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.

John Griffin's Blue Ridge Capital Files 13G on Millipore (MIL)

According to a 13G filing made with the SEC on October 16th, Blue Ridge Capital ran by John Griffin has disclosed a 5.47% ownership stake in Millipore (MIL). Blue Ridge disclosed that they now own 3,020,000 shares of MIL as of October 6th. This is an increase from their position that they disclosed in their most recent 13F, which had revealed their positions as of June 30th. Back then, they owned 2,700,000 shares. Since then, they have accumulated 320,000 more shares to bring them to their current holding of a 5.47% ownership stake in MIL. You can see the rest of Blue Ridge's portfolio holdings here. Blue Ridge seeks absolute returns by investing in companies who dominate their industries and shorting the companies who have fundamental problems.

Taken from Google Finance, Millipore (MIL) is "a life science company that provides products, services and solutions. The Company’s academic, biotechnology, and pharmaceutical customers use its consumable products and services in laboratory applications and in biopharmaceutical manufacturing."

You can view the 13G as filed with the SEC here.

Starting a position in Millipore (MIL)

I had written back in my 13f hedge fund analysis of Blue Ridge Capital here that I thought it was interesting that they started a new position in MIL last quarter and brought it up all the way to the #4 fund holding. I was intrigued, so I started my research on the company. And, what do you know, we might have found a winner. Jeffrey McLarty had actually written about MIL here in his breakdown of the water etf PHO. And, although he didn't necessarily like MIL as a play on water, he said he was intrigued by the company itself and decided to revisit the name later.

I really wanted in this name, but it has had a big run over the past few months. So, now coming up on close to a 50% retracement of that move, its time to dip my toe in the water with 1/4th of my total position in MIL that i'll be assembling. I'm flagging this as a buying opportunity mainly because the chart sets up wonderfully here and as I said, its retraced some of its move. (Click the chart to enlarge it). But, besides that, if you look at the blue circles I have drawn on the chart you will see some commonalities. First, at the very top in the RSI. The RSI is in a current uptrend, making higher lows and higher highs, obviously bullish. Additionally, each drop of size in the RSI has signaled a buying opportunity. Secondly, looking at the second set of circles on the stock chart itself, we see that MIL has dipped to support and buying support is always a wise move. The first dip was obviously a double bottom, as signaled by the neon green line I've drawn in there around $65. This double bottom is also significant as it signals the place at which I would really like to load up on shares. And, it gives us a clean stop if we put it below that double bottom. Thirdly, moving down to the blue circles within the stochastics. You will see that each time the stochastics have crossed below 20 into oversold territory, it represents a buying opportunity. Combine all the above with the fact that MIL has completed almost a 50% retracement of its last major run, and you've got the combination for a great entry point.

So, with that said, I'm beginning my position in MIL with 1/4th of my position size here maybe slightly prematurely at $69.34. I'll be back with another post later as to why MIL makes a great investment in the first place. But, just wanted to get this on people's screens as I know some were interested in this name due to the fact that Blue Ridge Capital added it as a new holding, and added it with conviction. When Griffin brings a holding all the way up to the fund's 4th largest holding all in 1 quarter, you know he's up to something.