LTHM - Tracking Robert Karr's Joho Capital Portfolio - Q4 2022 Update

2023-03-08 22:48:40 ET

Summary

• Robert Karr's 13F portfolio value decreased from ~$358M To ~$309M this quarter.
• Joho Capital added Quanta Services, SolarEdge Technologies, Shoals Technologies, and Array Technologies while reducing Livent Corp and dropping Alibaba Group Holding.
• The top three positions are Microsoft, Euronet Worldwide, and Quanta Services. They add up to two-thirds of the portfolio.

This article is part of a series that provides an ongoing analysis of the changes made to Robert Karr's 13F stock portfolio on a quarterly basis. It is based on Karr's regulatory 13F Form filed on 2/14/2023. Please visit our Tracking Robert Karr's Joho Capital Portfolio article for an idea on his investment philosophy and our last update for the fund's moves during Q3 2022.

This quarter, Karr's 13F stock portfolio value decreased ~14% from ~$358M to ~$309M. The number of holdings increased from 14 to 15. The top three positions represent ~66% of the 13F assets: Microsoft, Euronet Worldwide, and Quanta Services.

Robert Karr was one of the most successful among the "tiger cubs" (protégés of Julian Robertson & his legendary Tiger Fund). Although his main expertise is Asian equities, ~30% of the assets are typically in US listed 13F securities. The fund (1996 inception) closed to outside money and became a Family Office in 2014. To know more about Robert Karr and "tiger cubs", check out the book Julian Robertson: A Tiger in the Land of Bulls and Bears .

New Stakes:

Quanta Services ( PWR ), SolarEdge Technologies ( SEDG ), Shoals Technologies ( SHLS ), and Array Technologies ( ARRY ): These are the new positions this quarter. The large (top three) 7.80% PWR stake was established at prices between ~$123 and ~$153 and the stock currently trades above that range at ~$162. The large (top five) 7.79% SEDG position was purchased at prices between ~$193 and ~$336 and it is now at ~$325. The 5.87% SHLS stake was established at prices between $19.45 and $31.20 and it now goes for $24.27. ARRY was a 4.53% stake purchased at prices between $14.60 and $23.55 and it is now at $21.47.

Stake Disposals:

Alibaba Group ADR ( BABA ): BABA was Karr's fourth-largest position at ~11% of the portfolio as of last quarter. It was established in Q2 2015 at prices between $79.50 and $94 and almost doubled the following quarter at prices between $57 and $84. Q1 2016 saw another ~50% increase at prices between $60.50 and $81.50. Since then, there had only been minor adjustments. Q1 2021 saw a ~25% selling at prices between ~$223 and ~$271. There was a two-thirds stake increase in Q3 2021 at prices between ~$140 and ~$222. Q2 2022 saw a ~20% reduction at prices between ~$81 and ~$120. That was followed with a ~40% selling last quarter at prices between ~$78 and ~$122. The disposal this quarter was at prices between ~$63 and ~$94. The stock currently trades at ~$87.

Ecolab ( ECL ) and Generac Holdings ( GNRC ): These two minutely small (less than ~0.5% of the portfolio each) stakes were sold during the quarter.

Stake Increases:

Rivian Automotive ( RIVN ): The 3.39% RIVN stake was purchased last quarter at prices between ~$26 and ~$40 and the stock is now well below that range at ~$15. There was a ~150% stake increase this quarter at prices between ~$18 and ~$37.

Stake Decreases:

Euronet Worldwide ( EEFT ): EEFT is a large (top three) ~13% of the portfolio stake purchased in Q3 2020 at prices between ~$87 and ~$106. There was a ~60% stake increase in Q4 2020 at prices between ~$88 and ~$145. That was followed with a ~45% increase in Q4 2021 at prices between ~$101 and ~$135. H1 2022 had seen a ~18% trimming and that was followed by a ~30% reduction this quarter at prices between ~$74 and ~$97. The stock currently trades at ~$109.

Note: Euronet Worldwide has had a previous roundtrip in the portfolio. A small 0.93% of the portfolio position was purchased in Q1 2020 at prices between $69 and $167. It was disposed next quarter at prices between $73 and $121.

Livent Corp. ( LTHM ) : LTHM was a large (top three) ~26% of the portfolio stake established in Q3 2019 at prices between $5.50 and $7.75 and increased by ~60% next quarter at prices between $6.45 and $8.95. There was a ~40% selling in Q2 2020 at prices between $4.60 and $8.75. Q4 2020 saw a two-thirds increase at prices between ~$9 and ~$19. There was a ~25% reduction last quarter at prices between ~$20 and ~$35. This quarter saw the stake almost sold out at prices between ~$19 and ~$34. The stock currently trades at $23.49.

Note: Livent is a spinoff from FMC Corporation ( FMC ) that started trading in October 2018 at ~$16.25 per share.

Amphenol Corp. ( APH ) and Autodesk, Inc. ( ADSK ): These two small (less than ~1% of the portfolio each) stakes were reduced this quarter.

Kept Steady:

Microsoft Corp. ( MSFT ): MSFT is currently the largest position at ~46% of the portfolio. It was first purchased in Q1 2019 at prices between $97 and $120 and increased by ~90% next quarter at prices between $119 and $138. Q4 2021 saw a ~14% selling at prices between ~$282 and ~$343. The stock currently trades at ~$254.

Intuit Inc. ( INTU ): INTU is a fairly large 4.78% of the portfolio position established last quarter at prices between ~$380 and ~$489 and the stock currently trades at ~$417.

Constellation Brands ( STZ ), Estee Lauder ( EL ), Procter & Gamble ( PG ), and Simon Property Group ( SPG ): These very small (less than ~1.50% of the portfolio each) stakes were kept steady this quarter.

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

For further details see: