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Billionaire Andreas Halvorsen Scores Big With Small-Cap Stocks

Viking Global Investors is a hedge fund working with pooled investment vehicles on a global level. The company was founded in 1999 by Andreas Halvorsen, an M.B.A. of the Stanford Graduate School of Business, and is headquartered in Greenwich, Connecticut. With an equity portfolio valued at $25.81 billion as of the latest 13F reporting period, ended March 31, the fund has 27%, 16%, and 11% of its portfolio invested in healthcare, information technology, and finance, respectively. In this article, we’ll look at Halvorsen’s top small cap picks heading into the second quarter, which are Qunar Cayman Islands Ltd (NASDAQ:QUNR), XPO Logistics Inc (NYSE:XPO), Wayfair Inc (NYSE:W), and Esperion Therapeutics Inc (NASDAQ:ESPR).

Andreas Halvorsen

We track hedge funds and prominent investors because our research has shown that their best stock picks (their small-cap picks) outperformed the market historically. Investors would have outperformed the market by nearly a percentage point per month on average between 1999 and 2012 by simply buying the 15 most popular small-cap stocks among hedge funds, despite the fact that 13F filings are delayed up to a maximum of 45 days (read more details here). We have been tracking the performance of these stock picks in real time since the end of August 2012 when our small-cap strategy went live and the results have been exactly as our research predicted: these stocks have delivered a cumulative return of 139% since then vs. a gain of less than 60% for the S&P 500 ETF (SPY).

Qunar Cayman Islands Ltd (NASDAQ:QUNR) is a search-based commerce platform for the travel industry in China. At the end of the first quarter of 2015, Halvorsen’s fund held some 1.01 million shares of Qunar Cayman Islands Ltd (NASDAQ:QUNR) valued at $41.68 million. Halvorsen had added Qunar Cayman to his equity portfolio during the fourth quarter of last year and as the stock jumped by over 45% during the first quarter, he picked some profits by trimming the stake by 30% on the quarter.

Halvorsen’s next small cap pick was XPO Logistics Inc (NYSE:XPO). At the end of the first quarter, the firm held over 870,000 shares of XPO Logistics Inc (NYSE:XPO) for a value of $39.67 million. XPO Logistics, Inc. is a provider of transportation logistics services and a provider of engineered, technology-enabled contract logistics. It’s a $4 billion market cap company that operates under 2 business lines: transportation and logistics. Shares gained ground amid its acquisition of Bridge Terminal Transport Services.  Other notable investors holding shares of the company are Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates. Shares of XPO are up 23% year-to-date.

Wayfair Inc (NYSE:W) was another solid pick for Halvorsen. At the end of the first quarter, Viking Global held 1.13 million shares, valued at $36.44 million, making him the largest investor out of the funds we track. Wayfair Inc (NYSE:W) is a $2.5 billion market cap online home retailer, which aims to be the one-stop shop for all home products. In 2014, its total revenues reached $1.3 billion and the website boasted 3.2 million active customers. Other investors that disclosed holding shares of Wayfair in their latest 13F filings are George Soros’ Soros Fund Management and James Crichton’s Hitchwood Capital Management. Wayfair’s stock is up almost 50% year-to-date.

Last, but not least is Esperion Therapeutics Inc (NASDAQ:ESPR), whose stock has gained 155% since the beginning of the year, being caught in the middle of the biotech bubble. Esperion Therapeutics Inc (NASDAQ:ESPR) is a $2.3 billion biopharmaceutical company focused on the research, development and commercialization of therapies for the treatment of patients with bad cholesterol and other heart-related problems. At the end of the last quarter, Viking Global held almost 137,000 shares of Esperion, valued at $12.67 million. Esperion Therapeutics represents a new position for Viking Global and the fund doesn’t even crack the top five shareholders in our database. That list is headed by Dennis Purcell’s Aisling Capital and Jacob Gottlieb’s Visium Asset Management.

Disclosure: None

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