Navroz Udwadia’s Falcon Edge Capital’s Top Stock Picks

Falcon Edge Capital is a global long/short equity hedge fund, which is managed by Richard Gerson and Navroz D. Udwadia. In its recent 13F filing with the U.S. Securities and Exchange Commission, Falcon Edge Capital disclosed holdings it owned as of the end of the second quarter of 2014. The value of the fund’s equity portfolio increased to $1.8 billion from $1.6 billion in the first quarter. Falcon Edge Capital’s top three stocks for the second quarter include Cheniere Energy, Inc. (NYSEMKT:LNG), SanDisk Corporation (NASDAQ:SNDK) and Avis Budget Group Inc. (NASDAQ:CAR), which account for more than 20% of the fund’s equity portfolio.

Navroz Udwadia - Falcon Edge Capital

In this article, we are going to talk about these Falcon Edge Capital’s top holdings.

Cheniere Energy, Inc. (NYSEMKT:LNG) is holding the top position. Over the quarter, Falcon Edge Capital upped its stake in the company by 13% to 2.37 million shares from 2.11 million shares held previously. The holding is valued at nearly $170 million.

Cheniere Energy, Inc. (NYSEMKT:LNG) is primarily engaged in LNG-related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail Pipeline in Louisiana. It has a market cap of around $20 billion. In July, Cheniere Energy, Inc. (NYSEMKT:LNG) announced that it signed a 20-year LNG sale and purchase agreement with France-based Électricité de France SA (EDF). Under the agreement, EDF agreed to buy approximately 0.38 million tonnes per annum (mtpa) of LNG upon the commencement of operations of Train 2 of the LNG export facility that is being developed near Corpus Christi, Texas, and raising to approximately 0.77 mtpa of LNG upon the commencement of operations of Train 3.

Other funds betting big on Cheniere Energy, Inc. (NYSEMKT:LNG) include Kensico Capital, led by Michael Lowenstein, and Soroban Capital Partners, run by Eric W. Mandelblatt, owning 8.38 million shares and 6.27 million shares, respectively.

SanDisk Corporation (NASDAQ:SNDK) is represented as the second-largest holding, in which Falcon Edge Capital boosted its stake to 1.08 million, worth $112.7 million, from 864,000 shares held previously. SanDisk Corporation’s (NASDAQ:SNDK) second-quarter 2014 financial results overall topped the market consensus. SanDisk Corporation (NASDAQ:SNDK) recorded earnings per share of $1.41 on net income of $274 million and revenues of $1.63 billion, compared to the Wall Steet expectations of $1.39 earnings per share on revenue of $1.60 billion. The company’s earnings per share in the second quarter of 2013 were at $262 million or $1.06 per share.

Amongst the largest shareholders of SanDisk Corporation (NASDAQ:SNDK) include Kensico Capital, led by Michael Lowenstein, which owns 6.51 million, and Rob Citrone’s Discovery Capital Management, which holds 4.13 million shares.

Falcon Edge Capital reduced its stake in Avis Budget Group Inc. (NASDAQ:CAR) by more than 30% to 1.76 million, with a reported value of $104.8 million. Previously, the fund reported ownership of 2.67 million shares. Avis Budget Group Inc. (NASDAQ:CAR) posted strong results for the second quarter of 2014. The company’s revenue rose to $2.2 billion, compared with $2.0 billion the same quarter of 2013.

In its recent 13F, SRS Investment Management, managed by Karthik Sarma, disclosed holding 10 million shares of Avis Budget Group Inc. (NASDAQ:CAR), while John Griffin’s Blue Ridge Capital reported ownership of 6.70 million shares of the company.

Falcon Edge Capital was founded by Richard Gerson in 2012 together with Navroz D. Udwadia and James Minshull. The fund, which was launched with $1.2 billion, returned 28% in 2013. Previously, Gerson interned at Julian Robertson’s Tiger Management and was a founding member of John Griffin’s Blue Ridge Capital. Navroz Udwadia and James Minshull worked at Eric Mindich’s Eton Park Capital.

Disclosure: none