Julian Robertson's Biggest Trades of the 4th Quarter

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- By Margaret Moran

Julian Robertson (Trades, Portfolio)'s Tiger Management recently disclosed its portfolio updates for the fourth quarter of 2020, which ended on Dec. 31.


Often called the "father of the hedge fund," Julian Robertson (Trades, Portfolio) founded Tiger Management in 1980, turning an initial $8 million into over $22 billion by the late 1990s. After losing 4% in 1998 and 19% in 1999 as rivals rode the dot-com bubble to its peak, he shut down the fund in 2000, and Tiger Management now only manages money from internal sources (mainly Robertson's personal wealth). Robertson's long-short strategy is based on investing in the best companies and shorting the worst companies, and he is known for "betting the farm" on his best ideas. Robertson also mentored a number of young hedge fund managers known as the "Tiger Cubs," a group that includes Andreas Halvorsen (Trades, Portfolio), Chase Coleman (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), John Griffin (Trades, Portfolio), Lee Ainslie (Trades, Portfolio) and Steve Mandel (Trades, Portfolio).

Robertson's top buys for the quarter were 21Vianet Group Inc. (NASDAQ:VNET) and Booking Holdings Inc. (NASDAQ:BKNG), while his biggest sells were Salesforce.com Inc. (NYSE:CRM) and Synchrony Financial (NYSE:SYF).

21Vianet Group

Tiger Management established a new holding worth 67,400 shares in 21Vianet Group (NASDAQ:VNET), impacting the equity portfolio by 0.53%. During the quarter, shares traded for an average price of $26.31.

21Vianet Group is China's largest carrier-neutral internet and data center service provider, with customers such as Internet companies, government entities, blue-chip enterprises and small-to mid-sized enterprises.

On Feb. 17, shares of 21Vianet traded around $40.92 for a market cap of $5.44 billion. According to the GuruFocus Value chart, the stock is a possible value trap, as it is trading too far below its intrinsic value estimates. The company is expected to push for achieving profitability in 2022, and several analysts have sharply decreased their top-line expectations of the company for that year due to the fear that it could be too early for such a move.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

The company has a financial strength rating of 4 out of 10 and a profitability rating of 3 out of 10. The current ratio of 2.24 indicates the company can continue paying its short-term debts, though the Altman Z-Score of 1.85 shows financial stress that puts the company at risk of bankruptcy. The return on invested capital is lower than the weighted average cost of capital, meaning the company is spending more on its investments than it is earning back on them.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Booking Holdings

The guru also invested in 850 shares of Booking Holdings Inc. (NASDAQ:BKNG), which had a 0.43% impact on the equity portfolio. Shares traded for an average price of $1,932.82 during the quarter.

Based in Norwalk, Connecticut, Booking Holdings is a world leader in online travel services, providing booking services for everything from flights and cars to hotels and vacation packages. The company's focus is mainly on the more fragmented European and Asian hotel markets rather than the U.S. market.

On Feb. 17, shares of Booking Holdings traded around $2,233.77 for a market cap of $91.48 billion. The GuruFocus Value chart rates the stock as significantly overvalued.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

The company has a financial strength rating of 5 out of 10 and a profitability rating of 9 out of 10. The cash-debt ratio of 0.92 is better than 61% of other companies in the industry, while the Altman Z=Score of 5.77 indicates a fortress-like balance sheet. The ROIC is consistently higher than the WACC, meaning the company is creating value for shareholders.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Salesforce.com

The guru sold out of the 54,000-share investment in Salesforce.com (NYSE:CRM), impacting the equity portfolio by -3.86%. During the quarter, shares traded for an average price of $243.02.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Salesforce is a subscription-based cloud software company headquartered in San Francisco. It provides corporate customers with market-leading sales, marketing, customer relationship management, analytics and application development tools.

On Feb. 17, shares of Salesforce traded around $247.66 for a market cap of $227.07 billion. The GuruFocus Value chart rates the stock as modestly overvalued.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

The company has a financial strength rating of 6 out of 10 and a profitability rating of 5 out of 10. The Piotroski F-Score of 6 out of 9 and Altman Z-Score of 7.92 show the company has a very good financial situation. Despite this, the company's WACC consistently surpasses its ROIC, meaning its growth is not profitable.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Synchrony Financial

Tiger Management reduced its Synchrony Financial (NYSE:SYF) position by 66,100 shares, or 88.49%, leaving a remaining investment of 8,600 shares. The trade had a -0.50% impact on the equity portfolio. Shares traded for an average price of $30.11 during the quarter.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Synchrony Financial is a consumer financial services company based in Stamford, Connecticut. It provides traditional consumer banking products, as well as customized financing programs across industries such as retail, health, auto, travel and home.

On Feb. 17, shares of Synchrony traded around $37.47 for a market cap of $21.88 billion. The GuruFocus Value chart rates the stock as fairly valued.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

The company has a financial strength rating of 3 out of 10 and a profitability rating of 5 out of 10. The Piotroski F-Score of 5 out of 9 indicates the company is financially stable. The return on equity of 10.53% is outperforming 73% of peers, though the return on assets of 1.41% is about average for the industry.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Portfolio overview

During the quarter, Tiger Management established nine new holdings, sold out of another nine stocks and added to or reduced several other positions for a turnover rate of 4%. As of the quarter's end, Tiger Management held shares of 40 stocks in an equity portfolio valued at $441 million.

The firm's top holdings were Adaptive Biotechnologies Corp. (NASDAQ:ADPT) with a 14.96% portfolio weight, AerCap Holdings NV (NYSE:AER) with 14.61% and Facebook Inc. (NASDAQ:FB) with 9.31%. In terms of sector weighting, the firm was most invested in technology, industrials and communication services.

Julian Robertson's Biggest Trades of the 4th Quarter
Julian Robertson's Biggest Trades of the 4th Quarter

Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.

Read more here:

  • Sarah Ketterer's Top 4th-Quarter Trades

  • Diamond Hill Capital Trades Citigroup for Bank of America

  • First Pacific Advisors' Biggest Trades of the 4th Quarter



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This article first appeared on GuruFocus.

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