Lee Ainslie (Trades, Portfolio), the founder and CEO of Maverick Capital, recently disclosed the firm’s portfolio changes for the fourth quarter of 2020, which ended on Dec. 31.
One of the “Tiger Cubs” mentored by legendary investor Julian Robertson (Trades, Portfolio) of Tiger Management, Ainslie founded Maverick Capital in 1993. The Dallas-based firm employs six industry heads for researching investment opportunities, each one an expert in their respective industry: consumer, health care, cyclical, retail, financial and telecommunications, media and technology. After consulting these experts, Ainslie makes the final call on any changes to the portfolio.
Maverick Capital’s top buys for the quarter were Seer Inc. (NASDAQ:SEER), Applied Materials Inc. (NASDAQ:AMAT), MGM Resorts International (NYSE:MGM) and Fleetcor Technologies Inc. (NYSE:FLT).
The firm established a new position worth 5,425,513 shares in Seer (NASDAQ:SEER), impacting the equity portfolio by 4.47%. During the quarter, shares traded for an average price of $63.62.
Based in Redwood City, California, Seer is a biotech company that develops “innovative solutions that act as a gateway to the proteome.” Its aim is to advance the study of proteomics through the creation of technology that can facilitate the study of these vital parts of living organisms.
On Feb. 24, shares of Seer traded around $55.63 for a market cap of $3.39 billion. Since the company went public in December 2020, the stock is down 1%.
The company has a financial strength rating of 7 out of 10. Following its public offering, Seer has an even stronger cash balance and no debt on its balance sheet. The operating margin of -14,554.31% and net margin of -13,825.86% indicate the company is not profitable.
The firm increased its stake in Applied Materials (NASDAQ:AMAT) by 2,221,298 shares, or 248.46%, for a total holding of 3,115,330 shares. The trade had a 3.07% impact on the equity portfolio. Shares traded for an average price of $74.13 during the quarter.
Applied Materials is a materials engineering company headquartered in Santa Clara, California. It provides equipment, services and software that are then used in the manufacture of semiconductor chips for electronics, flat panel displays, smartphones and solar products, among others.
On Feb. 24, shares of Applied Materials traded around $122.81 for a market cap of $112.70 billion. According to the GuruFocus Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 7 out of 10 and a profitability rating of 9 out of 10. The Piotroski F-Score of 9 out of 9 and Altman Z-Score of 7.35 indicate a fortress-like balance sheet. The return on invested capital has surpassed the weighted average cost of capital in recent years, indicating profitable operations.
MGM Resorts International
The firm made a new investment of 5,017,643 shares in MGM Resorts International (NYSE:MGM) after selling out of its previous holding in the company in the third quarter of 2020. The trade had a 2.53% impact on the equity portfolio. During the quarter, shares traded for an average price of $25.80.
MGM Resorts is a hospitality company based in Las Vegas. It owns and operates entertainment destination resorts in Las Vegas, Massachusetts, Detroit, Mississippi, Maryland and New Jersey through brand names that include Bellagio, Mandalay Bay, MGM Grand and Park MGM.
On Feb. 24, shares of MGM Resorts traded around $38.63 for a market cap of $19.08 billion. According to the GuruFocus Value chart, the stock is significantly overvalued.
The company has a financial strength rating of 3 out of 10 and a profitability rating of 5 out of 10. The cash-debt ratio of 0.25 is lower than 62% of industry peers and the Altman Z-Score of 1.1 indicates the company could be in financial distress. Before the Covid-19 pandemic hit, the company had a three-year revenue growth rate of 13.9% and a three-year Ebitda growth rate of 24.7%.
The firm added 429,479 shares, or 78.08%, to its Fleetcor Technologies (NYSE:FLT) holding for a total stake of 979,538 shares. The trade impacted the equity portfolio by 1.88%. Shares traded for an average price of $257.05 during the quarter.
Based in Atlanta, Fleetcor is a provider of fuel cards, radio-frequency identification (RFID) and other workforce payment products and services. The company specializes in securing and simplifying payment for fuel, general payables, toll and lodging expenses, with operations in 80-plus countries.
On Feb. 24, shares of Fleetcor traded around $290.19 for a market cap of $24.28 billion. According to the GuruFocus Value chart, the stock is modestly overvalued.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 8 out of 10. The Piotroski F-Score of 5 out of 9 and Altman Z-Score of 2.98 indicate the company is financially stable. The operating margin of 40.70% and net margin of 29.48% are outperforming 96% of industry peers.
During the quarter, Ainslie’s firm established 270 new positions, sold out of 170 stocks and added to or reduced several other positions for a turnover of 27%. As of the quarter’s end, the firm held 662 common stock positions valued at a total of $6.25 billion.
The top holdings were Facebook Inc. (NASDAQ:FB) with a 7.09% portfolio weight, DuPont de Nemours Inc. (NYSE:DD) with 5.54% and Microsoft Corp. (NASDAQ:MSFT) with 5.13%. In terms of sector weighting, the firm was most invested in technology, health care and consumer cyclical.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.
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