Tiger Cub Robert Karr Is Bullish On Cognex Corporation (CGNX) for 2016; Plus Four Other Major Moves

Joho Capital was founded in 1996 by Robert Karr and has managed to generate returns of 20% every year since inception. Prior to starting his own hedge fund, Karr served as managing director at Julian Robertson’s Tiger Management and was responsible for the fund’s Asian equity positions. Although he managed to provide investors with solid returns, in 2014 Karr decided to close the hedge fund and return the biggest part of the $5 billion he had under management. Having ended 2013 with a 30% return, he chose to call it quits while ahead, saying that frequent travelling required for running the business had taken its toll. Joho Capital was turned it into a family office and currently oversees an equity portfolio worth approximately $357 million. According to the fund’s latest 13F filing, Karr is focusing on three sectors: technology, industrials and consumer discretionary. During the fourth quarter of 2015, Robert Karr has made some notable changes to his positions, including some of the top holdings. In this article we’ll take a look at Joho’s stakes in GrubHub Inc (NYSE:GRUB) and TAL Education Group (ADR) (NYSE:XRS), and we’ll also analyze the largest new addition to the portfolio.

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Robert Karr decided to reduce exposure to GrubHub Inc (NYSE:GRUB), a position initiated during the second quarter of 2015. In its latest 13F filing, Joho reported ownership of 2.98 million shares, down by 5% over the quarter, valued at approximately $72.1 million. GrubHub Inc (NYSE:GRUB) was a lousy performer in 2015, dropping in value by 33%, and has continued its decline in 2016. The company posted fourth quarter results on February 4, beating analysts’ estimates of $99.42 million in revenues and earnings of $0.14 per share. GrubHub reported revenues of $99.96 million, up by 36% year-over-year, and a profit of $0.19 per share. This feat did not manage to offer support to the sliding stock, as it continued its journey south and is currently down by 11.5% year-to-date. Vivek Mehta and Aaron Husock’s Shearlink Capital also chose to reduce its exposure to GrubHub during the fourth quarter, reporting ownership of 447,658 shares in its latest 13F filing, down by 50% on the quarter.

Next up is Hexcel Corporation (NYSE:HXL), a position Karr has been holding for quite some time. He has not made any adjustments over the quarter, so Joho continues to hold 1.26 million shares worth $58.5 million as of the end of December. The same position was worth $56.5 million at the end of the third quarter. Hexcel Corporation (NYSE:HXL) had a good fourth quarter in terms of financial results, managing to beat analysts estimates. The company reported revenues of $464.9 million and earnings of $0.56 per share, above forecasts of $0.54 per share. The stock surged following the release of the report, but it was not enough to reverse the bearish trend, with shares currently down by roughly 15% since the beginning of 2016.

Last quarter Cognex Corporation (NASDAQ:CGNX) made it into Karr’s top five equity bets, after the position was boosted by 337% to 1.54 million shares. According to Joho’s 13F filing, this investment was valued at a little over $52 million at the end of the fourth quarter. Cognex Corporation (NASDAQ:CGNX) reported fourth-quarter financial results last week, providing a positive boost to its stock price. The manufacturer of machine vision products reported a profit of $18.7 million or $0.22 per share, beating analysts’ estimates of $0.17 per share. Revenues came in at $97.8 million, above Wall Street’s expectations of $95.1 million. As a result, the stock has regained all of the ground lost since the start of the year and is currently trading in green year-to-date.

Turn the page to find out how Karr reacted to the latest developments at TAL Education and what was his largest new bet heading into 2016.

It looks like Karr has accelerated the offloading of TAL Education Group (ADR) (NYSE:XRS) shares, having dumped roughly 53% of his holding during the fourth quarter. Joho Capital now holds 883,056 shares worth $41 million. The stock rewarded Karr with a good return in 2015, having advanced by more than 65% by the end of December. The Chinese provider of educational and training services reported fiscal third quarter results at the end of January, failing impress investors. Revenues came in at $142.2 million, up by 43% year over year, and earnings of $0.12 per share. Analysts, in turn, were looking for revenues of $173 million and earnings of $0.13 per share.

Multicolor Corporation (NASDAQ: LABL) represents the largest new position initiated during the fourth quarter, with Joho indicating ownership of 327,400 shares worth approximately $19.6 million at the end of December. The stock took a nosedive at the beginning of February and the recent quarterly report has only accelerated the decline. Multi-Color posted revenues of $206 million and earnings of $0.57 per share, below the consensus of $0.68 per share. Jim Simons‘ Renaissance Technologies, on the other hand, chose to reduce its exposure to this stock, having dumped 29% of its holding during the fourth quarter.

Disclosure: none.