Billionaire Rob Citrone Grows Bullish on Energy, Airline and Healthcare Stocks

Discovery Capital Management is a US-based hedge fund founded in 1999 by Robert Citrone. Based in Connecticut, Discovery Capital focuses on liquidity, valuation multiples, past and potential growth in picking stocks and has a focus on technology, services, basic materials and financial sectors. Discovery Capital’s annualized returns is around 17% since 1999. Citrone is a “Tiger Cub” who has seen his funds under-perform in the last couple of years. In September, 2016, he was anticipating a major market correction. According to Bloomberg, he said: “We believe we are in the midst of the market correction we have been expecting. It will likely persist over the next 3-4 months and be the largest correction since the 2008 crisis”.

The fund’s 13F filing for the fourth quarter showed an equity portfolio worth $5.93 billion with the top 10 holdings amassing 35.22% of the value. In this article, we are going to look at some of his top moves during the fourth quarter.

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In Halliburton Company (NYSE:HAL), Discovery Capital Management initiated a stake that contained 3.57 million shares valued at $193 million at the end of 2016, making it the fifth largest holding in the fund’s 13F portfolio. Stanley Druckenmiller‘s Duquesne Family Office was also bullish on the stock, as it initiated a position containing 1.0 million shares during the same time period. The stock has been on a roll, as it has gained 84% over the last year. Halliburton Company (NYSE:HAL) is one of the biggest service providers to the upstream oil and gas industry with a market value of $45 billion. The company is expected to do well under the new Republican administration which is expected to enact policies to boost the development of the domestic oil and gas sector. The upstream exploration industry has recently saw a major merger with General Electric Company (NYSE:GE) announcing its intention to combine its oil and gas business with Baker Hughes Incorporated (NYSE:BHI) to create a $32 billion company. Among the funds we track, the number of funds long Halliburton Company (NYSE:HAL) increased by six to 62 during the October-December period.

Devon Energy Corp. (NYSE:DVN) was another stock in which Discovery Capital Management acquired a new position and disclosed holding 3.36 million shares worth $153 million in its latest 13F. Fellow Tiger Cub Andreas Halvorsen‘s Viking Global is also bullish on the company, having reported a 280,000-share stake as of the end of December. Devon Energy Corp. (NYSE:DVN)’s stock surged by around 100% over the last year. The company, which is heavily engaged in shale oil and gas production, should be a big beneficiary of the OPEC deal to boost oil prices by cutting down on the overall production. In the fourth quarter, Devon Energy Corp.’s (NYSE:DVN) oil production reached 537,000 oil-equivalent barrels per day, exceeding the midpoint of guidance by 2,000 Boe per day. At the end of the fourth quarter, 55 funds from our database held shares worth $1.6 billion in Devon Energy Corp. (NYSE:DVN), versus 50 funds with stakes worth $1.34 billion at the end of September.

Biogen Inc. (NASDAQ:BIIB) represents the biggest healthcare position in Discovery Capital Management’s 13F portfolio, with the fund having increased its stake by 418% to 504,765 shares worth $143 million during the fourth quarter. On the other hand, Viking Global reduced its stake in Biogen Inc. (NASDAQ:BIIB) by 267,524 shares to 1.92 million shares over the same period. Shares of the bio-pharmaceutical giant have underperformed the market, but still have gained 16% over the last year. Pharma stocks have been under pressure after President Trump said that drug prices need to be sharply lowered to bring down the healthcare costs. Biogen Inc. (NASDAQ:BIIB) recently spun off its hemophilia business into a separate company Bioverativ Inc. (NASDAQ:BIVV) to focus on its neurological treatments. Between October and December, the number of funds tracked by us bullish on Biogen declined to 76 from 81.

Discovery Capital Management started a new position in Delta Air Lines, Inc. (NYSE:DAL) by buying 2.55 million shares valued at $125 million at the end of 2016. Billionaire Warren Buffett’s Berkshire Hathaway boosted its stake in Delta Air Lines, Inc. (NYSE:DAL) by over 53 million shares to around 60 million shares disclosed in its latest 13F. Delta Air Lines, Inc. (NYSE:DAL) is on track to receive its new flagship Airbus A350-900, which is currently under production, as older Boeing 747-400 aircraft is scheduled to retire by the end of this year. The new aircraft will come fitted with seatback entertainment, Wi-Fi and a modern cabin. The number of funds from our database that had Delta Air Lines, Inc. (NYSE:DAL) in their portfolios inched up by three to 88 during the fourth quarter.

On the other hand, Robert Citrone’s fund closed its position in Activision Blizzard, Inc. (NASDAQ:ATVI) as it sold 2.94 million shares during the fourth quarter. Other investors that unloaded shares of the company included Citadel Advisors, Daniel Och’s OZ Management and Arrowstreet Capital. The company recently has announced the launch of a newly created Consumer Products division and also hired Tim Kilpin, a former employee of Mattel and Disney. For the fourth quarter, Activision Blizzard, Inc. (NASDAQ:ATVI) reported great results with adjusted earnings of $0.92 per share beating analyst estimates of $0.73 per share, while revenue of $2.45 billion was above the consensus estimate of $2.35 billion. The company reported an online player community of 50 million for 2016, up by 3% from 2015. Shares of Activision Blizzard, Inc. (NASDAQ:ATVI) have declined by almost 9% in the second half of 2016. A total of 61 funds from our database amassed around 10.4% of Activision Blizzard’s stock heading into 2017.

Disclosure: None