Tiger Management was founded in 1980 by billionaire and legendary investor Julian Robertson, who later closed the fund to outside investors and now manages his own money, as well as having provided seed capital for many successful hedge funds managed by former employees of his firm, known as ‘Tiger Cubs’. Mr. Robertson has a total net worth of $3.6 billion, according to the Forbes real-time list of the richest people in the world.
Tiger Management went from holding a fairly balanced U.S. equity portfolio on March 31 to one that is primarily centered around tech and healthcare stocks, which accounted for 37% and 33% of the value of its portfolio respectively on June 30, while those figures stood at just 18% and 22% respectively on March 31. In this article we’ll analyze the important moves made by Julian Robertson during the second quarter according to its latest 13F filing.
At Insider Monkey, we track more than 750 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).
Shire PLC (ADR) (NASDAQ:SHPG)
– Shares Owned by Tiger Management (as of June 30): 120,554
– Value of Tiger Management’s Holding (as of June 30): $22.19 million
Tiger Management added Ireland-based specialty pharmaceutical company Shire PLC (ADR) (NASDAQ:SHPG) to its portfolio during the second quarter, buying 120,554 shares of the company worth $22.19 million on June 30. The fresh position accounts for 7% of the value of the hedge fund’s equity portfolio. Last week, reports surfaced that Shire was in talks to acquire Raptor Pharmaceutical Corp. (NASDAQ:RPTP) for $800 million. Shire’s stock is down by over 2% so far this year. Andreas Halvorsen’s Viking Global owns over 1.16 million shares of Shire PLC (ADR) (NASDAQ:SHPG) as of June 30.
Microsoft Corporation (NASDAQ:MSFT)
– Shares Owned by Tiger Management (as of June 30): 403,000
– Value of Tiger Management’s Holding (as of June 30): $20.62 million
Microsoft Corporation (NASDAQ:MSFT) was another new addition to Tiger Management’s equity portfolio during the quarter, as the firm acquired $20.62 million worth of shares of the technology behemoth. On Tuesday, Microsoft and Lenovo announced a partnership which will see select Lenovo Android devices load Microsoft’s productivity apps like Office, OneDrive and Skype. Microsoft posted a solid fourth quarter of fiscal year 2016 last month, delivering $0.69 in EPS on $22.6 billion inrevenue, above the estimates of $0.58 and $22.14 billion respectively. Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella said during the earnings call that the company’s digital transition is going well and that its Cloud platform is experiencing “significant” customer momentum. A total of 131 hedge funds in our database were long Microsoft Corporation (NASDAQ:MSFT) at the end of the June quarter, down from 144 funds a quarter earlier.
On the next page, we’ll continue our discussion of Tiger Management’s biggest moves of the second quarter.
Pandora Media Inc (NYSE:P)
– Shares Owned by Tiger Management (as of June 30): 1.46 million
– Value of Tiger Management’s Holding (as of June 30): $18.19 million
California-based music streaming service Pandora Media Inc (NYSE:P) caught the attention of Tiger Management in the second quarter, as the fund amassed 1.46 million new shares of the company. Last week, the Wall Street Journal reported that Pandora was close to reaching deals with major record companies after which it would launch an on-demand music service, a departure from its current radio model. The alleged move comes as the company faces intense pressure due to competitors like Apple Music, Spotify, and now a rumored upcoming entrant from Amazon.com, Inc. (NASDAQ:AMZN), and suffers slowing user growth and revenue, which mostly come from ads rather than subscriptions. Pandora Media Inc (NYSE:P) recently squashed an acquisition offer worth $3.40 billion from Liberty Media Corp (NASDAQ:LMCA). Pandora’s stock is up by 2% year-to-date. At the end of the second quarter, Gilchrist Berg’s Water Street Capital owned 8.04 million shares of Pandora.
Netflix, Inc. (NASDAQ:NFLX)
During the second quarter, Tiger Management sold all 240,800 Netflix, Inc. (NASDAQ:NFLX)’s shares that it had owned on March 31. Last month, Netflix Inc (NASDAQ:NFLX) said that it added 1.7 million new streaming customers in the three months ended June 30, significantly lower than the estimates of 2.5 million. For the third quarter, Netflix expects to add another 2 million new subscribers, also well below analysts’ expectations of 2.54 million. The disappointing growth stats led investors to widely cut their price targets and ratings for Netflix. Despite that, the stock has rebounded from a big post-earnings dip to trade up by over 5% in the third quarter. At the end of the second quarter, 54 hedge funds tracked by Insider Monkey were bullish on Netflix Inc (NASDAQ:NFLX), down from 64 funds a quarter earlier.
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)
Tiger also bid farewell to Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) during the second quarter, selling the 356,200 shares of the Israeli drugmaker that it held on March 31. Teva’s shares have lost over 18% so far in 2016. Last week, Teva said that the European Commission had granted marketing authorization for CINQAERO, its antibody for adult patients with severe eosinophilic asthma. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) earned $1.25 per share on $5 billion in revenue for the second quarter, coming in ahead of the Street’s forecasts of $1.20 in EPS on $4.87 billion in revenue. The company expects to earn between $5.20 and $5.40 per share for the full year.