Billionaire investor Stanley Druckenmiller is the founder and CEO of the Duquesne Family Office. Druckenmiller is one of the all-time great investors, which is evidenced by the fact that he managed money for George Soros between 1988 and 2000 before starting his own fund Duquesne Capital. He closed the fund with an AUM of $12 billion in 2010 because he felt unable to deliver high returns for his clients.
Druckenmiller is positive about economic growth in the U.S, as he believes that major corporate tax reform under Trump’s presidency could accelerate this growth. Druckenmiller had reversed his bullish position on gold after the Presidential elections but is once again positive on the precious metal. In a recent interview, he said “I wanted to own some currency and no country wants its currency to strengthen. Gold was down a lot, so I bought it”. Duquesne Family Office had a 13F portfolio valued at more than $1 billion at the end of 2016, with the financial sector accounting for more than 42% of that value.
In this article, we’ll look at some of Duquesne Family Office’s major moves made during the fourth quarter of 2016. For further reading on money managers, don’t miss the list of the 140 biggest activist hedge funds.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see the details here).
Duquesne Family Office took a stake in Halliburton Company (NYSE:HAL) during the fourth quarter, purchasing 1 million shares worth $56 million. This made it the fourth-largest 13F position of the fund, accounting for 5.49% of its portfolio’s value at the end of 2016. Ken Griffin‘s Citadel Advisors was also quite bullish on Halliburton in Q4, buying 3.17 million shares to hike its position to 3.75 million shares. Halliburton Company (NYSE:HAL) has seen its stock price double over the last year thanks to a recovery in crude oil prices. For the December quarter, Halliburton Company (NYSE:HAL) reported $4 billion of revenue and adjusted earnings of $0.04 per share, beating the bottom-line consensus of a loss of $0.02 a share, while revenue was in-line. The company is expected to do well under the new Republican administration, which is expected to boost the development of the oil and gas sector in North America.
Citigroup Inc. (NYSE:C) was another addition to the family office’s 13F portfolio in the final quarter of 2016, as it bought 927,100 shares of the company worth $55 million. Cliff Asness’ AQR Capital Management was also bullish on the stock, buying more than 1 million shares to increase its position to 3.38 million shares. Citigroup Inc. (NYSE:C) has performed incredibly well, returning more than 50% to investors over the last year and currently has a market value of $174 billion. 17 out of the 31 analysts covering the stock have rated it a ‘Buy’, while only 3 analysts rate it as a ‘Sell’. The financial services sector should do well in the near term, as Donald Trump has vowed to drastically reduce the regulations (Dodd-Frank Act) hampering the growth of the sector.
On the second page of this article we’ll look at three more moves executed by Duquesne Family Office in Q4.
Software provider Aspen Technology, Inc. (NASDAQ:AZPN) was Duquesne Family Office’s second biggest tech purchase during the fourth quarter, as the fund bought 207,900 shares of the company worth $11.4 million. Israel Englander‘s Millennium Management was also bullish on the stock, taking a new position of 156,126 shares valued at $8.5 million. Aspen Technology, Inc.(NASDAQ:AZPN) reported adjusted earnings of $0.52 per share for the fourth quarter, beating the consensus of $0.46. Revenue of $119.9 million also beat the consensus estimate of $118.33 million. The stock is up by 4% in the 2017 and trades near its 52-week high of ~$57.
Duquesne Family Office sold its entire stake of 470,000 shares of Alibaba Group Holding Ltd. (NYSE:BABA) during the fourth quarter. Alibaba Group Holding Ltd. (NYSE:BABA) is the world’s second-largest online retailer with a market value of $249 billion. The stock has risen sharply in 2017, by 14%, and has returned 65% over the last year. The company is the dominant online player in China, with the greatest number of Internet users and is expanding rapidly in the digital payments and financial services industries. Out of the 42 analysts covering the stock, 35 have rated it as a ‘Buy’, while their average target price of $126 implies that the stock is expected to appreciate by another 26%. Citadel Advisors also sold off its stake in the Chinese online giant during the fourth quarter, which had consisted of 1.69 million shares on September 30.
Lastly, Druckenmiller’s firm sold off its 35,800 shares of Amazon.com, Inc. (NASDAQ:AMZN) during the year-end quarter. Viking Global also pared its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 1.3 million shares during the fourth quarter, lowering it to 1.62 million shares by the end of December. The online retail leader has returned a hefty 66% over the last year and currently has a market capitalization of $405 billion. The company plans to allow phone calling through its Echo line of products later this year, which should further strengthen its engagement with customers. Amazon.com, Inc. (NASDAQ:AMZN) is rapidly expanding in India and has committed a war chest of $5 billion to take on the market leader there, Flipkart.