Chris Hansen‘s Valiant Capital had a tough 2013. The fund had double digit losses through October 2013 in a period when the S&P 500 Index was returning close to 25%. Despite these losses, he was still managing more than $2 billion. One reason why Valiant’s investors didn’t run away is the fact that Valiant also makes seed/early stage investments in emerging tech companies and investors can’t get the same exposure elsewhere. At the end of the third quarter Apple Inc. (NASDAQ:AAPL), Anheuser Busch Inbev SA (ADR) (NYSE:BUD), and Priceline Group Inc (NASDAQ:PCLN) were the largest positions in Valiant’s 13F portfolio.
We haven’t received any information regarding Valiant’s 2014 returns. However, the stocks in its 13F portfolio returned less than 8% in 2014, vs. a 13.5% gain for the S&P 500 ETF (SPY). Obviously, 13F portfolio returns are only a proxy for the liquid portion of Valiant’s US portfolio. Valiant invests in private and foreign companies as well. It may also short other stocks. So, its actual returns may be dramatically different from the 8% figure we guesstimated. Let’s take a look at the top 5 positions in Valiant’s portfolio at the end of 2014:
Apple Inc. (NASDAQ:AAPL) is still the largest position in Valiant’s portfolio. The stock returned 10% during the last 3 months of 2014 and today hit its all-time high. Hansen cut his Apple Inc. stake to 1.24 million shares from 1.6 million shares at the end of September. Last week we covered some recent hedge fund activity in Apple Inc. shares and reported on some indications that smart money is cutting their Apple Inc. bets (read the details). However, others remain bullish on the stock, and some are convinced it has nowhere to go but up, up, up, to $150 and beyond, which would bring it close to a market cap of $1 trillion. Yes, trillion.
Much of that potential short-term success will hinge on the Apple Watch, which has been predicted to be everything from a disaster waiting to happen, to the greatest thing since sliced bread. Sales estimates on the smart watch previously ranged as high as 100 million units within the first calendar year after its release, though expectations dipped after its unveiling and much higher than anticipated price point.
Apple Inc. (NASDAQ:AAPL)’s most recent quarterly results blew away expectations, as they reported $74.6 billion in revenue for the quarter, and a net profit of $18 billion, with earnings per diluted share coming in at a robust $3.06. Gross margins and international sales were also highly promising with margins rising to 39.9% from 37.9% during the same year-ago period, and international sales accounting for 65% of the quarter’s revenue as Apple continues to expand and flourish in foreign markets. Apple is up 9.75% in trading since that January 27 earnings report.