Billionaire Stanley Druckenmiller’s Top Picks

Billionaire Stanley Druckenmiller is famous for breaking the Bank of England in 1992, when, together with George Soros, he managed to book a $1 billion profit for Soros’ Quantum fund by shorting the British Pound. Druckenmiller started Duquesne Capital in 1981 and has managed it parallel to his commitments as a consultant to Dreyfus and later as lead portfolio manager for Quantum funds. In 2010 he decided to close Duquesne, returning approximately $12 billion to investors, and turned the fund into a family office. Mr. Druckenmiller is relying heavily on the technology sector heading into 2016, with 39% of his public equity positions comprising tech stocks. He is also heavily invested in the materials sector, which accounts for 30% of Duquesne’s portfolio, and has pledged 19% of his funds to consumer discretionary stocks. At Insider Monkey, we look at the weighted average returns of the long positions a fund indicates in its 13F filings, in companies with a market cap of at least $1 billion, to estimate the returns of the fund’s stock picks in notable stocks. According to this metric, Druckenmiller’s stock picks generated a positive return of 11.4% in 2015, in contrast to Paul Glazer‘s Glazer Capital, which held the same number of notable stocks at the beginning of the fourth quarter, but which only managed a return of 2.8% in 2015. In this article, we’ll analyze Stanley Druckenmiller’s top 5 equity positions on December 31, which, incidentally, are all technology stocks.

At Insider Monkey, we follow the activity of several hundred of the best-performing hedge funds as part of our strategy. We analyze their 13F filings and use the data to see what stocks they are collectively bullish on. Through extensive research we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas (see more details here).

We’ll start with Duquesne Capital’s fifth-largest equity position, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). During the fourth quarter, Druckenmiller boosted his stake in the company by 61%, taking it to 772,300 shares valued at $35.8 million. Billionaire Ken Fisher is also bullish on this stock, having boosted his stake by 118% over the quarter, to 8.84 million shares. Analysts at JP Morgan recently initiated coverage of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) and assigned an ‘Overweight’ rating and price target of $50 per share on the stock, with the price target representing a 21% premium over its closing price on Tuesday. Analysts at Credit Agricole are also optimistic about the prospects of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), having recently upgraded the stock to a ‘Buy’ from ‘Underperform’.

Raytheon Company (NYSE:RTN), a company that specializes in defense and intelligence products and services, represents one of Stanley Druckenmiller’s new positions, which he initiated during the fourth quarter. The billionaire acquired 417,800 shares of Raytheon worth roughly $52 million at the end of December. Raytheon Company (NYSE:RTN)’s stock was a good performer in 2015, having surged by more than 15% over the year. The company also reported better-than-expected financial results for the fourth quarter on January 28. Revenue came in at $6.33 billion while adjusted earnings were $1.93 per share, surpassing analysts’ expectations of $1.79 per share. For the current year, Raytheon Company (NYSE:RTN) is projecting revenue in the range of $24 billion to $24.5 billion and earnings of $6.80-to-$7.00 per share.

Turn the page to find out which three tech giants are Druckenmiller’s favorite stocks.

Microsoft Corporation (NASDAQ:MSFT) is a stock Druckenmiller sought to reduce his exposure to during the fourth quarter, having offloaded 17% of his stake by the end of December. In its latest quarterly 13F filing, Duquesne Capital indicated ownership of 1.16 million Microsoft shares valued at $64.6 million. Ever since Satya Nadella replaced Steve Ballmer as CEO of Microsoft Corporation (NASDAQ:MSFT), the tech giant has focused heavily on its cloud business, establishing itself as a key player in the market. The success on that front was mirrored by the company’s financial performance, having again surpassed market expectations in the fourth quarter. Microsoft Corporation (NASDAQ:MSFT) reported $25.7 billion in revenue and a profit of $0.78 per share, above estimates of $25.2 billion in revenue and earnings of $0.71 per share.

Druckenmiller sees Amazon.com, Inc. (NASDAQ:AMZN) as a great stock to own, having further increased his stake during the fourth quarter. As reported in its 13F filing, Duquesne currently holds 190,000 shares of the e-commerce giant, almost double the amount reported as of the end of September. The battle for cloud-based services between Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOGL) is heating up, with Spotify AB, one of Amazon’s key customers, having decided to move the largest part of its music streaming technology to Google’s Cloud Platform. Amazon.com, Inc. (NASDAQ:AMZN), nevertheless, remains a leader in the cloud business, with giants like Comcast Corporation (NASDAQ:CMCSA) and Samsung Electronics Co. among its customers.

Facebook Inc (NASDAQ:FB) continues to be Druckenmiller’s top equity position but, despite the stake being reduced by approximately 40% over the fourth quarter. As a result, Duquesne Capital now holds 2.53 million shares worth in excess of $264 million. 2015 was a great year for Facebook Inc (NASDAQ:FB) shareholders, with the stock having ended the year up by 35%. Facebook Inc (NASDAQ:FB) ended the year on a high note, having reported revenue of $5.84 billion and earnings of $0.79 per share for the fourth quarter, beating analysts’ estimates of $5.67 billion in revenue and earnings of $0.75 per share.

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