META - Tracking Lone Pine Capital Portfolio - Q4 2022 Update

2023-03-17 07:40:23 ET

Summary

• Lone Pine Capital’s 13F portfolio value decreased marginally from $10.61B to $10.48B this quarter.
• They added Advanced Micro Devices and Moderna while dropping Autodesk, PayPal Holdings, Meta Platforms, and EQT Corp. They also increased Microsoft and Amazon while decreasing Thermo Fisher Scientific and EPAM.
• The top three positions are Bath & Body Works, Microsoft, and Amazon. They add up to ~24% of the portfolio.

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 2/14/2023. 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 Q3 2022.

This quarter, Lone Pine's 13F portfolio value decreased marginally from $10.61B to $10.48B. The number of holdings decreased from 31 to 30. The top three positions are at ~24% while the top five are ~39% of the 13F assets: Bath & Body Works, Microsoft, Amazon, Workday, and Taiwan Semi.

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:

Advanced Micro Devices ( AMD ) and Moderna ( MRNA ): AMD is a 2.42% of the portfolio stake established this quarter at prices between ~$56 and ~$78 and the stock currently trades well above that range at $96.60. The 2.32% MRNA position was purchased at prices between ~$118 and ~$210 and it now goes for ~$152.

ASML Holding NV ( ASML ) and Floor & Décor Holdings ( FND ): ASML is a 1.23% of the portfolio position established this quarter at prices between ~$379 and ~$628 and it currently trades at ~$631. The 1.21% FND stake was purchased at prices between ~$65 and ~$82 and it is now at $90.58.

Salesforce.com ( CRM ), Valaris Limited ( VAL ), and Equifax ( EFX ): These are very small (less than ~0.70% of the portfolio each) stakes established this quarter.

Stake Disposals:

PayPal Holdings ( PYPL ): PYPL was a 6.73% of the portfolio stake established during the last two quarters at prices between ~$69 and ~$122. The disposal this quarter was at prices between ~$68 and ~$94. It currently trades at $74.35.

Autodesk Inc. ( ADSK ): ADSK was a ~4% of the portfolio stake established last quarter at prices between ~$171 and ~$234. It was sold this quarter at prices between ~$182 and ~$232. The stock currently trades at ~$201.

EQT Corporation ( EQT ): The 2.28% EQT position was purchased in Q2 2022 at prices between ~$33 and ~$50. The elimination this quarter was at prices between ~$32 and ~$45. It now goes for $30.12.

Meta Platforms ( META ): The 3.73% of the portfolio META stake was established in Q1 2022 at prices between ~$187 and ~$339. There was a ~37% increase next quarter at prices between ~$156 and ~$234. Last quarter saw a ~52% reduction at prices between ~$134 and ~$183. The stake was sold this quarter at prices between ~$89 and ~$140. The stock is now at ~$205.

Block Inc. ( SQ ) previously Square: The SQ stake was established in Q3 2020 at prices between ~$113 and ~$165. The position was almost sold out in Q4 2021 at prices between ~$158 and ~$265. The stake was rebuilt next quarter at prices between ~$89 and ~$164 but again sold down in Q2 2022 at prices between ~$58 and ~$145. The remainder stake was sold this quarter. The stock is now at ~$75.

Note: Square had a previous round-trip. It was a ~2% position built from Q2 2019 at prices between $57 and $82 and sold in Q2 2020 at prices between ~$44 and ~$105.

Chesapeake Energy ( CHK ), Grove Collaborative ( GROV ), and Proshares VIX Sh Trm Fut (FIXY) Puts: These three minutely small (less than ~0.05% of the portfolio each) stakes were disposed during the quarter.

Stake Decreases:

Workday Inc. ( WDAY ): WDAY is currently a large top-five position at 7.46% of the portfolio. It was established in 2021 at prices between ~$221 and ~$301 and it is now well below that range at ~$192. The last four quarters saw a ~20% reduction at prices between ~$133 and ~$254.

Mastercard ( MA ) and Visa ( V ): These fairly large stakes were established in Q4 2021. MA is a 4.47% of the portfolio position purchased at prices between ~$306 and ~$370 and the stock currently trades at ~$348. The position was reduced by ~70% during H1 2022 at prices between ~$309 and ~$397. This quarter also saw a ~13% trimming. The 4.13% of the portfolio V position was established at prices between ~$190 and ~$234 and it is now at ~$217. The stake was reduced by ~55% during H1 2022 at prices between ~$189 and ~$235. This quarter saw a minor ~4% trimming.

Booking Holdings ( BKNG ): The 4.24% BKNG position was purchased in Q2 2022 at prices between ~$1749 and ~$2375 and it is now at ~$2440. This quarter saw a ~13% trimming.

EPAM Systems ( EPAM ): The 4.24% EPAM position was purchased in Q2 2022 at prices between ~$265 and ~$348 and it is now at ~$280. The position was sold down by ~50% this quarter at prices between ~$301 and ~$389.

Thermo Fisher Scientific ( TMO ): TMO is a ~3% of the portfolio position established during H1 2022 at prices between ~$500 and ~$645 and the stock currently trades at ~$557. There was a one-third selling this quarter at prices between ~$485 and ~$571.

Cheniere Energy ( LNG ): The minutely small 0.01% stake in LNG was further reduced this quarter.

Stake Increases:

Microsoft Corporation ( MSFT ): MSFT is now a large (top three) position at ~8% 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 next quarter saw a ~26% increase at prices between $85 and $97. The five quarters thru Q4 2019 had seen a ~63% selling at prices between $98 and $159 while 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 last two quarters at prices between ~$233 and ~$315. This quarter saw a ~23% stake increase at prices between ~$214 and ~$257. The stock is now at ~$276.

Note: MSFT has had a previous round-trip: It was a large (top five) 4.93% of the portfolio position in Q4 2016. The bulk of the position was from H1 2015 at prices between $40 and $48. The five quarters thru Q3 2016 had seen a combined ~50% selling at prices between $43 and $58. The elimination in Q1 2017 happened at prices between $62 and $66.

Amazon.com ( AMZN ): AMZN is currently the third largest 13F stake at 7.73% 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 last quarter at prices between ~$106 and ~$145. This quarter saw a ~45% stake increase at prices between ~$82 and ~$121. The stock is now at ~$100.

Taiwan Semi ( TSM ): TSM is a large (top five) 7.39% of the portfolio position purchased in Q1 2022 at prices between ~$99 and ~$141 and the stock currently trades well below that range at ~$89.30. The last three quarters have seen a ~30% stake increase at prices between ~$60 and ~$105.

UnitedHealth Group ( UNH ): The 5.38% 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. Next two quarters saw a roughly two-thirds reduction at prices between ~$452 and ~$546. The stock is now at ~$472. There was a one-third stake increase in the last two quarters at prices between ~$500 and ~$555.

TransDigm Group ( TDG ): The 4.66% TDG position was purchased last quarter at prices between ~$525 and ~$677 and it is now at ~$712. There was a minor ~5% stake increase this quarter.

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 ~$203. There was a ~14% trimming last quarter. This quarter saw a marginal increase.

PTC Inc. ( PTC ) and HDFC Bank ( HDB ): PTC is a ~3% of the portfolio position purchased last quarter at prices between ~$100 and ~$126 and the stock currently trades at ~$119. There was a minor ~6% stake increase this quarter. HDB is a 1.90% of the portfolio position purchased during the last two quarters at prices between ~$55 and ~$71 and it now goes for ~$64.

First Citizens BancShares ( FCNCA ): The 1.27% FCNA stake was primarily built this quarter at prices between ~$730 and ~$874. The stock currently trades well below that range at ~$548.

Kept Steady:

Bath & Body Works ( BBWI ) previously L Brands: BBWI is currently the largest 13F position at 8.30% of the portfolio. It was purchased in Q1 2020 at prices between ~$9 and ~$25 and it is now at $35.25. There was a ~15% selling in the last three 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.

Dick's Sporting Goods ( DKS ): The 5.76% DKS stake was purchased during H1 2022 at prices between ~$71 and ~$118 and the stock currently trades at ~$147.

Note: They have a ~8.4% ownership stake in the business.

RH Inc. ( RH ): The 4.52% 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 well below their purchase price ranges at ~$248.

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

ICICI Bank ( IBN ): The 2.44% of the portfolio IBN stake was established last quarter at prices between ~$18 and ~$23 and it is now at $20.15.

AvidXchange Holdings ( AVDX ), Marqeta Inc. ( MQ ), and Sweetgreen Inc. ( SG ) : These are small (less than ~1% of the portfolio each) positions kept steady this quarter.

Note: they have a 3.4% ownership stake in Marqeta.

The spreadsheet below highlights changes to Mandel's 13F stock holdings in Q4 2022:

Source: John Vincent. Data constructed from Lone Pine Capital's 13F filings for Q3 2022 and Q4 2022.

For further details see: