Despite Micron Technology, Inc. (NASDAQ:MU)’s slumping stock price, Viking increased its stake in the $26 billion provider of semiconductor devices by 54% during the first quarter to 31.15 million shares valued at $844.99 million. The holding represents 2.88% of the company’s outstanding stock and 3.27% of the fund’s portfolio value. So far this year, Micron Technology, Inc. (NASDAQ:MU)’s stock has cratered by more than 30%. Morgan Stanley recently downgraded the stock to ‘Underweight’ from an ‘Equal Weight’ rating and revised downward its price target to $21 from $30. Concerns about Samsung willing to accept lower margins for DRAM in order to capture a greater market share have plagued Micron Technology, Inc. (NASDAQ:MU), which recently touched a new 52-week low. Among the funds that we track, David Einhorn‘s Greenlight Capital is the largest stockholder of Micron Technology, Inc. (NASDAQ:MU), owning about 33.55 million shares valued at $310.20 million. Here is what Halvorsen wrote about Micron in Viking Global’s Q1 investor letter:
“Micron, a leading manufacturer of memory semiconductors, was our biggest loser this quarter, costing VGE 0.6% and VLF 0.7%. Having ranked among our top five winners last year, Micron suffered from short-term PC DRAM pricing weakness in the first quarter, caused by a cyclical slowdown in the PC industry. We believe this weakness is temporary and of decreasing importance as industry demand will depend less on PCs and more on the high growth mobile and server end-markets. Our confidence is supported by an improved industry structure that we believe will lead to more stable margins, less volatile earnings, and higher shareholder returns. We initiated our investment in early 2013 on the back of this thesis and continue to believe strong long-term secular demand outweighs any short-term cyclical weakness. Of equal importance, we expect competitors to remain disciplined during this period of temporary weakness. As near-term pricing stabilizes and shareholder returns increase, we expect that investors will recognize the structural improvements in the industry and re-rate Micron from its current price-earnings multiple of 7.5x. We think there is significant upside to Micron’s share price and have chosen to keep it as a top 20 position in our portfolio.”
Viking increased its stake in Alibaba Group Holding Ltd (NYSE:BABA) by a hefty 87% during the first quarter to 6.94 million shares valued at $578.07 million. The stock of the $213 billion e-commerce juggernaut has fallen by over 17% year-to-date, although the specialty retail industry has gained over 4% during the same period. The hedge fund interest in Alibaba Group Holding Ltd (NYSE:BABA), among those that we track, has fallen over the course of the first quarter, as 86 firms had invested a total of $5.80 billion in the company at the end of March as compared to 90 funds with $7.11 billion invested at the end of the previous quarter. Rob Citrone‘s Discovery Capital Management is the largest stockholder of Alibaba Group Holding Ltd (NYSE:BABA) among these, holding about 8.77 million shares valued at $730.36 million.
Disclosure: None
