BBWI - Tracking Lone Pine Capital Portfolio - Q1 2023 Update

2023-06-26 12:07:55 ET

Summary

• Lone Pine Capital's 13F portfolio value increased from $10.48B to $10.80B in Q1 2023, with the number of holdings decreasing from 30 to 29.
• New stakes were established in KKR & Company and Bill Holdings, while Thermo Fisher Scientific, First Citizens Bancshares, and Equifax were disposed of.
• The top five positions, accounting for ~35% of the 13F assets, are Workday, Microsoft, Taiwan Semi, Bath & Body Works, and Amazon.

This article is part of a series that provides an ongoing analysis of the changes made to Lone Pine Capital’s 13F portfolio on a quarterly basis. It is based on their regulatory 13F Form filed on 5/15/2023. Please visit our Tracking Stephen Mandel’s Lone Pine Capital Portfolio article for an idea on their investment philosophy and our previous update for the fund’s moves during Q4 2022.

This quarter, Lone Pine’s 13F portfolio value increased from $10.48B to $10.80B. The number of holdings decreased from 30 to 29. The top three positions are at ~22% while the top five are ~35% of the 13F assets: Workday, Microsoft, Taiwan Semi, Bath & Body Works, and Amazon.

Note: Stephen Mandel stepped down from managing investments at Lone Pine Capital in January 2019 in a previously announced (September 2017) move. He is currently a managing director at the firm. Stephen Mandel worked at Tiger Management under Julian Robertson for eight years starting in the late 1980s, making him a bona fide tiger cub. To know more about Julian Robertson and his legendary Tiger Management, check out the book Julian Robertson: A Tiger in the Land of Bulls and Bears.

New Stakes:

KKR & Company ( KKR ) and Bill Holdings ( BILL ): KKR is 3.19% of the portfolio, purchased this quarter at prices between $46.70 and $59.10 and the stock currently trades at $53.59. The 1.37% BILL stake was established at prices between ~$68 and ~$129, and it now goes for ~$108.

Stake Disposals:

Thermo Fisher Scientific ( TMO ): TMO was ~3% of the portfolio established during H1 2022 at prices between ~$500 and ~$645 and the stock currently trades at ~$524. There was a one-third selling last quarter at prices between ~$485 and ~$571. The disposal this quarter was at prices between ~$535 and ~$605.

First Citizens BancShares ( FCNCA ): The 1.27% FCNA stake was primarily built last quarter at prices between ~$730 and ~$874. The elimination this quarter was at prices between ~$509 and ~$973. The stock currently trades at ~$1208.

Equifax ( EFX ): The minutely small 0.01% stake in EFX was disposed of during the quarter.

Stake Decreases:

Workday Inc. ( WDAY ): WDAY is currently the largest 13F position at 8.16% of the portfolio. It was established in 2021 at prices between ~$221 and ~$301, and it is now at ~$222. The last five quarters saw a ~25% reduction at prices between ~$133 and ~$255.

Microsoft Corporation ( MSFT ): MSFT is now a large (top three) position at 7.15% of the portfolio. It was established in Q2 2017 at prices between $65 and $72.50. There was a ~15% trimming in Q4 2017 at prices between $74 and $87 while the next quarter saw a ~26% increase at prices between $85 and $97. The five quarters through Q4 2019 had seen a ~63% reduction at prices between $98 and $159 while the next quarter saw a ~17% stake increase at prices between ~$135 and ~$189. Q1 2021 saw a ~25% stake increase at prices between ~$212 and ~$245 while in the next two quarters there was a ~40% selling at prices between ~$242 and ~$305. That was followed with a ~43% reduction in the two quarters through Q3 2022 at prices between ~$233 and ~$315. The last quarter saw a ~23% stake increase, while this quarter there was a similar reduction. The stock is now at ~$335.

Taiwan Semi ( TSM ): TSM is a large (top three) ~7% position purchased in Q1 2022 at prices between ~$99 and ~$141 and the stock currently trades at ~$102. The last three quarters saw a ~30% stake increase at prices between ~$60 and ~$105. This quarter saw a ~20% reduction at prices between ~$74 and ~$98.

Bath & Body Works ( BBWI ) previously L Brands: BBWI is currently at 6.63% of the portfolio. It was purchased in Q1 2020 at prices between ~$9 and ~$25, and it is now at $37.21. There was a ~20% selling in the last four quarters.

Note: Lone Pine Capital has a ~9% ownership stake in Bath & Body Works. Their implied cost-basis is understated in the prices above, as ~$14 per share in value came back to them with the Victoria’s Secret spinoff transaction (one share of VSCO for every three shares held) last July.

Amazon.com ( AMZN ): AMZN is currently at 6.32% of the portfolio. It was established in Q4 2017 at prices between ~$48 and ~$60. The position has wavered. Recent activity follows: The three quarters through Q4 2020 saw a ~55% reduction at prices between ~$95 and ~$172 while in the next quarter there was a ~90% stake increase at prices between ~$148 and ~$169. Q3 2021 saw a ~25% selling at prices between ~$159 and ~$187 while in the next quarter there was a ~70% stake increase at prices between ~$160 and ~$185. The position was reduced by ~30% in Q1 2022 at prices between ~$136 and ~$170. That was followed with a ~25% selling during Q3 2022 at prices between ~$106 and ~$145. The last quarter saw a ~45% stake increase at prices between ~$82 and ~$121 while this quarter saw a one-third reduction at prices between ~$83 and ~$113. The stock is now at ~$129.

DICK'S Sporting Goods ( DKS ): The ~6% DKS stake was purchased during H1 2022 at prices between ~$71 and ~$118 and the stock currently trades at ~$135. There was a ~9% trimming this quarter.

Note: They have a ~7.6% ownership stake in the business.

Booking Holdings ( BKNG ): The ~5% BKNG position was purchased in Q2 2022 at prices between ~$1749 and ~$2375, and it is now at ~$2624. The last two quarters saw a ~20% trimming.

TransDigm Group ( TDG ): The 4.77% TDG position was purchased during Q3 2022 at prices between ~$525 and ~$677, and it is now at ~$850. The last two quarters saw only minor adjustments.

UnitedHealth Group ( UNH ): The 3.90% UNH stake was established in Q2 2017 at prices between $164 and $187 and increased by ~160% the following quarter at prices between $185 and $200. The position has wavered. Recent activity follows. There was a ~20% reduction in Q4 2020 at prices between ~$304 and ~$357. That was followed with a ~25% selling in Q4 2021 at prices between ~$387 and ~$506. The next two quarters saw a roughly two-thirds reduction at prices between ~$452 and ~$546. The stock is now at ~$477. There was a one-third stake increase in the last two quarters at prices between ~$500 and ~$555 while this quarter saw a ~16% reduction.

Mastercard ( MA ) and Visa ( V ): These fairly large stakes were established in Q4 2021. MA is 3.53% of the portfolio purchased at prices between ~$306 and ~$370 and the stock currently trades at ~$380. The position was reduced by ~70% during H1 2022 at prices between ~$309 and ~$397. That was followed with a one-third reduction in the last two quarters at prices between ~$283 and ~$382. The 3.10% of the portfolio V position was established at prices between ~$190 and ~$234, and it is now at ~$230. The stake was reduced by ~55% during H1 2022 at prices between ~$189 and ~$235. That was followed with a ~30% selling this quarter at prices between ~$207 and ~$231.

LPL Financial Holdings ( LPLA ): LPL is a 3.48% of the portfolio stake established during Q2 2022 at prices between ~$168 and ~$219 and the stock currently trades at ~$208. The last three quarters have seen only minor adjustments.

Advanced Micro Devices ( AMD ): AMD is a 2.57% of the portfolio stake established last quarter at prices between ~$56 and ~$78 and the stock currently trades at ~$110. There was a ~28% selling this quarter at prices between ~$62 and ~$100.

Marqeta Inc. ( MQ ): The minutely small 0.21% stake in MQ was further reduced this quarter.

Stake Increases:

ASML Holding NV ( ASML ), Floor & Décor Holdings ( FND ), and Salesforce.com ( CRM ): These three stakes were built in the last two quarters. ASML is a 2.91% of the portfolio position established at prices between ~$379 and ~$697, and it currently trades at ~$698. The 2.75% FND stake was purchased at prices between ~$65 and ~$101, and it is now at ~$98. CRM is a 3.76% of the portfolio stake, established at prices between ~$128 and ~$200. The stock currently trades at ~$210.

EPAM Systems ( EPAM ): The 2.67% EPAM position was purchased in Q2 2022 at prices between ~$265 and ~$348, and it is now at ~$214. The position was sold down by ~50% last quarter at prices between ~$301 and ~$389. There was a ~60% stake increase this quarter at prices between ~$275 and ~$379.

ICICI Bank ( IBN ): The 2.41% of the portfolio IBN stake was established during Q3 2022 at prices between ~$18 and ~$23, and it is now at $22.82. There was a minor ~3% increase this quarter.

Moderna ( MRNA ): The 2.32% MRNA position was purchased last quarter at prices between ~$118 and ~$210, and it now goes for ~$119. There was a ~13% stake increase this quarter.

HDFC Bank ( HDB ): HDB is a 1.85% of the portfolio position purchased during the last two quarters at prices between ~$55 and ~$71, and it now goes for ~$69. There was a minor ~3% increase this quarter.

Valaris Limited ( VAL ): The 1.15% VAL stake was established in the last two quarters at prices between ~$49 and ~$79, and it is now at $56.56.

Kept Steady:

RH Inc. ( RH ): The ~4% of the portfolio RH stake was purchased in Q2 2021 at prices between ~$588 and ~$720. Next quarter saw a ~25% stake increase at prices between ~$652 and ~$739. Q4 2021 saw a similar increase at prices between ~$527 and ~$690. H1 2022 also saw a ~12% further increase. The stock is now at ~$291.

Note: Lone Pine Capital has a ~7.4% ownership interest in RH Inc.

PTC Inc. ( PTC ): PTC is a 3.18% of the portfolio position purchased during Q3 2022 at prices between ~$100 and ~$126 and the stock currently trades at ~$141.

AvidXchange Holdings ( AVDX ), Cheniere Energy ( LNG ), and Sweetgreen Inc. ( SG ) : These are very small (less than ~0.5% of the portfolio each) positions kept steady this quarter.

The spreadsheet below highlights changes to Mandel’s 13F stock holdings in Q1 2023:

Source: John Vincent. Data constructed from Lone Pine Capital’s 13F filings for Q4 2022 and Q1 2023.

For further details see: