Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
Today, let's look at Viking Global Investors, founded in 1999 by Andreas Halvorsen and David Ott, who had previously worked together at Julian Robertson's respected Tiger Management firm. Viking is known as a long-short global equity fund, meaning that it aims to maintain long positions in companies on which it's bullish and short positions in those where it's bearish.
The company's reportable stock portfolio totaled $16.7 billion in value as of March 31, 2013.
Interesting developments
So what does Viking's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Boeing and cement giant Cemex. Other new holdings of interest include Sarepta Therapeutics (NASDAQ: SRPT ) and National Oilwell Varco (NYSE: NOV ) . Sarepta stock has soared more than tenfold over the past year. After the company petitioned the FDA for accelerated approval for its Duchenne muscular dystrophy drug, eteplirsen, the FDA requested more information, sending shares lower. But management is optimistic about its recent interactions with the FDA, and new data reported this week was encouraging. Some see the stock as reasonably or attractively valued, but there are risks to consider.
National Oilwell Varco, a leader in oil and gas drilling and oil-field services equipment, has been a strong performer, averaging stock growth of 20% annually over the past decade and up about 13% over the past year. There's much to like about the company, such as its record backlog of nearly $13 billion and its operations in productive shale fields. The previously unimpressive dividend has been doubled , and now yields about 1.5%, with more room to grow. The drilling specialist has even been providing thousands of pumping stations to areas where people are living without sufficient access to clean water. National Oilwell Varco's stock has many fans who expect improved performance soon, but analysts at Zacks recently downgraded the stock to a strong sell rating due to weak first-quarter results.
Among holdings in which Viking Global increased its stake was Intuitive Surgical (NASDAQ: ISRG ) , a specialist in robotic surgical equipment. The company has had a bumpy year, thanks to bearish comments from a research firm and questions about the efficacy of its systems. Some legal worries were eased recently, with a victory in court. While some wonder whether the company's growth prospects are slowing down, others love Intuitive's competitive advantages and dominance in its promising market. It has been posting double-digit revenue and earnings growth rates for quite a while and has a forward P/E ratio near 23, which is not exactly nosebleed territory.
Viking Global reduced its stake in lots of companies, including Qualcomm (NASDAQ: QCOM ) , a top player in the smartphone world, supplying iDevices and Android devices alike with its chips. Some promising moves by the company are its push into emerging markets and display technology, as well as its attention to the health-care industry and telemedicine. Qualcomm recently hiked its dividend by 40%, and its yield is now at 2.3%. Better still, its profit margins are fat, it's generating gobs of cash, and its revenue and earnings growth rates have been in the double digits for years now and have even been accelerating.
Finally, Viking's biggest closed positions included News Corp. and Schlumberger. Other closed positions of interest include India-based ICICI Bank (NYSE: IBN ) . In April, the bank reported double-digit profit increases and rising ROE, and it recently yielded 2%. Analysts at Zacks downgraded the bank earlier this month, though, citing deterioration of its credit quality and expected steep operating expenses. ICICI is a major lender in India and is growing briskly there, and is expanding abroad, targeting even China. Its stock is up about 29% over the past year and has averaged 20.5% annually over the past decade.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.
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