Billionaire Stan Druckenmiller‘s family office, disclosed an equity portfolio valued at some $1.02 billion as of the end of 2014, representing a significant growth of 25.1%. The equity portfolio is mainly invested in Consumer Discretionary (30.9%), Health Care (30.3%), and Financials (13.4%) stocks. Duquesne Capital’s last 13F filing showed that the fund raised its exposure towards consumer discretionary and industrials stocks, but Mr. Druckenmiller reduced his holdings in the energy and materials sector. Among 10 largest holdings from Duquesne Capital’s equity portfolio (which amass 55.35% of the total portfolio value), some companies represent long-term bets. Among these companies are Alcoa Inc (NYSE:AA), Illumina, Inc. (NASDAQ:ILMN) and Workday Inc (NYSE:WDAY).
In this article we will look into Mr. Druckenmiller’s long-term picks held throughout 2014. These companies are large-cap stocks, which is obvious to see why, since the majority of most popular stocks among the hedge funds that we track are represented by large-cap companies. However, mimicking the activity of these funds by investing in their large-cap picks is not the best strategy for retail investors, since our tests of a portfolio consisting of 50 most popular picks among hedge funds underperformed the market by 7.0 basis points per month between 1999 and 2012. On the other hand small-cap picks have a better chance of helping an investor to beat the market, since our small-cap strategy returned 132% since the end of August 2012 until March 2015.
At the end of 2014, Illumina, Inc. (NASDAQ:ILMN) represented the second-largest holding in terms of value. Duquesne Capital holds 410.100 shares of the company valued at $75.7 billion. The fund initiated a position with 506.700 shares during the third quarter of 2013. Meanwhile, the stock surged by 16.3% during the fourth quarter.
Illumina, Inc. (NASDAQ:ILMN) has posted results for its fourth-quarter of fiscal 2014, ended December 31, 2014. Revenue increased by 32.28% in the fourth quarter when compared to the same quarter one year prior. Further, the net income increased by 90.02% when compared to the same quarter one year before, to $153.28 million from $80.66 million. Along with this, earnings per share (EPS) have significantly increased in the fourth quarter of 2014 from the same quarter of fiscal 2013, to $1.03 from $0.56.
We must mention that the company has a diversified and attractive portfolio. Further, it focuses on new products, taking advantage in an era of technology advances, which constantly pushes down costs. In addition, strategic moves are part of management´s action. Illumina, Inc. (NASDAQ:ILMN) has formed a strategic alliance with Merck Serono, the biopharmaceuticals business of Germany’s Merck KGaA. For the upcoming future, we can expect a higher demand for the company´s products, which represents a long-term growth opportunity to continue its market leadership.
Several investors reported long positions in the company. Andreas Halvorsen and Samuel Isaly are two prominent investors in Illumina, Inc. (NASDAQ:ILMN), holding 8.29 million shares and 1.47 million shares respectively.
Alcoa Inc (NYSE:AA) is next on the list with Duquesne Capital holding 1.88 million shares, down by 54% on the quarter; the value of the stake amounts to $29.61 million. The investor initiated a stake in Alcoa Inc (NYSE:AA) in the fourth quarter of 2013. It is important to mention that the stock gained about 48.5% during 2014. Despite this, Mr. Druckenmiller has reduced his position in this stock during the past year, so probably he has collected some profits due to the stock price appreciation.
Alcoa focuses on the aerospace end market and this is supported by the recent announcement that it had acquired RTI International Metals, a titanium and specialty metal products supplier.
The largest shareholder of Alcoa Inc (NYSE:AA) is William B. Gray’s Orbis Investment Management, which reduced its stake by 13% on the quarter to 22.62 million shares held as of the end of 2014.
Next in line is Workday Inc (NYSE:WDAY), which represented Duquesne’s fourt-largest holding in terms of value at the end of the fourth quarter of 2014. The fund upped its stake by 49% to 330,679 shares, the value of the stake amounting to $26.99 million. However, Workday Inc (NYSE:WDAY)’s stock lost almost 2% in 2014.
Christopher Lord’s Criterior Capital is the largest investor in Workday Inc (NYSE:WDAY) as it reported holding 2.47 million shares, up by 4% on the quarter. This position represents a significant portion of Mr. Lord’s portfolio, reaching 7.55% of the total value.
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