Maverick Capital’s Largest New Positions
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With the most recent quarter over, we have been able to compile over four hundred 13F filings that were submitted to the SEC in the past few weeks. These filings outline the positions that hedge funds and money managers are holding during that quarter, and our proprietary analysis lets us decipher what the smart money is doing, where the inflows and outflows are, and where new value has been discovered. The following list represents the five largest positions that Lee Ainslie of Maverick Capital saw fit to commit capital to in the final months of 2012.
EMC (NYSE: EMC) was the largest of Maverick’s newest purchase, earning a $161 million investment from the fund (that amounts to about 2.4% of the fund’s total AUM). The IT infrastructure player owns 80% of VMware, whose shares dropped 20% after issuing poor guidance in its latest quarterly release in January; seven downgrades followed shortly thereafter. However, Longbow Research is a new fan of parent company EMC, initiating coverage with a Buy and setting a $30 price target (over 20% away from current levels). EMC is looking to bolster shareholder value with a $1 billion stock buyback program in 2013. Billionaire Andreas Halvorsen of Viking Global made a new purchase worth $117 million as well (read about his portfolio here).
Crown Castle International (NYSE: CCI) was the second biggest of the sixteen purchases made by Maverick, grabbing almost $109 million of the fund’s capital. The company operates and leases communication towers (totaling near 7,100 now after a completed agreement with T-Mobile USA). CCI sees larger profits in its future with the four major cellular networks upgrading to LTE. Analyst firms like Pacific Crest and Evercore Partners have high hopes for the company as well, even after a share price appreciation of 30% in the past twelve months. Billionaire Stephen Mandel of Lone Pine Capital carries almost 2.9 million shares of CCI.
Fidelity National Information Services (NYSE: FIS) received a 1.5% allocation from Maverick, amounting to slightly over $100 million of the fund’s AUM. FIS carries a respectable dividend of 2.3% (recently increased in February); the yield has complemented its trailing twelve month’s gain, besting the market by six percentage points. The bank technology provider completed its purchase of mFoundry at the end of January, a company that provides mobile banking services to the likes of PNC and BofA. FIS saw increased interest from hedge funds going into the end of 2012; out of the hundreds of funds we track, 28 held FIS in Q3 2012, while 35 claimed ownership in Q4. Billionaire Ken Griffin of Citadel Investment Group bumped up his call option position according to his newest 13F.
FleetCor Technologies (NYSE: FLT) took the number four spot in terms of large purchases for Maverick; the fund initiated an almost $100 million position as indicated by its last 13F filing. The commercial payments solution provider nearly doubled in value in the past twelve months; it has grown 31% since the start of this year alone (note that a good portion of that move occurred after the company’s Q4 earnings beat in February). Sell-side analysts are seeing the stock in an overheated zone, as their valuations a year out are lower than where there the stock is currently trading. JP Morgan recently downgraded the stock in January, bumping it from Overweight to Neutral. Billionaire Jim Simons of Renaissance Technologies cut his position by more than half towards the end of 2012.
F5 Networks (NASDAQ: FFIV) develops solutions for managing network traffic, a space that has some stiff existing competition (think Cisco Systems and Juniper Networks). Despite disappointing share performance in the recent past, Wall Street has lofty price targets for FFIV, including one at the $120 mark from Goldman Sachs. The average target of analysts’ sits at a slightly more modest $114, which would mean a hefty return on Maverick’s $84 million investment. Despite delivering a miss with its Q1 2013 earnings announcement in January, FFIV had increased revenues and gross profit year over year. Steven Cohen of SAC Capital Advisors more than doubled his position from Q3 2012 to Q4.
Maverick Capital is one of the best performing hedge funds. Over the last 10 years the fund was able to beat the market by more than 5 percentage points per year with 50% less volatility. Maverick Capital’s new stock picks are an excellent place to look for ideas. EMC is the most popular stock in this group among the 450 hedge funds and prominent investors we are tracking. We also like Crown Castle as a long-term investment candidate.
This article is written by Eric Winter and edited by Meena Krishnamsetty. They don't own shares in any of the stocks mentioned in this article.The Motley Fool recommends F5 Networks. The Motley Fool owns shares of EMC and F5 Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!