Billionaire John Griffin founded Blue Ridge Capital 20 years ago, after working as Julian Robertson’s number two for years. The “Tiger Cub” is a value-oriented investor who has proven quite successful over time. As per Insider Monkey’s data, Mr. Griffin’s long equity stakes returned an average of 0.76% per month between 1999 and 2012 – outperforming the S&P 500’s 0.32% average monthly rise. Moreover, the firm’s top-five large-cap stock positions – in companies with a market capitalization of $20 billion or more, generated a weighted average monthly return of 0.84% during this period. So, let’s take a closer look at the investor’s top large-cap stakes as of September 30, in order to find out which stocks he considers worthy of support.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
Canadian Pacific Railway Limited (USA) (NYSE:CP)
– Shares Held by Blue Ridge Capital (as of September 30): 1.69 Million
– Value of the Holding (as of September 30): $258.29 Million
Let’s start with Canadian Pacific Railway Limited (USA) (NYSE:CP), which saw Blue Ridge Capital acquire 400 shares over the third quarter, as the stock recuperated from its late-June lows. Also long the stock was Andreas Halvorsen’s Viking Global, which last disclosed ownership of 3.59 million shares, or more than half a billion dollars in stock, and another 30 funds among those we keep track of.
Shares of Canadian Pacific Railway Limited (USA) (NYSE:CP) are up 17.6% year-to-date. However, they are roughly flat quarter-to-date, as concerns about pricing power, carloads and revenue per carload continue to arise – although many analysts now believe a rebound in coal prices could help the company recuperate in these areas. Having said this, it should be noted that the stock trades at almost 20 times its earnings, at a premium to its industry. On the other hand, a dividend yield above 1% makes it an attractive option for dividend investors.
Allergan plc Ordinary Shares (NYSE:AGN)
– Shares Held by Blue Ridge Capital (as of September 30): 1.25 Million
– Value of the Holding (as of September 30): $290 Million
Next up is Allergan plc Ordinary Shares (NYSE:AGN), a stock to which Blue Ridge boosted its exposure by 80% over the third quarter. Also increasing its participation in the company between July and September, inclusive, was William Von Mueffling’s Cantillon Capital Management, which held 986,550 shares after a 35% surge in its stake.
Allergan plc Ordinary Shares (NYSE:AGN)’s stock has tumbled almost 39% since January, and 17.3% since the fourth quarter started. However, going into the fourth quarter, 115 hedge funds in our database seemed to be expecting a recuperation. Moreover, in a recent research note, analysts at Argus also said they believed the stock would rebound on the back of strong new product sales and a promising pipeline.