Viking Global’s Top Non-Tech Holdings

VIKING GLOBALViking Global is a one of the foremast Tiger Cubs, offshoots of Julian Robertson’s Tiger Management. It was the brainchild of Andreas Halvorsen, David Ott, and Brian Olson. The strategy is long/short global equity with a bottom-up stock picking approach. Below are its top non-tech holdings.

Invesco (NYSE: IVZ) is a global asset management firm with $672.8 billion of AUM as of March 31, 2012. It is among the most global and diversified asset managers out there that has allowed it to effectively scale products like the Invesco Balanced Risk Allocation strategy (ramped up from $5 billion of AUM to about $13 billion in two quarters). The company has reported five straight quarters of positive core business flows in a time when the industry is seeing outflows in actively managed US equities, and we expect that global equities and IBRA will contribute to continued inflows. We feel that management have been effectively managing its capital between investments in US distribution and branding as well as share repurchases/dividend increases—the recently announced annual dividend increase to $0.69 was substantial and generates a 3.2% yield for investors. And from a valuation standpoint, we think it’s very reasonable at 11.5x 2012 P/E.

LyondellBasel Industries (NYSE: LYB) is a global petrochemical company held by Jon Bauer, Christopher Pucillo, Mark McGoldrick, and Jamie Zimmerman. Our view on LYB is largely valuation driven. It trades at ~3.8x times 2013 EV/EBITDA yet has a ~16% 2013 projected FCF yield, and trades below replacement cost. The market is pricing LYB as though there will be a decline in industry profitability in the near-term when in fact, we think it is simply due to an inventory drawdown. We also identify a couple upcoming catalysts. LYB is set to be the next chemical company to become included in the S&P 500 index (timing unknown) and it has infrastructure in place for transport and fractionation of ethane to the gulf. We think ethane prices will move lower down to around $0.40 to $0.50 per gallon as bottleneck issues in fractionation capacity and logistics are solved.

Mastercard (NYSE: MA) With the General Court in Luxembourg ruling against MA’s challenge on an European Commission (EC) ban on cross-border interchange fees, we see more headline risk in MA than Visa. MA is appealing the decision, but either way we do not foresee a negative financial impact to MA since it isn’t a revenue source for the network models. Interchange refers to a fee that merchants pay to the card issuer whereas MA makes money from processing fees. This has been an ongoing back and forth with European regulators since 2007, when the EC felt that MA’s European cross-border interchange fees violated EU competition law. We continue to monitor the situation but are more focused on the merchant lawsuit.

Valeant Pharmaceuticals (NASDAQ: VRX) took a tumble in early May after Q1 results. However, we still think that VRX is among the best companies in the Specialty Pharmaceuticals (Spec Pharma) space.  First off, VRX offers an 8% organic growth spec pharma platform, dramatically better than big pharma players and among the best in the spec pharma group. The company’s organic growth strength showed in its Q1 with its differentiated strategy delivering 11% y-o-y versus 4% for its peers, driven by US dermatology and emerging markets strength. We also view VRX’s diversification very favorably as a way to mitigate risk. About a third of VRX’s revenues come from emerging market countries and only half from the slower growing US market versus ~87% for its spec pharma comps. Additionally, no one product in its portfolio is more than 7% of its revenues. So in conclusion, VRX offers organic growth and diversification far exceeding that of its peers. It’s also cheap from on a relative valuation basis, trading at ~9.5x 2013 earnings versus its ~9.7x for its peers. And at ~9.5x, VRX trades below its historical 11.0x to 14.0x range.

Comments
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!