Viking Global Investors is a Greenwich, Connecticut-based hedge fund started in 1999 by billionaire Andreas Halvorsen. The fund, one of the 140 Biggest and Most Famous Activist Hedge Funds, invests in both the equity and fixed income markets across the globe, and uses fundamental analysis to make investments in a wide variety of sectors. Halvorsen previously worked at Julian Robertson’s Tiger Management and is one of the most successful “Tiger Cubs”.
Tiger Global is coming off an uncharacteristically down year, as its investors lost 4% net in 2016 according to the fund’s Q4 investor letter. In fact, the Viking Long fund failed to beat the MSCI World Index for the first time since the fund’s inception, gaining 3.9% in 2016 compared to that index’s 5.1% gains. The recent investor letter stated that the fund’s concentrated sector bets did not fare well and that it was “very disappointed by these results”. It has since restructured its stock picking team and plans to invest more money in financial and consumer stocks. Those two sectors accounted for just 5% of the value of the fund’s 13F portfolio on September 30, with that figure rising to over 10% by the end of 2016. In this article, we’ll analyze some of the top holdings and moves of the fund during the fourth quarter.
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Facebook Inc. (NASDAQ:FB) was the top holding of Viking Global on December 31, accounting for almost 10% of the value of the fund’s 13F portfolio. The hedge fund bought an additional 228,753 shares of the stock during the fourth quarter, taking its holding to 18.98 million shares valued at $2.18 billion. Arrowstreet Capital was also bullish on Facebook Inc. (NASDAQ:FB) in Q4, opening a new position of 2.7 million shares valued at $312.5 million. Facebook Inc. (NASDAQ:FB) has been a great bet for investors, returning more than 15% in 2017 and trades at its all-time high price of ~$135 with a market capitalization of $385 billion. Facebook Inc. (NASDAQ:FB) recently reported earning $1.41 per share in the fourth quarter, beating analyst estimates of $1.31. Revenue also rose by 35% year-over-year to $8.81 billion, beating the consensus estimate of $8.5 billion. Facebook recently announced a new video app that will allow users to stream videos in their news feed through set-top boxes.
Viking Global Investors increased its stake in Microsoft Corporation (NASDAQ:MSFT) by 60% during the fourth quarter, to 21.95 million shares valued at $1.36 billion, making it the fund’s third-largest holding at the end of the fourth quarter. Chase Coleman‘s Tiger Global, another former “Tiger Cub”, initiated a new position in Microsoft Corporation (NASDAQ:MSFT) by buying more than 2 million shares worth $131 million during the year-end quarter. Microsoft Corporation (NASDAQ:MSFT) is trading near its all-time highs like many other mega-cap technology stocks and has climbed by 28% over the last year. The company reported adjusted quarterly earnings of $0.83 a share with revenue of $26.07 billion for its fiscal year 2017 second quarter. The results were better than analyst estimates of earnings of $0.79 a share on revenue of $25.28 billion.
We’ll check out three more positions held by Viking Global at the end of 2016 on the next page.