Roberto Mignone’s Bridger Management follows a long/short strategy after extensively researching companies. Their analysts do the legwork and dig deep by visiting companies, attending trade shows, and talking to journalists and competitors. Katherine Burton profiled Roberto Mignone in her book “Hedge Hunters”. She explains Mignone’s strategy as follow:
“Mignone’s core positions include roughly thirty long positions, which are each limited to 5 percent of the portfolio initially and never get larger than 10 percent. He has about sixty core short positions, each no bigger than 2 percent at the start. He never allows them to grow bigger than 4 percent. Overall, the gross exposure is 150 to 200 percent, meaning the value of the long and short positions adds up to 1.5 to 2 times the net assets in the fund. The net exposure is between 20 and 60 percent.”
Roberto Mignone graduated from Harvard Business School and joined John Griffin at Blue Ridge Capital. Right before his 29th birthday in July 2000, he launched Bridger Management, which now manages about $2 Billion. He charges a 1.5 percent management fee and 20 percent incentive fee. He believes fund size is a drag on the performance of a long/short fund manager, so he has no desire to run a much bigger fund than what he is currently running.
At the end of December, Mignone’s 13F portfolio reached $2.1 Billion, an increase of around 25% from September.
| Company | Ticker | Return | Value (Millions) |
| GENERAL MOTORS CO | GM | -1.1% | 70 |
| COVIDIEN PLC | COV | 11.1% | 68 |
| DIRECTV GROUP INC | DTV | 8.9% | 67 |
| MARKET VECTORS GOLD MINERS | GDX | -9.3% | 46 |
| ZIMMER HOLDINGS INC | ZMH | 12.9% | 40 |
| CARMAX INC | KMX | 11.2% | 30 |
| COPART INC | CPRT | 10.1% | 30 |
| LPL INVESTMENT HOLDINGS INC | LPLA | -9.4% | 29 |
| RESEARCH IN MOTION LTD | RIMM | 15.0% | 27 |
| PSS WORLD MEDICAL INC | PSSI | 10.5% | 22 |
| SCIENTIFIC GAMES CORP | SGMS | -1.7% | 20 |
| UNIVERSAL DISPLAY CORP | PANL | 32.0% | 18 |
| INSULET CORP | PODD | 16.1% | 18 |
| PRICELINE.COM INC | PCLN | 14.0% | 15 |
| BOOZ ALLEN HAMILTON HOLDING | BAH | -2.4% | 15 |
| ANHEUSER-BUSCH INBEV | BUD | -1.9% | 13 |
| KROGER CO | KR | 1.5% | 13 |
| NETSPEND HOLDINGS INC | NTSP | 13.1% | 11 |
| COGENT COMMUNICATIONS GROUP | CCOI | -0.4% | 10 |
| INSPIRE PHARMACEUTICALS INC | ISPH | -53.2% | 8 |
The value weighted return of these 20 new stocks is 5.4% since the end of 2010, vs. SPY’s 5.9% return.
General Motors tops the list of Roberto’s Mignone’s new stock picks. Perry Capital’s Richard Perry and Omega Advisor’s Leon Cooperman bought significant amounts of GM as well.
David Tepper added Covidien to his portfolio during third quarter.
Jim Simons’ Renaissaince, Chase Coleman’s Tiger Global, Tom Steyer’s Farallon Capital have Directv (DTV) investments.
Roberto Mignone also joined other hedge fund managers with a small investment in Gold Miners ETF (GDX). Daniel Loeb, Brevan Howard, and Curtis Schenker’s Scoggin also like GDX as an inflation hedge. Earlier today we reported Tom Steyer’s new LPLA position. Roberto Mignone also added LPLA to his portfolio.
LPLA lost 9.4% this year.
Mignone’s best performing new stock picks this year are Universal Display (PANL), Insulet Corp (PODD), and Research In Motion (RIMM). So far, none of the equity hedge funds we follow have significant amounts of these stocks.
Mignone also increased some of his healthcare holdings by at least 60% during fourth quarter: Ironwood Pharmaceuticals (IRWD), Allergan Inc (AGN), Onyx Pharmaceuticals (ONXX), and Cardinal Health Inc (CAH).
We compiled Mignone’s top 25 positions at the end of 2010:
| Company | Ticker | Return | Value (Million) |
| CARDINAL HEALTH INC | CAH | 8.5% | 101 |
| WASTE CONNECTIONS INC | WCN | 6.2% | 96 |
| MORGAN STANLEY | MS | 11.0% | 82 |
| IESI-BFC LTD | BIN | -4.4% | 80 |
| HERTZ GLOBAL HOLDINGS | HTZ | 13.3% | 78 |
| GENERAL MOTORS CO | GM | -1.1% | 70 |
| POPULAR INC | BPOP | 6.1% | 70 |
| HYATT HOTELS CORP | H | 7.5% | 69 |
| COVIDIEN PLC | COV | 11.1% | 68 |
| AVIS BUDGET GROUP INC | CAR | -0.4% | 68 |
| DIRECTV GROUP INC | DTV | 8.9% | 67 |
| STATE STREET CORP | STT | 1.4% | 65 |
| BOSTON SCIENTIFIC CORP | BSX | -9.1% | 59 |
| PALL CORP | PLL | 11.6% | 59 |
| ONYX PHARMACEUTICALS INC | ONXX | -2.0% | 59 |
| GENPACT LTD | G | -4.3% | 56 |
| GOOGLE INC | GOOG | 5.1% | 52 |
| EXPEDIA INC | EXPE | -15.1% | 47 |
| MARKET VECTORS GOLD MINERS | GDX | -9.3% | 46 |
| ISTAR FINANCIAL INC | SFI | 14.5% | 43 |
| CAREFUSION CORP | CFN | 8.1% | 42 |
| ALLERGAN INC | AGN | 7.6% | 41 |
| ZIMMER HOLDINGS INC | ZMH | 12.9% | 40 |
| NATIONAL CINEMEDIA INC | NCMI | -7.4% | 37 |
| MOBILE TELESYSTEMS | MBT | -5.3% | 32 |
Eight of his eleven top holdings managed to beat the SPY since the end of 2010. Unfortunatel, he had too many stocks that actually had negative returns, so overall his top 25 positions returned 3.7%, underperforming the SPY’s 5.9%. Mignone’s portfolio has more unique names than other Tiger cubs’ portfolios. This is what we like about Mignone; his portfolio is less correlated with hedge fund indices.
Nevertheless, he still has a few “normal” investments. Tom Steyer has IESI BFC in his portfolio. Barry Rosenstein’s Jana Partners has Hertz (HTZ) in its portfolio. Jim Simons, Andreas Halvorsen’s Viking Global, Zweig-DiMenna, and Jonathan Auerbach’s Hound Partners have Google in their portfolios. Fellow Tiger cub Lee Ainslie has Expedia and David Einhorn has Carefusion investments.
Roberto Mignone’s Bridger Management started selling some of its holdings. United Health (UNH), Activision Blizzard (ATVI), Carefusion (CFN), Princeton Review (REVU), AMR Corp (AMR), and Electronic Arts (ERTS) are among the positions that were trimmed by at least 35%.
