Lee Ainslie (Trades, Portfolio), the founder and CEO of Maverick Capital, recently disclosed the firm’s 13F portfolio changes for the fourth quarter of 2021, 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/technology. After consulting these experts, Ainslie makes the final call on any changes to the portfolio.
As per its latest 13F filing, Maverick Capital’s top five trades for the quarter were a reduction in top holding Coupang Inc. (CPNG, Financial), the sale of its stake in Centene Corp. (CNC, Financial) and additions to its investments in Oak Street Health Inc. (OSH, Financial), Visa Inc. (V, Financial) and Mastercard Inc. (MA, Financial).
Maverick Capital trimmed its Coupang (CPNG, Financial) stake by 9.47%, reducing the equity portfolio by 2.78%. Even after the sale, it is still the top portfolio holding with 94,793,985 shares trading for an average price of $28.18 during the quarter.
Coupang is a South Korean e-commerce company. Founded in 2010, it has grown to become the largest online marketplace in South Korea, with its Rocket Delivery service offering same-day or next-day delivery for millions of items.
On Feb. 24, shares of Coupang traded around $23.64 for a market cap of $41.40 billion. Since it went public in March of 2021, shares are down 52%.
The company has a financial strength rating of 7 out of 10 and a profitability rating of 1 out of 10. The cash-debt ratio of 1.88 and Altman Z-Score of 4.83 show a solid balance sheet, though the negative operating and net margins show the company has yet to become profitable.
The firm sold out of its 4,120,045-share Centene Corp. (CNC, Financial) position, which previously took up 2.59% of the equity portfolio. During the quarter, shares traded for an average price of $73.64 apiece.
Based in St. Louis, Centene is a major intermediary for both government-sponsored and privately insured health care programs in the U.S. It focuses on managed care for uninsured, underinsured and low-income individuals.
On Feb. 24, shares of Centene traded around $80.84 for a market cap of $47.12 billion. According to the GF Value Line, the stock is fairly valued.
The company has a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. Warning signs include declining margins and growing long-term debt, while positive signs include a three-year revenue per share growth rate of 12.2% and a three-year Ebitda per share growth rate of 6.5%.
Oak Street Health
Ainslie’s firm upped its stake in Oak Street Health (OSH, Financial) by 1,464.86% for a total of 4,225,127 shares, adding 1.48% to the equity portfolio. Shares changed hands for an average price of $37.66 during the quarter.
Headquartered in Chicago, Oak Street Health is a provider of medical care to Medicare patients and adults over 65, connecting patients to primary care doctors and specialists in the Medicare network in 11 U.S. states.
On Feb. 24, shares of Oak Street Health traded around $15 for a market cap of $3.61 billion. Since it went public in August 2020, the stock has lost 62%.
The company has a financial strength rating of 3 out of 10 and a profitability rating of 1 out of 10. The balance sheet looks distressed with an Altman Z-Score of 1.36, though the current ratio of 2.78 indicates the company can keep its bills paid for now. The operating and net margins are negative and declining, so it seems the company has not yet achieved profitability.
The firm added another 54.48% to its Visa (V, Financial) investment, ending the quarter with 1,118,192 shares and increasing the equity portfolio by 0.97%. During the quarter, shares traded for an average price of $214.28.
Visa is a major provider of financial services, credit cards and electronic payments based in San Francisco. The company facilitates funds transfers primarily through credit, debit and prepaid cards.
On Feb. 24, shares of Visa traded around $217.30 for a market cap of $470.57 billion. According to the GF Value Line, the stock is fairly valued.
The company has a financial strength rating of 7 out of 10 and a profitability rating of 10 out of 10. The balance sheet is formidable with a Piotroski F-Score of 8 out of 9 and an Altman Z-Score of 7.52. The return on invested capital is consistently higher than the weighted average cost of capital, showing the company is creating value as it grows.
The firm also turned more bullish on Mastercard (MA, Financial), increasing the position by 3,699.91% to 208,349 shares and adding 0.83% to the equity portfolio. Shares traded for an average price of $345.75 in the three months through the end of December.
Mastercard is an American financial services company that provides tech-based payment solutions to consumers, business, merchants, card issuers and governments around the world. It is one of the largest such companies in the U.S., alongside Visa.
On Feb. 24, shares of Mastercard traded around $369.38 for a market cap of $361.06 billion. According to the GF Value Line, the stock is fairly valued.
The company has a financial strength rating of 6 out of 10 and a profitability rating of 10 out of 10. Warning signs include assets growing faster than revenue and increasing long-term debt, while positive signs include ROIC that consistently surpasses WACC.
As of the quarter’s end, the firm held 308 common stock positions valued at a total of $8.85 billion. The turnover was 11%.
The top holding was Coupang with 31.47% of the equity portfolio, followed by Amazon.com Inc. (AMZN, Financial) with 3.50% and Microsoft Corp. (MSFT, Financial) with 3.42%.
In terms of sector weighting, the firm was most invested in consumer cyclical stocks, followed by technology and communication services.