EMC Corporation (NYSE:EMC) was the largest of Maverick’s newest purchase, earning a $161mm investment from the fund (that amounts to about 2.4% of the fund’s total AUM). The IT infrastructure player owns 80% of VMware, whose shares dropped 20% after issuing poor guidance in its latest quarterly release in January; seven downgrades followed shortly thereafter. However, Longbow Research is a new fan of parent company EMC, initiating coverage with a Buy and setting a $30 price target (over 20% away from current levels). EMC Corporation (NYSE:EMC) is looking to bolster shareholder value with a $1bn stock buyback program in 2013. Billionaire Andreas Halvorsen of Viking Global made a new purchase worth $117mm as well (read about his portfolio here).
Crown Castle International Corp. (NYSE:CCI) was the second biggest of the sixteen purchases made by Maverick, grabbing almost $109mm of the fund’s capital. The company operates and leases communication towers (totaling near 7,100 now after a completed agreement with T-Mobile USA). CCI sees larger profits in its future with the four major cellular networks upgrading to LTE. Analyst firms like Pacific Crest and Evercore Partners have high hopes for the company as well, even after a share price appreciation of 30% in the past twelve months. Billionaire Stephen Mandel of Lone Pine Capital carries almost 2.9mm shares of Crown Castle International Corp. (NYSE:CCI) (take a look at the fund’s full holdings here).
Fidelity National Information Services (NYSE:FIS) received a 1.5% allocation from Maverick, amounting to slightly over $100mm of the fund’s AUM. FIS carries a respectable dividend of 2.3% (recently increased in February); the yield has complemented its trailing twelve month’s gain, besting the market by six percentage points. The bank technology provider completed its purchase of mFoundry at the end of January, a company that provides mobile banking services to the likes of PNC and BofA. Fidelity National Information Services (NYSE:FIS) saw increased interest from hedge funds going into the end of 2012; out of the hundreds of funds we track, 28 held FIS in Q3 2012, while 35 claimed ownership in Q4. Billionaire Ken Griffin of Citadel Investment Group bumped up his call option position according to his newest 13F (check out his other positions here).
Which other stocks received new allocations in Q4 2012?
FleetCor Technologies, Inc. (NYSE:FLT) took the number four spot in terms of large purchases for Maverick; the fund initiated an almost $100mm position as indicated by its last 13F filing. The commercial payments solution provider nearly doubled in value in the past twelve months; it has grown 31% since the start of this year alone (note that a good portion of that move occurred after the company’s Q4 earnings beat in February). Sell-side analysts are seeing the stock in an overheated zone, as their valuations a year out are lower than where there the stock is currently trading. JP Morgan recently downgraded the stock in January, bumping it from Overweight to Neutral. Billionaire Jim Simons of Renaissance Technologies cut his position by more than half towards the end of 2012 (view his other holdings here).
F5 Networks, Inc. (NASDAQ:FFIV) develops solutions for managing network traffic, a space that has some stiff existing competition (think Cisco Systems and Juniper Networks). Despite disappointing share performance in the recent past, Wall Street has lofty price targets for FFIV, including one at the $120 mark from Goldman Sachs. The average target of analysts’ sits at a slightly more modest $114, which would mean a hefty return on Maverick’s $84mm investment. Despite delivering a miss with its Q1 2013 earnings announcement in January, FFIV had increased revenues and gross profit year over year. Steven Cohen of SAC Capital Advisors more than doubled his position from Q3 2012 to Q4 (see the fund’s top five picks here).
Disclosure: I do not own shares of any stocks mentioned in this article.
