Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus.com
·4 min read

- By James Li

Stanley Druckenmiller (Trades, Portfolio), chairman and CEO of the Duquesne Family Office, disclosed this week that his firm's top six trades during the first quarter included new buys in Citigroup Inc. (NYSE:C) and Palantir Technologies Inc. (NYSE:PLTR), the closure of its Walt Disney Co. (NYSE:DIS) holding and the trimming of its stakes in Microsoft Corp. (NASDAQ:MSFT), T-Mobile US Inc. (NASDAQ:TMUS) and Nuance Communications Inc. (NASDAQ:NUAN).


Druckenmiller managed money for George Soros (Trades, Portfolio) during the 1990s, in which the two partners famously shorted the British pound in 1992. The Pittsburgh-based fund manager takes a macroeconomic approach to investing.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

The fund manager converted his hedge fund into a family office in 2010. As of March 31, Duquesne's $3.89 billion equity portfolio contains 61 stocks with 26 new positions and a turnover ratio of 33%. The top four sectors in terms of weight are technology, consumer cyclical, communication services and basic materials, representing 32.03%, 23.30%, 12.16% and 12.06% of the equity portfolio.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Citigroup

Druckenmiller purchased 2,124,909 shares of Citigroup (NYSE:C), giving the stake 3.98% weight in his firm's equity portfolio. Shares averaged $66.70 during the first quarter; the stock is fairly valued based on Wednesday's price-to-GF Value ratio of 1.01.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the New York-based bank's financial strength 3 out of 10: Although the bank has a high Piotroski F-score of 7, Citigroup's debt ratios underperform more than 76% of global competitors, suggesting high financial leverage.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Gurus with holdings in Citigroup include ValueAct Holdings LP (Trades, Portfolio) and Bill Nygren (Trades, Portfolio).

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Palantir Technologies

Druckenmiller purchased 5,983,992 shares of Palantir Technologies (NYSE:PLTR), giving the position 3.59% weight in the equity portfolio. Shares averaged $27.50 during the first quarter.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the Denver-based data solutions provider's financial strength 6 out of 10: Although the company has a double-digit Altman Z-score, cash-to-debt and debt-to-equity ratios are just in line with industry median ratios.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Walt Disney

Druckenmiller sold 684,335 shares of Walt Disney, discarding the entire stake and 3.34% of the equity portfolio. Shares averaged $184.47 during the first quarter; the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 1.57.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the Burbank, California-based entertainment giant's financial strength 4 out of 10 on several warning signs, which include a low Piotroski F-score of 3, a moderately weak Altman Z-score of 2.24 and interest coverage and debt ratios that underperform over 93% of global competitors.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Microsoft

Druckenmiller sold 509,321 shares of Microsoft (NASDAQ:MSFT), reducing the position by 19.31% and the equity portfolio by 3.05%. Shares averaged $232.23 during the first quarter; the stock is modestly overvalued based on Wednesday's price-to-GF Value ratio of 1.26.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the Redmond, Washington-based software giant's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 and an operating margin that has increased approximately 4.3% per year over the past five years and is outperforming over 98% of global competitors.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

T-Mobile

Druckenmiller sold 750,440 shares of T-Mobile (NASDAQ:TMUS), trimming the position 32.09% and the equity portfolio 2.72%. Shares averaged $125.96 during the first quarter; the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 1.45.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the Bellevue, Washington-based telecommunication company's financial strength 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.19 and interest coverage and debt ratios that underperform more than 73% of global competitors.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

Nuance Communications

Druckenmiller sold 2,163,674 shares of Nuance Communications (NASDAQ:NUAN), slashing 74.31% of the position and 2.57% of the equity portfolio. Shares averaged $46.02 during the first quarter; the stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of 3.56.

Stanley Druckenmiller's Top 6 Trades of the 1st Quarter
Stanley Druckenmiller's Top 6 Trades of the 1st Quarter

GuruFocus ranks the Burlington, Massachusetts-based software company's financial strength 4 out of 10: Although the company has a solid Piotroski F-score of 6 and a good Altman Z-score of 3.79, interest coverage and debt ratios underperform over 89% of global competitors.

Disclosure: No positions.

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This article first appeared on GuruFocus.

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