Billionaire Julian Robertson’s Major Moves Ahead of Q2

Julian Robertson is a hedge fund legend. Although he stopped managing money for his clients more than 10 years ago, Robertson is still widely followed in the media and his comments attract a lot of attention. Robertson’s Tiger Management had a stellar track record before running into some difficulties in the dot com bull market. Julian Robertson returned 31.7% per year after fees between 1980 and 1998, beating S&P 500’s 12.7% annual return by a huge margin. His fund was also the starting place for several other major hedge fund managers, aptly named Tiger Cubs. Given Tiger Management’s track record, let’s take a closer look at the 13F filing Tiger Management recently has filed for the first quarter and analyze its moves in several companies, including Apple Inc. (NASDAQ:AAPL), GrubHub Inc (NYSE:GRUB), Royal Caribbean Cruises Ltd (NYSE:RCL), FedEx Corporation (NYSE:FDX), and Facebook Inc (NASDAQ:FB).

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Facebook Shines but Tiger Management Paring Stake

Although Facebook Inc (NASDAQ:FB) has been a strong performer, Tiger Management apparently took some profits and cut its position by 58% to 212,000 shares valued at $24.19 million at the end of the quarter, equal to 6.06% of Tiger Management’s equity portfolio. Many investors view Facebook Inc (NASDAQ:FB) as a great company given its network effects of over 1 billion users and given its visionary CEO, Mark Zuckerberg, who founded the company just 12 years ago. Growth has been very healthy for the company, with revenue rising a stunning 52% year-over-year for Facebook’s latest quarter. Earnings have also outperformed expectations. Nevertheless, some worry that the stock is no longer cheap anymore given its bull run over the past year. Tiger cub Stephen Mandel’s Lone Pine Capital held 11.41 million shares of Facebook at the end of March.

Tiger Management Loves This Economically Sensitive Company

Although drones might challenge FedEx Corporation (NYSE:FDX)‘s business over the next two decades, business for FedEx is currently very brisk for the company right now. The company benefits from the strong U.S. economy and from the continued growth of e-commerce. Not surprisingly, FedEx Corporation (NYSE:FDX) reported excellent third quarter earnings, with EPS of $2.51 on sales of $12.7 billion, beating analyst estimates by $0.17 per share and $320 million. The stock is also pretty cheap with a forward P/E of 13. Tiger Management established a new position in FedEx, which contained 124,6000 shares, worth slightly over $20 million, at the end of the first quarter. That accounts for 5.08% of Tiger Management’s equity portfolio.

On the next page, we are going to take a look at Tiger Management’s moves in the other three stocks.

Tiger Takes a Cruise

Tiger Management established a new position in Royal Caribbean Cruises Ltd (NYSE:RCL) in the first quarter, buying 294,300 shares worth slightly over $24 million and accounting for 6.06% of the fund’s equity portfolio at the end of March. Analysts are pretty bullish on the stock. 16 have ‘Buy’ ratings, 2 have ‘Hold’ ratings, and 1 has a ‘Sell’ rating. Overall, the analysts have a $99.13 price target, giving shares of the luxury cruise liner almost 30% upside. Given that luxury cruises is highly discretionary, Royal Caribbean Cruises Ltd should continue to do well as long as the economy remains healthy. Cliff Asness’ AQR Capital Management is another shareholder of Royal Caribbean Cruises Ltd (NYSE:RCL), disclosing 705,902 shares in its latest 13F filing.

Fast Growth Not Enough at GrubHub

Providing online menus/ordering/delivery is a fast growing market. For its first quarter, GrubHub Inc (NYSE:GRUB) revenues surged 27.1% year-over-year to $112.2 million, beating estimates by almost $1 million. EPS was in-line at $0.20 per share. Although growth in the market is healthy, many investors worry about coming competition from highly capitalized companies such as Uber that might take market share and lower margins. Perhaps because of that reason, Tiger Management sold out of its GrubHub Inc (NYSE:GRUB) position during the first quarter, previously having reported ownership of 1.54 million shares. Shares of GrubHub are up by 4% year-to-date.  Robert Pitts’ Steadfast Capital Management reported a new stake in GrubHub, containing 2.11 million shares at the end of March.

Elite Funds Going Opposite Ways in Apple

According to SEC filings, Tiger Management joined the likes of Carl Icahn in selling completely out of Apple Inc. (NASDAQ:AAPL) in the first quarter, after having reported 409,310 shares in its 13F for the end of 2015. Apple’s iPhone sales fell year-over-year for the first time ever and investors worry that China’s government could make things difficult for the company at some point. China’s government previously blocked several of Apple’s services in China, in what could be a prelude for further actions. China’s actions are worrisome for Apple shareholders because China accounts for a big chunk of Apple’s revenue. Nevertheless, the worries could be overblown given that Apple recently agreed to invest $1 billion in leading ride sharing app, Didi Chuxing. The investment might buy Apple some goodwill from the government. Warren Buffett’s Berkshire Hathaway reported a new $1.0 billion stake in Apple in its 13F filing for the end of the March quarter.

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