We track quarterly 13F filings from hundreds of hedge funds, including billionaire (and Tiger Cub) Andreas Halvorsen’s Viking Global. We have found that the information in 13Fs can be used to develop profitable investing strategies; for example, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). By comparing the most recent filing to the previous one recorded in our database, we can also identify new picks that were added to an individual manager’s portfolio in the intervening time. These picks can serve as initial investment ideas, and investors can do more research on any stocks which sound appealing. Read on for our quick take on Viking Global’s five largest new holdings from the first quarter of 2013 (or see the full list of the fund’s stock picks).
Halvorsen and his team bought over $1 billion worth of The Boeing Company (NYSE:BA) between January and March, or more than 12 million shares. While The Boeing Company (NYSE:BA) had some hiccups earlier this year related to the safety of its new Dreamliner aircraft, those concerns appear to have been satisfied in the eyes of the market and the stock is up over 30% year to date. Its current price places it at a valuation of 14 times forward earnings estimates. SAC Capital Advisors, managed by billionaire Steve Cohen, reported a position of 1.8 million shares at the end of March (find Cohen’s favorite stocks).
According to the 13F, Viking Global owned 7.1 million shares of Adobe Systems Incorporated (NASDAQ:ADBE) at the end of the quarter after not having any shares in its portfolio at the beginning of the year. Adobe is another stock dependent on future growth: it carries trailing and forward P/Es of 30 and 25, respectively, making for pretty aggressive pricing in the market. In addition, it also reported declines in both revenue and net income in its most recent quarter (which ended in early March) compared to the same period in the previous fiscal year.
Halvorsen disclosed ownership of 2.8 million shares of Marathon Petroleum Corp (NYSE:MPC), another refining and marketing company. We’ve mentioned that this whole peer group is cheap going by earnings numbers, and Marathon (not to be confused with former parent Marathon Petroleum Corp (NYSE:MPC) Oil) is no exception with trailing and forward P/Es of 8. Financial results also appear to be on an upward trend, with double-digit percentage gains on both top and bottom lines last quarter compared to the first quarter of 2012.
We agree with Viking Globa that downstream energy companies look interesting, and would be interested in investigating Valero Energy Corporation (NYSE:VLO) and Marathon Petroleum Corp (NYSE:MPC) compared to their peers. The Boeing Company (NYSE:BA) also has some appeal, although we might want to wait for more financial results there to better evaluate hitting analyst targets for next year. In the cases of Adobe Systems Incorporated (NASDAQ:ADBE) and Cemex SAB de CV (ADR) (NYSE:CX), we’re considerably less interested as we can see that recent results have not been strong while the current valuations seem to be speculating on high growth going forward.
Disclosure: I own no shares of any stocks mentioned in this article.
