Google Inc (GOOG), Starbucks (SBUX): This Billionaire’s Big Selloffs

Kodiak Oil & Gas Corp (NYSE:KOG) is an explorer and producer of oil and natural gas that appears to be trading a bit rich for Chilton’s tastes. Trading at nearly 40x earnings, Kodiak is trading well above other mid-level explorers Oasis Petroleum (28x) and Northern Oil and Gas (20x); this also holds true on a P/S basis. We see Kodiak’s focused operations as a negative, being heavily reliant on its Williston assets. Another downside, assuming there will be a continued fundamental shift toward natural gas as a key energy source, is that over 85% of Kodiak’s resources are weighted toward oil. In spite of Chilton’s sale, Kodiak saw billionaire Steven Cohen of SAC Capital boosting his stake by 600% last quarter (see Steven Cohen’s key plays from Q3).

Eagle Materials, Inc. (NYSE:EXP) is a diversified materials company that is up over 100% year to date. A bloated valuation could be the reason that Chilton is looking to get out now. The uncertain rebound in the housing market continues to pressure the materials industry and this should continue over the interim. Eagle is well above other major materials companies on a P/S basis at 4.1x, compared to Martin Marietta (1.7x) and Cemex (0.6x) most notably. The fact that Eagle trades at 60x trailing earnings, with a five-year expected earnings CAGR of 8%, should be of concern to investors. Chilton’s selloff was betting against billionaire Jim Simons, who upped his stake 50% last quarter (check out Jim Simons’ top bets).

It appears that there were a few investments that no longer fit Chilton’s long-term focus, including Google, which has seen pressure from its Motorola Mobility acquisition, in addition to the issues discussed above. Beam and Starbucks are both showing strong abilities to grow despite a weak economy, but their relative richness should lead investors to remain cautious. Kodiak also appears to be ahead of itself on a valuation basis, and Eagle has seen a nice run up of late, where Chilton has likely decided to take his profits elsewhere. One of Chilton’s selloffs happens to be one of the top ten tech stocks other hedge funds love (check out all 10).