As a new filing with the Securities and Exchange Commission showed, Tiger cub Andreas Halvorsen‘s Viking Global has cut its exposure to $11 billion flooring manufacturer Mohawk Industries, Inc. (NYSE:MHK). According to the filing, Viking now owns 4.03 million shares of the company, the passive stake amassing 5.5% of the company. Previously, Viking held some 5.68 million shares, as it revealed in its latest 13F filing.
Mr. Halvorsen is one of the greatest Tiger cubs (former employees of Julian Robertson’s Tiger Management who launched their own funds). After founding Viking Global back in 1999 with two other former Tiger employees David Ott and Brian Olson, Viking managed to return almost 90% after fees in its first full year. As we have discussed in an earlier article, Viking’s flagship fund returned on average 19% per year, and more than a decade after its launch, Viking manages an equity portfolio worth over $24 billion divided across several industries, with a slight focus towards healthcare and services stocks.
Moreover, Viking’s 13F portfolio posted value-weighted average returns of 0.67% per month during the 2000-2012 period, which is well-above the S&P 500 total return of 0.30% per month. In addition, Viking’s top five picks, which are represented by Illumina, Inc. (NASDAQ:ILMN), Pioneer Natural Resources (NYSE:PXD), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Walgreen Company (NYSE:WAG), and Lowe’s Companies, Inc. (NYSE:LOW) in its latest 13F filing, managed to return on average 0.84% per month in the same period, which is up by more than six percentage points than the S&P 500 total return.
Mohawk Industries, Inc. (NYSE:MHK) has posted modest returns since added to Viking’s equity portfolio during the third quarter of 2013, gaining less than 10% since the end of 2013. However, Mr. Halvorsen has been bullish on the stock throughout 2014, as Viking boosted its stake from around 651,100 shares held initially. The position still amasses between 2% and 3% of the fund’s equity portfolio, which is why it should not be overlooked.
The company is engaged in manufacturing and distribution of carpets, rugs, ceramic tiles, laminate, wood and other types of flooring under several key brands. Mohawk Industries, Inc. (NYSE:MHK)’s stock posted a modest 2% gain over the last 52 weeks as the company reported declines in revenues and earnings. However, at the same time, the company has attracted the interest of investors, as our data show. Out of more than 180 funds that we track at Insider Monkey, in the previous round of 13F filings 55 investors reported long positions in Mohawk Industries as of the end of September, up from 53 funds in the previous quarter. In addition, the aggregate value of the stakes held by these funds went up by $595.7 million to $3.16 billion.
Aside from Mr. Halvorsen, who increased Viking’s stake in Mohawk Industries, Inc. (NYSE:MHK) by 25% during the third quarter of 2014, the company has also attracted the attention of Stephen Mandel of Lone Pine Capital. In this way, Lone Pine initiated a $416.6 million stake during the third quarter, which contains 3.09 million shares and represents 1.62% of the fund’s equity portfolio. At the same time, Doug Silverman and Alexander Klabin‘s Senator Investment Group almost doubled its position to 1.69 million shares.
In addition to a bullish sentiment from some big investors, Mohawk Industries, Inc. (NYSE:MHK) also has a mean ‘Buy’ rating from analysts, while its average target price amounts to over $162 per share. In addition, the company is expected to post significant revenue and earnings growth for the next two years.
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