Andreas Halvorsen’s Newest Stock Picks

VIKING GLOBALTiger Cub Andreas Halvorsen has achieved significant success since leaving Julian Robertson’s hedge fund to co-found Viking Global in 1999. The fund recently filed its 13F, disclosing many of its long equity positions from the end of September. Read on for our quick take on Viking’s five largest positions reported on the 13F and compare them to previous filings.

Viking’s top pick was News Corp (NASDAQ:NWSA), with 31 million shares. News Corp plans to split into two smaller companies, and the general consensus is that this division will create shareholder value. Spinouts are often attractive investments because the management of the spun-out company can better focus on its core operations (read more about why investors like spinouts), and a breakup is a very similar corporate situation. This also explains why News Corp currently trades at 21 times trailing earnings- ordinarily that would be high, but we could see combined earnings from the two child companies bring considerably higher than what the company is currently doing. We’d wait to make any moves before getting more information on the split.

The fund also liked Apple Inc. (NASDAQ:AAPL), which once again topped our list of the most popular stocks among hedge funds for the third quarter of the year (see the full rankings). Apple’s stock price has dropped in the last couple weeks, and it now carries a trailing P/E of 12. Even if Apple’s growth rate slows- which would be reasonable for such a large company- it seems undervalued at that multiple. Viking actually increased its stake in Apple over the course of the quarter, closing September with 1.1 million shares in the fund’s portfolio.

Visa Inc (NYSE:V) was another of Halvorsen and his team’s top picks with the fund reporting a position of 5.3 million shares. Visa’s stock is up over 50% in the last year as credit card stocks in general have done well; the growth rate of earnings has been even higher than that, with net income 89% higher last quarter than in the same period in 2011. Wall Street analysts expect continued growth, and consensus for the current fiscal year (which ends in September 2013) implies a P/E multiple of 20. At that pricing the company would have to continue seeing high growth, and we’d advise investors to look at other credit card companies.

Viking bought shares of QUALCOMM, Inc. (NASDAQ:QCOM) during the quarter as well, increasing its stake by 54%. At a market capitalization of $106 billion, its trailing and forward P/Es are 18 and 13, respectively. The communications equipment company experienced double-digit growth rates in revenue and earnings in its most recent quarter compared to the same period in the previous year, and that combination of growth and value looks attractive. We might take a closer look at Qualcomm in the near future, as it appears that the company could be cheap.

Halvorsen moved heavily into Time Warner Inc. (NYSE:TWX), with the 2.7 million shares Viking had owned at the beginning of July becoming 13.5 million shares by the end of September. Time Warner Inc. owns properties such as HBO, Sports Illustrated, and New Line Cinema in addition to Time and Warner Brothers. Its business has been about flat- in the third quarter, neither revenue nor earnings changed more than 5% from a year earlier- though the stock price is up about 35%, easily outperforming the market. With a trailing P/E multiple in the teens, we think that it needs more growth to justify its valuation.

It looks to us like Viking really likes media stocks right now- News Corp we would be able to explain away as a special situation, but ramping up its stake in Time Warner makes two media companies among its top five picks. However, we’re more interested in its tech picks of Apple and Qualcomm and think those would be better for investors to investigate.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!