John Griffin’s Blue Ridge Capital has revealed its equity positions at the end of 2014, and the fund’s portfolio has undergone a number of notable changes. First and foremost are new positions in Facebook Inc (NASDAQ:FB) and Walgreens Boots Alliance Inc (NASDAQ:WBA), while it was one of several funds to be extremely bullish on Cheniere Energy, Inc. (NYSEAMEX:LNG) during the past quarter, increasing its holding by 75%.
Griffin, a former “Tiger Cub” of Tiger Management’s Julian Robertson, and in fact the second-in-command to Robertson at one point, founded the New York-based Blue Ridge Capital in 1996. The fund returned an impressive 65% in 2007, and weathered the 2008 financial crisis with just an 8% loss. However the fund failed to generate strong returns in the following years, underperforming the S&P 500 index. The fund is long/short in nature, with a bias towards long positions, as well as a balanced portfolio, and gravitates towards stocks considered consensus picks, and thus usually crowded.
Charter Communications, Inc. (NASDAQ:CHTR) is Griffin’s largest holding now, inching past Actavis plc (NYSE:ACT), though its position remained unchanged during the fourth quarter at 2.73 million shares. Charter is the fourth largest cable provider in the U.S, and was engaged in a battle with Comcast Corporation (NASDAQ:CMCSA) to acquire Time Warner Inc (NYSE:TWX), a battle it would eventually lose.
Despite that, there’s a lot to like about the company going forward, as evidenced by the fact that Warren Buffett is a backer of the stock. Among the potential reasons is that despite losing out on acquiring Time Warner, Charter Communications, Inc. (NASDAQ:CHTR) will be able to pick up the 1.5 million subscribers Time Warner will be forced to let go of, elevating it to the second largest cable company in the U.S.
However, a report surfaced yesterday suggesting that approval of the Comcast Corporation (NASDAQ:CMCSA), Time Warner Inc (NYSE:TWX) merger may not be a given, with the analyst setting just a 60% probability that it will happen.
Griffin’s new position in Walgreens Boots Alliance Inc (NASDAQ:WBA) is not technically a new position, as his 4.85 million shares Walgreen Company (NYSE:WAG) were converted into 4.58 million shares of the new holding company, after Walgreens’ deal to purchase Alliance Boots GmbH was approved near the end of the year, and the new company began trading under its new ticker. This immediately made the holding the third most valuable in his $8.24 billion portfolio. Walgreen Company (NYSE:WAG) shares were up 32.42% in 2014, shares of the new holding company are up 2.36% this year.
Facebook Inc (NASDAQ:FB) is an actual new position for Griffin, as he purchased 3.24 milion shares of the social media giant last quarter. While other investors like David Tepper are fleeing the stock (and in his case, many prominent U.S stocks), there is a lot of potential upside in Facebook despite its stall for the past few months.
In addition to the potential for monetization of assets like Instagram and WhatsApp, Facebook Inc (NASDAQ:FB) is also working on a number of new technologies that could increase revenue in various ways, such as its patented Influencer technology, which roots out influential members of a group whose shares are more valuable, and thus, could fetch higher ad prices from advertisers who want their content to get shared and go viral.
Cheniere Energy, Inc. (NYSEAMEX:LNG) is a stock several of our funds were extremely bullish on last quarter, and they seem to have been on to something, as the natural gas and oil exploration company is up 8.08% year-to-date, and 73.92% since the beginning of 2014, despite oil’s slump. Seth Klarman’s Baupost Group and Andreas Halvorsen’s Viking Global were two other funds that were very bullish on Cheniere last quarter.
Lastly is Alibaba Group Holding Ltd (NYSE:BABA), a position Griffin increased by 17% last quarter, adding 265,000 shares to his previous amount of 1.50 million. Alibaba was amongst the ten most people stocks owned by hedge funds at the end of the third quarter, and enjoyed a strong fourth quarter coming off its record IPO in September, gaining 19.38% to close out 2014.
However 2015 has been the complete opposite story, with Alibaba Group Holding Ltd (NYSE:BABA) down 16.44% year-to-date, primarily due to weaker than expected results at the end of January. Alibaba is also rumored to be embroiled in a battle with the Chinese government over counterfeit goods for sale on its website. Some of those accusations have led to the SEC launching an investigation into Alibaba, as to whether the company hid details about its operations from investors leading up to its IPO, which is likely to determine they did, given the details of the Chinese report. Stay tuned.
Disclosure: None
