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Big Changes At The Top of Passport Capital’s Portfolio As Yahoo (YHOO) Takes Top Spot

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Passport Capital is a San Francisco-based global investment firm founded by John H. Burbank III in 2000. The fund’s investment strategy focuses around generating high risk-adjusted returns through macroeconomic analysis, fundamental research conducted on a company-by-company basis, and quantitative resources. Passport Capital carries out top-down analysis instead of focusing merely on asset valuations to identify durable equities. Mr. Burbank is known for the massive profits he made betting against subprime mortgages back in 2007, when his fund was ranked by Barron’s as the top performing fund of the year. He started trading when he was 30 with $50,000 worth of borrowed credit cards and has turned that into a hedge fund that now manages $4 billion in assets as of June 30.

According to Passport Capital’s latest 13F filing, it manages a U.S. equity portfolio with $5.47 billion worth of holdings as of June 30. In this article, we will take a look at Passport Capital’s biggest moves during the second quarter, as revealed by the fund’s 13F filing for the June quarter.

Hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
John Burbank PASSPORT CAPITAL

Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK)

– Shares Owned by Passport Capital (as of June 30): 5.13 million

– Value of Passport Capital’s Holding (as of June 30): $147.08 million

Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK) is the first new addition to Passport Capital’s portfolio that we’ll cover, as the fund acquired about 5.13 million shares of the company during the second quarter, valued at $147.08 million on June 30. In May, Liberty Global acquired Cable & Wireless Communications Plc for $7.4 billion on an enterprise value basis. The company’s plans to set up a Dutch telecommunications giant in a joint venture with Vodafone was also given the green light by European Union antitrust regulators earlier this month, in somewhat of a surprise decision after it was thought the Brexit in late-June could lead to the merger being scuttled. Despite the positive development, Liberty Global’s stock is still down by over 10% year-to-date. First Eagle Investment Management owns 15.19 million shares of Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK) as of June 30.

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Allergan plc Ordinary Shares (NYSE:AGN)

– Shares Owned by Passport Capital (as of June 30): 708,071

– Value of Passport Capital’s Holding (as of June 30): $163.63 million

Passport Capital added a stake of 708,071 shares of the Dublin-based pharmaceutical company to its portfolio during the second quarter. Allergan plc Ordinary Shares (NYSE:AGN)’s stock accounts for about 3% of the value of the hedge fund’s equity portfolio. Investment firm Piper Jaffray reiterated its ‘Neutral’ rating on Allergen, but slashed its price target on the stock to $227 from $236 earlier this month, following the company’s second quarter results, which came in at $3.35 in EPS on $3.68 billion in revenue. The Street had been expecting $3.33 in EPS and much stronger $3.97 billion in revenue. Allergan plc Ordinary Shares (NYSE:AGN)’s stock has lost over 18% of its market value so far in 2016.

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On the next page, we will take a look at Mr. Burbank’s big quarterly moves in General Electric, CF Industries, and Yahoo.

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