Griffin)
- Lone Pine Capital (Steve Mandel)
- Maverick Capital (Lee Ainslie)
- Viking Global (Andreas Halvorsen)

Additionally, I also like to follow the Commodities Corporation "offspring" which typically employ a global macro strategy.

- Tudor Investment Corp (Paul Tudor Jones)
- Moore Capital (Louis Bacon)
- Caxton Associates (Bruce Kovner)

So, I follow a core of value funds in depth and then I also follow a core of global macro funds in depth. Over the next week, I will be going into detail as to what those specific funds were up to this past quarter. Additionally, I like to follow other "whales" and funds that are not necessarily value based, but are still top performers on Wall Street. I won't be going into detail on some of these names, but I will provide some very useful links that give a broad overview of what some of these whales have been buying/selling. Because, after all, you've got to at least keep tabs on what these guys are doing:

- Warren Buffett (obviously)
- Carl Icahn (rabblerousing at its best)
- RBS Partners (Eddie Lampert)

Then, of course, there are some just straight up beastly funds which you have to keep an eye on due to their awesome returns over the years:

- Atticus Capital (Timothy Barakett)
- BP Capital (Boone Pickens)
- Greenlight Capital (David Einhorn)
- Paulson & Co (John Paulson)
- D.E. Shaw & Co (David E. Shaw)
- Jana Partners (Barry Rosenstein)

And, lastly, a few deep value & activist funds.

- Third Point (Daniel Loeb)
- Pershing Square (Bill Ackman)
- Okumus Capital (Ahmet Okumus)
- T2 Partners (Whitney Tilson)
- Tontine Partners (Jeffrey Gendell)

So, over the coming week I'll touch on some important position moves some of these funds/whales have made (new positions, removed positions, etc). And, specifically, I'll be looking in depth at some of my favorite funds on a quarter by quarter comparison. Here are the links to my in-depth analyses of said funds.

- Blue Ridge Capital
- Lone Pine Capital
- Maverick Capital
- BP Capital
- Atticus Capital