Robert Citrone of Discovery Capital Management is a big player in the hedge fund industry. With around $9.71 billion in equities, Discovery holds a diversified portfolio, with the largest share of it invested in tech stocks. His latest 13F filing showed that the majority of the largest positions from his fund’s equity portfolio are represented by technology companies, while the fund also invests in finance and consumer stocks. In this article we will look into Mr. Citrone’s largest tech bets, which include Alibaba Group Holding Ltd (NYSE:BABA), Apple Inc. (NASDAQ:AAPL), Baidu Inc (ADR) (NASDAQ:BIDU), SanDisk Corporation (NASDAQ:SNDK), and Micron Technology, Inc. (NASDAQ:MU).
With a lot of exposure towards emerging markets, Mr. Citrone managed to achieve annualized returns as high as 19% since his fund’s inception in 1999. Discovery Capital Management was founded with seed money from two billionaire investors, George Soros and Julian Robertson, the latter being the former boss of Mr. Citrone. Moreover, since its inception, the only year when Discovery’s flagship fund posted a negative return was in 2008, when the fund lost more than 30% amid a big market downturn.
At the end of 2014, the largest position in Discovery Capital Management’s equity portfolio was represented by Alibaba Group Holding Ltd (NYSE:BABA). Mr. Citrone initiated a stake at the end of the third quarter as the company went public and in the last three months of 2014, he sold around 1.14 million shares, remaining with 9.25 million shares, valued at $961.71 million. It was a good call to take some profits, as the stock of the Chinese e-commerce giant gained around 17% during the fourth quarter. Alibaba Group Holding Ltd (NYSE:BABA) was a highly anticipated IPO last year and the company quickly gained popularity among investors, but at the end of the fourth quarter, 90 funds reported holding shares of the company, versus 110 funds in the previous quarter. Moreover, the value of the stakes in Alibaba Group Holding Ltd (NYSE:BABA) held by the funds that we track fell to $7.10 billion, from $7.69 billion a quarter earlier, despite the stock’s strong appreciation of 17.12% during that period.
Nevertheless, Alibaba Group Holding Ltd (NYSE:BABA) remains one of the favorite picks of many great investors, including Dan Loeb of Third Point, who increased his stake by 39% to 10.0 million shares worth $1.04 billion as of the end of 2014, and Chase Coleman‘s Tiger Global Management, which initiated a $604.48 million position that contained 5.82 million shares.
Mr. Citrone also trimmed his stake in Apple Inc. (NASDAQ:AAPL) during the fourth quarter, disposing around 593,100 shares. His fund held a $877.88 million position that contained 7.95 million shares. For years Apple has been one of the most favored stocks among investors. The company has strong financial results, and a solid cash position which it plans to use to return money to investors, among other things. All in all, Apple is one of the companies that is a must-buy for every investor that is betting on the technology sector.
In addition, one of the top shareholders of Apple Inc. (NASDAQ:AAPL) is activist billionaire Carl Icahn, who has previously pushed for more money to be returned to shareholders, and is still doing so. In the latest 13F filing, Carl Icahn disclosed ownership of 52.76 million shares, with a total value of $5.82 billion. Billionaire Stephen Mandel added Apple Inc. (NASDAQ:AAPL) to his equity portfolio during the fourth quarter and disclosed holding 2.18 million shares as of the end of last year.
On the other hand, Discovery’s position in Baidu Inc (ADR) (NASDAQ:BIDU) was boosted during the fourth quarter with the addition of 520,000 shares, which took the holding up to 1.21 million shares valued at $275.50 million. Mr. Citrone was not alone in his ‘bullishness’ regarding the Chinese search engine. In fact, 95 funds from our database reported ownership of $8.42 billion worth of Baidu Inc (ADR) (NASDAQ:BIDU)’s stock, including 16 billionaire investors. Stephen Mandel, Andreas Halvorsen, Daniel S. Och, and Ken Fisher are only a few of the billionaires that held shares of Baidu Inc (ADR) (NASDAQ:BIDU) at the end of 2014.
In SanDisk Corporation (NASDAQ:SNDK), Discovery reported ownership of 2.80 million shares, down by 7% on the quarter. The $274.39 million stake is the fourth largest in terms of value in the fund’s equity portfolio. The stock of the storage devices manufacturer gained around 38% during 2014 and Mr. Citrone has been constantly cutting his stake, which was the largest in terms of value at the end of March, when the fund held close to 7.96 million shares of SanDisk Corporation (NASDAQ:SNDK). Jean-Marie Eveillard’s First Eagle Investment Management is another shareholder of SanDisk Corporation (NASDAQ:SNDK), holding 2.23 million shares at the end of 2014.
The fifth-largest tech position in Discovery’s 13F portfolio is represented by Micron Technology, Inc. (NASDAQ:MU). However, the company is the sixth-largest overall, being outrun by Michael Kors Holdings Ltd (NYSE:KORS) on the fifth spot. The fund raised its exposure to the memory chipmaker by 27% during the last three months of 2014 and reported holding 6.67 million shares, valued at $233.41 million. However, other investors seem to be pulling away from Micron Technology, Inc. (NASDAQ:MU), as in the last round of 13F filings, 113 funds reported holding some $8.21 billion of the company’s stock, versus 109 funds with $9.08 billion a quarter earlier. David Einhorn’s Greenlight Capital is one of the largest shareholders of Micron Technology, Inc. (NASDAQ:MU), holding 31.26 million shares at the end of 2014. However, Seth Klarman’s Baupost Group, that had over $1.1 billion invested in Micron for over a year, trimmed its stake by 62% during the fourth quarter, and disclosed holding 19.71 million shares in its latest 13F filing.
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