Billionaire Stanley Druckenmiller Betting on Three High-Growth Stocks and Two Strong Banking Stocks

Billionaire Stanley Druckenmiller, founder of the legendary hedge fund Duquesne Capital Management, is widely-known for his brilliant British pound short that “broke the Bank of England”. Druckenmiller worked for Soros Fund Management from 1988 until 2000, and was the one who came up with the idea of shorting the pound, pitching it to George Soros. For those interested in currency trading, the billionaire investor is currently shorting the EUR-USD currency pair. Earlier this month, the reputable investor expressed his concerns over the monetary policy pursued by the Federal Reserve at the DealBook Conference. The billionaire investor also said that he bets on high-growth companies even though he doesn’t see himself as being bullish on the market. In fact, he claimed that “I could see myself getting very bearish”. This can easily be observed by closely examining his 13F filing for the September quarter, during which his family office sold out of 18 positions and reduced its holdings in an additional six stocks. Moving on to the underlying purpose of this article, we are now going to discuss the top stock picks of Stanley Druckenmiller at the end of the third quarter.

Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 53 percentage points, returning 102% (read the details here). Follow the smart money into only their best investment ideas all while avoiding their high fees.

#5 Amazon.com Inc. (NASDAQ:AMZN)

 – Shares Owned by the Duquesne Capital (as of September 30): 97,300

– Value of Holding (as of September 30): $49.81 Million

Amazon.com Inc. (NASDAQ:AMZN) represents a new addition to Stanley Druckenmiller’s equity portfolio. Duquesne Capital acquired a 97,300-share stake in the company, which was valued at $49.81 million at the end of September. Shares of Amazon have gained 115% since the beginning of the year, and the billionaire investor did not shy away from expressing his admiration for the company. “I love Amazon. They are investing on the future”, said Druckenmiller at the recently-held DealBook conference, which Insider Monkey attended. During the third quarter, Amazon significantly expanded its technology infrastructure, thanks to the fast-growing appetite for Amazon Web Services’ (AWS) offerings. The international e-commerce and web services have been growing globally at a high pace, but it is highly unlikely that the strengthening competition will threaten Amazon’s dominant position. Tiger Global Management, founded by Tiger Cub Chase Coleman, lifted its stake in Amazon.com Inc. (NASDAQ:AMZN) by 2.45 million shares during the third quarter, holding a 3.19 million-share position as of September 30.

#4 Wells Fargo & Co (NYSE:WFC)

– Shares Owned by the Duquesne Capital (as of September 30): 1.19 Million

– Value of Holding (as of September 30): $61.05 Million

The multi-billion dollar family office cut its position in Wells Fargo & Co (NYSE:WFC) by 490,500 shares during the turbulent third quarter, which marks a decrease of roughly 29% quarter-over-quarter. The diversified, community-based financial services company has had a great fourth quarter in terms of stock performance thus far, with its shares gaining 9% since the end of September. Wells Fargo’s credit quality remained quite strong in the third quarter, as the company’s losses continued to be at very low levels, while its non-performing assets declined for the 12^th-straight quarter. The financial services company reported third quarter net income of $5.8 billion, up from $5.7 billion reported for the same quarter of last year. It is also worth mentioning that Well Fargo’s shares are currently trading at a cheap price-to-earnings ratio of 13.45, which compares with a mean of 22.70 for the S&P 500 Index. Warren Buffett’s Berkshire Hathaway is by far the largest stockholder of Wells Fargo & Co (NYSE:WFC) at the end of the third quarter, holding a massive stake of 470.29 million shares.

#3 HDFC Bank Limited (ADR) (NYSE:HDB)

– Shares Owned by the Duquesne Capital (as of September 30): 1.00 Million

– Value of Holding (as of September 30): $61.31 Million

Duquesne Capital’s position in HDFC Bank Limited (ADR) (NYSE:HDB) remained untouched during the latest quarter. The second-largest private sector bank in India by assets has seen its shares gain slightly over 13% in 2015. Furthermore, the stock is up by nearly 80% over the past two-year period, which reflects the underlying growth generated by the bank over the years. HDFC Bank’s fiscal second quarter net revenue reached $1.4 billion, which denotes an increase of roughly 22% year-over-year. Its net interest income came to $1 billion for the quarter that ended September 30, compared with $845 million reported last year. Ken Fisher’s Fisher Asset Management reported owning 7.22 million shares of HDFC Bank Limited (ADR) (NYSE:HDB) via its most up-to-date quarterly filing.

#2 Microsoft Corporation (NASDAQ:MSFT)

– Shares Owned by the Duquesne Capital (as of September 30): 1.39 Million

– Value of Holding (as of September 30): $61.48 Million

Stanley Druckenmiller’s family office reduced its position in Microsoft Corporation (NASDAQ:MSFT) by a mere 9,100 shares in the stormy third quarter. Microsoft has managed to perform quite strongly in the dynamic and highly-competitive market for software and cloud-based services. It shares are 17% in the green year-to-date, while several financial services firms and analysts believe the stock can go even higher. The technology giant’s third quarter revenue decreased year-over-year to $20.38 billion from $23.20 billion, mainly owing to the company’s strategy overhaul for the Windows Phone business. Even so, Microsoft’s diluted earnings per share grew to $0.57 from $0.54 reported for the same quarter a year ago. Jeffrey Ubben’s ValueAct Capital holds a 75.27 million-share position in Microsoft Corporation (NASDAQ:MSFT) as of the end of the third quarter.

#1 Facebook Inc. (NASDAQ:FB)

– Shares Owned by the Duquesne Capital (as of September 30): 4.09 Million

– Value of Holding (as of September 30): $367.99 Million

Facebook Inc. (NASDAQ:FB) was the largest equity holding of Duquesne Capital at the end of the September quarter. The family office increased its exposure to the tech giant by 2.22 million shares, while the overall position accounted for 31.29% of the firm’s portfolio on September 30. Facebook has seen its stock gain 36% since the beginning of the year, and the company’s recently-disclosed financial figures can surely justify this performance. When analyzing a potential investment in Facebook, most investors tend to look at the social platform’s daily active users. The logic is quite straightforward and simple: this metric impacts Facebook’s top-line and other figures by influencing the number of ads the company is showing. Facebook’s average number of daily active users in September was 1.01 billion, which was up by 17% year-over-year. Meanwhile, Facebook’s third quarter financial figures point to the company’s success in capitalizing on the shift to mobile, which also includes the expansion of ads on Instagram. Stephen Mandel’s Lone Pine Capital upped its holdings in Facebook Inc. (NASDAQ:FB) by 940,537 shares during the recent quarter, to 10.70 million shares.

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