KKR - Tracking Lone Pine Capital Portfolio - Q2 2023 Update

2023-09-25 21:13:17 ET

Summary

• Lone Pine Capital's 13F portfolio value increased to $10.91B, with 29 holdings.
• Top three positions are Microsoft, Taiwan Semi, and Amazon, comprising ~19% of the portfolio.
• New stakes include Live Nation and Nvidia Corp, while stake disposals include Advanced Micro Devices and Valaris Limited.

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 8/14/2023. 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 Q1 2023.

This quarter, Lone Pine’s 13F portfolio value increased from $10.80B to $10.91B. The number of holdings remained steady at 29. The top three positions are at ~19% while the top five are ~30% of the 13F assets: Microsoft, Taiwan Semi, Amazon, Bath & Body Works, and RH Inc.

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 Julian Robertson: A Tiger in the Land of Bulls and Bears.

New Stakes:

Live Nation (LYV), and Nvidia Corp (NVDA): LYV is a 3.32% of the portfolio position purchased this quarter at prices between ~$65 and ~$92 and the stock currently trades at $79.62. The 2.49% NVDA stake was purchased at prices between ~$262 and ~$438 and it is now at ~$422.

Stake Disposals:

Advanced Micro Devices (AMD): AMD was a 2.57% of the portfolio stake established during Q4 2022 at prices between ~$56 and ~$78 and the stock currently trades at ~$97. There was a ~28% selling last quarter at prices between ~$62 and ~$100. The disposal this quarter was at prices between ~$82 and ~$129.

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 $76.39. The elimination this quarter was at prices between ~$55 and ~$67.

Stake Decreases:

Microsoft Corporation (MSFT): MSFT is now a large (top three) position at 7.81% of the portfolio. It was established in Q2 2017 at prices between $65 and $72.50. The stake has wavered. Recent activity follows. The two quarters through Q3 2022 saw a ~43% reduction at prices between ~$233 and ~$315. The next quarter saw a ~23% stake increase while in the last quarter there was a similar reduction. The stock is now at ~$318. There was a minor ~7% trimming this quarter.

Taiwan Semi (TSM): TSM is a large (top three) ~6% of the portfolio position purchased in Q1 2022 at prices between ~$99 and ~$141 and the stock currently trades at $86.24. The three quarters through Q4 2022 saw a ~30% stake increase at prices between ~$60 and ~$105. The last two quarters saw a ~40% selling at prices between ~$74 and ~$107.

Amazon (AMZN): AMZN is currently at 5.85% of the portfolio. It was established in Q4 2017 at prices between ~$48 and ~$60. The position has wavered. Recent activity follows. 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 next quarter saw a ~45% stake increase at prices between ~$82 and ~$121 while the last two quarters saw a ~50% reduction at prices between ~$83 and ~$130. The stock is now at ~$131.

Bath & Body Works ( BBWI ) previously L Brands: BBWI is currently at 5.62% of the portfolio. It was purchased in Q1 2020 at prices between ~$9 and ~$25 and it is now at $33.07. There was a ~26% selling in the last five 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.

Workday Inc. (WDAY): WDAY is currently at 5.34% of the portfolio. It was established in 2021 at prices between ~$221 and ~$301 and it is now at ~$232. The last six quarters saw a ~55% reduction at prices between ~$133 and ~$244.

TransDigm Group (TDG): The 4.78% TDG position was purchased during Q3 2022 at prices between ~$525 and ~$677 and it is now at ~$851. There was a ~17% trimming this quarter.

DICK’S Sporting Goods (DKS): The ~4% DKS stake was purchased during H1 2022 at prices between ~$71 and ~$118 and the stock currently trades at ~$107. There was a ~30% reduction this quarter at prices between ~$122 and ~$149.

Note: They have a ~5.3% ownership stake in the business.

Salesforce (CRM): CRM is a 3.28% of the portfolio stake established during the last two quarters at prices between ~$128 and ~$200. The stock currently trades at ~$206. This quarter saw a ~17% trimming.

Visa (V): The 2.70% of the portfolio V position was established during Q4 2021 at prices between ~$190 and ~$234 and it is now at ~$233. The stake was reduced by ~55% during H1 2022 at prices between ~$189 and ~$235. That was followed with a ~30% selling last quarter at prices between ~$207 and ~$231. There was a ~16% trimming this quarter.

Stake Increases:

Booking Holdings (BKNG): The 5.21% BKNG position was purchased in Q2 2022 at prices between ~$1749 and ~$2375 and it is now at ~$3098. The last two quarters saw a ~20% trimming while this quarter saw a minor ~3% increase.

Mastercard (MA): MA is a 4.24% of the portfolio position purchased during Q4 2021 at prices between ~$306 and ~$370 and the stock currently trades at ~$403. The position was reduced by ~70% during H1 2022 at prices between ~$309 and ~$397. That was followed by a one-third reduction in the last two quarters at prices between ~$283 and ~$382. There was a ~12% increase this quarter.

PTC Inc. (PTC): PTC is a ~4% of the portfolio position purchased during Q3 2022 at prices between ~$100 and ~$126 and the stock currently trades at ~$141.

LPL Financial Holdings (LPLA): LPL is a ~4% of the portfolio stake established during Q2 2022 at prices between ~$168 and ~$219 and the stock currently trades at ~$241. The last four quarters have seen only minor adjustments.

Floor & Décor Holdings (FND): The 3.58% FND stake was purchased during the last three quarters at prices between ~$65 and ~$104 and it is now at ~$91.

HDFC Bank (HDB): HDB is a 2.61% of the portfolio position purchased during H2 2022 at prices between ~$55 and ~$71 and it now goes for $58.63. There was a ~35% increase this quarter at prices between ~$64 and ~$71.

Kept Steady:

RH Inc. (RH): The 5.36% 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 ~$265.

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

UnitedHealth Group (UNH): The 3.93% 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. H2 2022 saw a one-third stake increase at prices between ~$500 and ~$555 while the last quarter saw a ~16% selling. The stock is now at ~$510.

KKR & Company (KKR), and BILL Holdings (BILL): KKR is a 3.37% of the portfolio position purchased last quarter at prices between $46.70 and $59.10 and the stock currently trades at $63.55. The 1.95% BILL stake was established last quarter at prices between ~$68 and ~$129 and it now goes for $99.64.

ASML Holding NV (ASML): ASML is a 2.91% of the portfolio position established during the last two quarters at prices between ~$379 and ~$697 and it currently trades at ~$586.

ICICI Bank (IBN): The 2.55% of the portfolio IBN stake was established during Q3 2022 at prices between ~$18 and ~$23 and it is now at ~$23.

AvidXchange Holdings (AVDX), Cheniere Energy (LNG), EPAM Systems (EPAM), Marqeta Inc. (MQ), Moderna (MRNA), and Sweetgreen Inc. ( SG ) : These small (less than ~2% of the portfolio each) positions were kept steady this quarter.

The spreadsheet below highlights changes to Mandel’s 13F stock holdings in Q2 2023:

Source: John Vincent. Data constructed from Lone Pine Capital’s 13F filings for Q1 2023 and Q2 2023.

For further details see: