Should You Follow Orbis Investment Management into XPO Logistics Inc (XPO)?

Orbis Investment Management was founded by William B. Gray in 1989. The fund is based in Hamilton, Bermuda, and has an equity portfolio worth $129.05 million as of the end of September, up from $119.02 million at the end of March. According to our calculations, the fund had a return of 14.02% from 68 long positions in companies having a market capitalization of $1 billion or more, based on the size of these positions at the end of the second quarter.

It is interesting to note that while actual returns of hedge funds are trailing the market, their returns from long positions in non-microcap companies are actually beating the market with impressive margins. For example, in the third quarter, out of 660 funds that we track, 627 had positive returns.

In this article, let’s take a closer look at four holdings from Orbis’ equity portfolio and what other smart money investors think about them.

William Gray of Orbis Investment Management

Orbis Investment Management loaded up on XPO Logistics Inc (NYSE:XPO) in the second quarter, and the investment proved to be successful as the stock returned 39.6% in the third quarter. Orbis had amassed 487,262 shares of the company at the end of June, valued at about $12.79 million and as it held the stake unchanged during the third quarter, the value of the holding surged to $17.89 million at the end of September.  XPO Logistics Inc (NYSE:XPO) was in 16 hedge funds’ portfolios at the end of June, down from 22 funds in our database with XPO holdings at the end of the previous quarter. Trailing Orbis Investment Management, which held the largest stake, was Luminus Management, which amassed a stake valued at $65.7 million at the end of June. Nine Ten Partners, Millennium Management, and Buckingham Capital Management also held valuable positions in the company.

Orbis Investment Management cut its stake in QUALCOMM, Inc. (NASDAQ:QCOM) in its portfolio in the second quarter, and the stock returned an impressive 29% in the third quarter. At the end of June, Orbis had a total of 232,703 shares of QUALCOMM, Inc. (NASDAQ:QCOM) valued at $12.46 million. In the following quarter, the position was cut by 20% to 185,347 shares worth $12.70 million. Overall, the number of funds followed by our team long QUALCOMM slid by 11 to 48 during the second quarter. Orbis was the largest shareholder and on the second spot was Fisher Asset Management which amassed $524.1 million worth of shares at the end of June. Moreover, Gruss Asset Management, Generation Investment Management, and SPO Advisory Corp were also bullish on QUALCOMM, Inc. (NASDAQ:QCOM).