John Burbank and Passport Capital’s Amazingly Successful New Stock Picks

Passport Capital’s John Burbank is famous for having predicted the subprime crisis. Passport’s flagship fund returned 219% in 2007. Burbank bet against the US housing market at the end of 2005. He was very skeptical about US equities so he also invested in emerging markets and commodities. These bets backfired in 2008. In a matter of few months, his funds lost more than 50%. Passport I, L.P. gained 23% in 2005, 14% in 2006, 220% in 2007, and then lost 51% in 2008. Burbank trailed the S&P 500 index in 2009, returning only 19%. In 2010, Passport Capital returned 18.3%, beating the SPY.

John Burbank PASSPORT CAPITAL

Burbank maintains a long bias in his portfolios as one can guess from his returns. Instead of investing in highly liquid and well-researched developed markets, he prefers investing in under-researched companies in fast growing developing markets. This helped Burbank achieve 23% annual returns since 2000.  This is how Passport describes its investment focus:

“Passport Capital LLC is a San Francisco based, global investment firm founded by John H. Burbank III in 2000. The firm manages approximately $4.1 billion in assets.  Passport’s investment process uses a combination of macroeconomic analyses to develop major themes and rigorous fundamental research on individual companies to create global portfolios.  The firm’s investment team focuses on the following areas: Agriculture, Basic Materials, Consumer, Energy, Financial Services, Healthcare, India & Capital Markets, Internet / Technology, and Middle East & North Africa.”

During the fourth quarter Burbank started using put options on several SPDR sector ETFs, including Materials, Retail, and Industrials. He also shorted MSCI Emerging Market ETF (EEM), Powershares’ QQQQ, Russell 2000 ETF (IWM), and SPY using put options. It’s clear Burbank uses put options on the broad market indices and sector ETFs to hedge his positions.

Insider Monkey, your source for free insider trading data, will compare Burbank’s 13F portfolio returns to his actual returns.

Burbank’s biggest new stock purchase is a $81 Million Apple (AAPL) position initiated by using call options. With this purchase, he joins Lee Ainslie, David Einhorn, George Soros,  Jim Simons, Dan Loeb, Andreas Halvorsen, Joseph DiMenna, Chase Coleman, Stephen Mandel, Barry Rosenstein, and Craig Effron. John Burbank also initiated a $61 Million Cisco (CSCO) position using stocks and call options. David Tepper’s Appaloosa and Leon Cooperman’s Omega Advisors are other hedge funds with Cisco positions.

Here are Burbank’s other large new or significantly increased positions:

Company Ticker Return Value (Million)
UNITED STATES STEEL CORP X 8.5% 80
CYTEC INDUSTRIES INC CYT 8.2% 73
APPLE COMPUTER INC AAPL 12.6% 51
MONSANTO CO MON 5.2% 45
WENDY’S/ARBY’S GROUP INC-A WEN 8.2% 37
ATMEL CORP ATML 27.5% 34
BARCLAYS BK PLC BCS 29.2% 31
HANSEN NATURAL CORP HANS 9.5% 30
BLACKROCK INC BLK 7.7% 30
MASTERCARD INC-CLASS A MA 13.6% 29
TRANSOCEAN LTD. RIG 15.8% 28
ROCKWELL AUTOMATION INC ROK 27.4% 27
POTASH CORP POT 19.9% 25
ALCON INC ACL 0.9% 22
VIACOM INC-CLASS B VIA 13.1% 22
VULCAN MATERIALS CO VMC 2.4% 22
CHEMTURA CORP CHMT 9.6% 21
CISCO SYSTEMS INC CSCO -8.2% 21
VODAFONE GROUP PLC-SP ADR VOD 12.1% 20
SANDRIDGE ENERGY INC SD 22.5% 20
WATSON PHARMACEUTICALS INC WPI 9.3% 20
CLIFFS NATURAL RESOURCES INC C CLF 19.2% 19
SUNCOR ENERGY INC SU 15.1% 19
DENDREON CORP DNDN -2.5% 19
ANHEUSER-BUSCH INBEV SPN ADR BUD -3.7% 19
ALLERGAN INC AGN 9.0% 19
RESEARCH IN MOTION RIMM 17.6% 18

 

John Burbank’s new stock purchases performed spectacularly, returning 11.5% vs. SPY’s 6.4% since the end of December.

Thirteen of his top fourteen picks managed to beat the SPY, which is very impressive. He has a lot of underfollowed stocks in his portfolio. One popular stock in his portfolio is Potash. David Einhorn’s Greenlight, Thomas Steyer’s Farallon Capital, Jim Simons’ Renaissance, Dan Loeb’s Third Point, Andreas Halvorsen’s Viking Global, Richard Perry’s Perry Capital, and Mohnish Pabrai have large Potash investments.

We are also curious about the performance of John Burbank’s top 30 long positions. Here are his top stock holdings:

Company Ticker Return Value (Million)
UNITED STATES STEEL CORP X 8.5% 80
CYTEC INDUSTRIES INC CYT 8.2% 73
CISCO SYS INC CSCO -8.2% 61
APPLE COMPUTER INC AAPL 12.6% 51
SUNCOR ENERGY INC SU 15.1% 50
CLIFFS NATURAL RESOURCES INC CLF 19.2% 49
MONSANTO CO MON 5.2% 45
WENDY’S/ARBY’S GROUP INC-A WEN 8.2% 37
ATMEL CORP ATML 27.5% 34
WALTER INDUSTRIES INC WLT -0.8% 32
BARCLAYS BK PLC BCS 29.2% 31
HANSEN NATURAL CORP HANS 9.5% 30
BLACKROCK INC BLK 7.7% 30
MASTERCARD INC-CLASS A MA 13.6% 29
TRANSOCEAN LTD. RIG 15.8% 28
ROCKWELL AUTOMATION INC ROK 27.4% 27
CUMMINS INC         COM CMI 1.1% 25
POTASH CORP POT 19.9% 25
ALCON INC ACL 0.9% 22
VIACOM INC-CLASS B VIA 13.1% 22
VULCAN MATERIALS CO VMC 2.4% 22
AK STEEL HOLDING AKS 3.2% 21
CHEMTURA CORP CHMT 9.6% 21
VODAFONE GROUP PLC-SP ADR VOD 12.1% 20
SANDRIDGE ENERGY INC SD 22.5% 20
WATSON PHARMACEUTICALS INC WPI 9.3% 20
HSN INC HSNI -2.2% 19
DENDREON CORP DNDN -2.5% 19
ANHEUSER-BUSCH INBEV SPN ADR BUD -3.7% 19
ALLERGAN INC AGN 9.0% 19

 

Burbank’s top 30 stock holdings returned 9.8% so far in 2011, vs. SPY’s 6.4%. Fifteen of his top 20 holdings managed to beat the SPY. It seems Burbank’s focus on under-researched companies is paying off handsomely.

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

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

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!