Have a Look at Teewinot Capital’s Top Picks as Tiger Cub Firm Raises Capital for New Fund

Julian Robertson of Tiger Management, the billionaire hedge fund manager and an early pioneer of the hedge fund industry, has seeded dozens of hedge fund managers, usually referred to as Tiger Cubs. Mr. Robertson has provided seed capital to a number of prominent hedge fund managers such as Chase Coleman of Tiger Global, Andreas Halvorsen of Viking Global and Lee Ainslie of Maverick Capital.

Teewinot Capital Advisers LLC, a New York-based asset manager run by Michael Moriarty, is yet another hedge fund vehicle seeded by hedge fund pioneer Julian Robertson. According to Institutional Investor’s Alpha, the investment firm has raised at least $35 million for a new fund called Teewinot Vista Fund. This move represents a sign that the New York-based asset manager, launched in 2003, has been performing strongly in recent years, while hedge fund clients have been withdrawing capital from other investment vehicles at a high pace in recent months due to disappointing performance. For that reason, Insider Monkey decided to have a look at the top equity holdings within Teewinot Capital’s portfolio as of the end of the first quarter of 2016, as well as discuss the performance of those holdings to date.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

#5. Alphabet Inc. (NASDAQ:GOOGL)

– Shares owned by Teewinot Capital Advisors as of March 31: 8,310

– Value of Teewinot Capital Advisors’ holding as of March 31: $6.34 Million

Teewinot Capital Advisors LLC owned 8,310 Class A shares of Alphabet Inc. (NASDAQ:GOOGL) at the end of the March quarter, 1,420 shares less than at the end of the December quarter. The reduced stake was valued at $6.34 million on March 31 and accounted for 5.2% of the investment’s entire portfolio. Alphabet, which many still refer to as Google, has seen its market value decline by almost 7% since the beginning of 2016. After Microsoft Corporation (NASDAQ:MSFT) announced it was acquiring LinkedIn Corp (NYSE:LNKD) for $26.2 billion in cash earlier this week, many started to think of other possible deals in the technology space. Many believe the search giant could attempt to buy battered social media company Twitter Inc. (NYSE:TWTR), again. Reportedly, Google executives discussed a possible deal with Twitter’s co-founder and current CEO Jack Dorsey back in 2011, but there was no deal after all. Andreas Halvorsen’s Viking Global Investors LP owns 2.05 million Class A shares of Alphabet Inc. (NASDAQ:GOOGL) as of the end of March.

#4. Citigroup Inc. (NYSE:C)

– Shares owned by Teewinot Capital Advisors as of March 31: 156,600

– Value of Teewinot Capital Advisors’ holding as of March 31: $6.57 Million

The New York-based asset manager boosted its Citigroup Inc. (NYSE:C) stake by 15,300 shares during the first quarter of 2016, ending the three-month period with 156,600 shares. The increased stake was worth $6.57 million on March 31 and made up roughly 5.4% of the fund’s portfolio. The financial performance of the four-largest U.S. bank in terms of assets has been impacted by a combination of low interest rates and battered energy industry. For instance, Citigroup’s net income in the first quarter was $3.5 billion, down from $4.8 billion reported a year ago. Meanwhile, the company’s top line decreased 11% year-over-year to $17.6 billion. Citigroup was the only bank of the eight financial institutions required to submit a “living will” to the Federal Reserve that had its resolution plan approved by regulators. Citigroup has seen its market value plunge by 18% so far in 2016. Seth Klarman’s Baupost Group LLC had a massive amount of 102.55 million shares of Citigroup Inc. (NYSE:C) in its portfolio on March 31.

#3. Spirit Airlines Incorporated (NASDAQ:SAVE)

– Shares owned by Teewinot Capital Advisors as of March 31: 200,700

– Value of Teewinot Capital Advisors’ holding as of March 31: $9.63 Million

Teewinot Capital Advisers, seeded by Julian Robertson, increased its exposure to Spirit Airlines Incorporated (NASDAQ:SAVE) by 11,500 shares during the January-to-March period to 200,700 shares. The reshuffled stake was valued at $9.63 million at the end of the March quarter, constituting 7.9% of the fund’s entire portfolio. The shares of the low-cost commercial carrier are up 6% since the beginning of 2016 despite experiencing weakness following the recent shooting at a club in Orlando, which put pressure on the entire airline industry. Earlier this month, Spirit Airlines reported an increase in traffic of 24.8% year-over-year for May, while capacity increased by 24.0% year-on-year. Although the entire airline industry has been hit by worries that passenger demand may not be growing as fast as industry capacity, Spirit Airlines is one of the few carriers releasing impressive traffic figures. Israel Englander’s Millennium Management reported owning 776,170 shares of Spirit Airlines Incorporated (NASDAQ:SAVE) in its latest 13F.

#2. Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS)

– Shares owned by Teewinot Capital Advisors as of March 31: 478,700

– Value of Teewinot Capital Advisors’ holding as of March 31: $10.09 Million

The New York-based asset manager, run by Michael Moriarty, had 478,700 American Depositary Shares (ADSs) of Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) at the end of the first quarter of 2016, 99,300 ADSs less than at the end of the final quarter of 2015. The trimmed position was worth $10.09 million on March 31 and made up 8.3% of the fund’s portfolio. The ADSs of the Mexican ultra-low-cost carrier are down a little less than 1% since the beginning of the year, mainly owing to a drop of nearly 17% in the past month. Controladora Vuela increased capacity, measured in available seat miles, by 15.8% year-over-year in April to meet strong demand in both its domestic and international markets. The company’s management intends to expand seat capacity by roughly 18% in 2016 and 19% in 2017. Moreover, the carrier launched five new year-round domestic routes in April and the company appears to have more growth opportunities ahead. Rob Citrone’s Discovery Capital Management was the owner of 2.95 million ADSs of Controladora Vuela Co Avcn SA CV (ADR) (NYSE:VLRS) at the end of March.

#1. Netflix Inc. (NASDAQ:NFLX)

– Shares owned by Teewinot Capital Advisors as of March 31: 169,000

– Value of Teewinot Capital Advisors’ holding as of March 31: $17.28 Million

Netflix Inc. (NASDAQ:NFLX) was the largest equity holding in Teewinot Capital Advisors’ portfolio at the end of the January-to-March quarter, accounting for 14.3% of the overall value of the entire portfolio. The hedge fund trimmed its Netflix stake by 9,546 shares during the first three months of the year to 169,000 shares, which were valued at $17.28 million on March 31. The world’s leading Internet television network has seen its market capitalization decline by 17% since the start of 2016, mainly due to worries over the company’s profitability, international expansion and competition. However, Netflix added a record number of 6.74 million subscribers during the first three months of 2016, more than the 4.88 million added during the same period of the prior year and more than its own guidance of 6.10 million. The company’s on-demand video streaming service reached a number of 81.50 million subscribers by the end of March, but the company’s guidance of 2.5 million additions for the current quarter might have disappointed investors. Tiger Global Management, founded by Chase Coleman, had roughly 18.00 million shares of Netflix Inc. (NASDAQ:NFLX) in its portfolio on March 31.

Disclosure: None