Eric Mandelblatt Tunes Up Soroban’s Portfolio Betting Big on Telecommunications

Soroban Capital Partners was founded by Eric W. Mandelblatt in 2010 as an activist investors focusing on equity and debt markets. Mandelblatt and Soroban have made headlines this year after they teamed up with activist Keith Meister’s Corvex Capital to oust Williams Companies Inc (NYSE:WMB) CEO Alan Armstrong and push for a sale of the company. Having failed both quests, Mandelblatt resigned from the company’s board, but has not liquidated Soroban’s stake in the company. Looking forward, Mandelblatt and his team have made a number of bets on telecommunications stocks, which accounted for 21% of Soroban’s equity portfolio at the end of the second quarter. The fund’s equity portfolio carried an estimated value of $16.2 billion. According to a regulatory filing, Soroban has recently launched a new fund, Soroban Special Investment Fund LLC, managing to raise $50.8 million in funding.

While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

Bullish Bet On SBA Communications

Number 5 on our list is SBA Communications Corporation (NASDAQ:SBAC). During the second quarter, Soroban Capital has amassed 2.05 million shares worth $221 million at the end of June. Thomas Steyer‘s Farallon Capital also holds a sizable position, having trimmed it by 1% to 2.95 million shares valued at $318 million. In general, hedge fund interest in SBA Communications Corporation (NASDAQ:SBAC) cooled down a bit during the second quarter, as the number of funds from our database invested invested in the stock dropped to 40 at the end of June, from 42 at the end of March. SBA shares are currently trading at around $113.85 apiece, up by 8.8% year-to-date. For the second quarter, SBA Communications Corporation (NASDAQ:SBAC) posted a profit of $32.7 million or $0.10 per share when adjusted for one-time gains. The result was below analysts’ consensus of $0.13 per share. Revenues came in at $381.8 million, also falling short of analysts’ projections of $405 million.

Everybody Like Union Pacific

Next up is Union Pacific Corporation (NYSE:UNP), a railroad operator. According to its latest 13F filing, Soroban held 4.48 million shares valued at approximately $391 million. Dmitry Balyasny is also bullish on this stock, having established a new position for his fund, Balyasny Asset Management, which held 2.09 million shares at the end of June. Union Pacific Corporation (NYSE:UNP) is among the 100 most popular stocks among the hedge funds followed by Insider Monkey. At the end of the quarter, 55 funds were invested in the stock, up from 54 registered a quarter earlier. Union Pacific Corporation (NYSE:UNP) has a market cap of $79.7 billion and pays an annual dividend of $2.20 per share, providing investors with a 2.29% yield. The stock is trading at a trailing Price to Earnings (P/E) ratio of 18, slightly higher than the industry average of 16.5. Analysts at JPMorgan Chase & Co. have recently reiterated their ‘Hold’ rating with a price target of $94 per share, while Morgan Stanley rates the stock as a ‘Buy’ and sees the price rising to $100 per share.

Turn the page to read about the three largest new positions reported by Soroban at the end of the quarter.

Energy Turnaround

Like many other hedge fund managers, Eric Mandelblatt is betting on a comeback in the energy sector and has established a fresh position in Marathon Petroleum Corp (NYSE:MPC). His fund disclosed a $407-million stake in the company in its latest 13F, having acquired 10.7 million shares during the second quarter. At the end of June, 43 of the funds tracked by Insider Monkey had this stock in their equity portfolios, slightly up compared to the previous quarter. Barry Rosenstein‘s JANA Partners has also reported a fresh investment in Marathon Petroleum Corp (NYSE:MPC) in its latest 13F filing, having amassed 2.72 million shares worth $103 million. Marathon Petroleum has teamed up with Enbridge Energy Partners, L.P. (NYSE:EEP) to take a position in the Bakken Pipeline System. The two companies have made a $2 billion investment in a holding company that owns 75% of the pipeline. The deal will help Marathon Petroleum Corp (NYSE:MPC) and Enbridge to transport oil from North Dakota to refineries in Texas, with the pipeline expected to go on line by the end of the year.

Big Bet On Liberty Broadband

Liberty Broadband Corp (NASDAQ:LBRDK) is another stock Mandelblatt and his team are bullish on. During the second quarter, Soroban Capital acquired 8.89 million Class C shares, a position reportedly worth $533 million. Interestingly, George Soros‘ family office, Soros Fund Management, and Philippe Laffont’s Coatue Management hold the same amount of shares as Soroban, according to their latest 13F filings. At the end of the quarter, roughly 57% of the company’s Class C shares were held by 43 of the funds in our database, up from 39 recorder three months earlier. Earlier this year, Liberty Broadband Corp (NASDAQ:LBRDK) conducted a public offering to raise $4.4 billion, which it later used to finance a $5 billion investment in Charter Communications, the entity formed after the acquisition of Time Warner Cable and Bright House Networks by Charter. Liberty Broadband Corp (NASDAQ:LBRDK) also manages TruePosition, a provider of mobile positioning and contextual location intelligence solutions.

Bullish On This Cable Company

At the end of the second quarter, Soroban Capital’s largest new bet was on Charter Communications, Inc. (NASDAQ:CHTR), as it held approximately 4.2 million shares worth in excess of $960 million. The position is probably the result of Charter Communications’ takeover of Time Warner Cable. Soroban held 8.12 million shares of Time Warner prior to the merger. At the end of the second quarter, Charter Communications was the fourth most popular company among the funds we follow, with 134 of them having reported a long position, up from 98 registered at the end of March. Together they held approximately 79% of Charter Communications, Inc. (NASDAQ:CHTR)’s common stock. Warren Buffett‘s Berkshire Hathaway also holds a piece of the pie, having indicated ownership of 9.34 million shares in its latest 13F filing. Earlier this year, Charter Communications completed the acquisition of Time Warner Cable for $55.1 billion, and Bright House Networks LLC for $10.4 billion, becoming the second-largest cable company in the United States. Charter Communications, Inc. (NASDAQ:CHTR) said it plans to gradually integrate the two businesses and re-brand them under the ‘Spectrum’ umbrella.

Disclosure: none.