Whitney Tilson’s Kase Capital is up over 4 percent in January 2013, with major contribution coming from Netflix, Inc. (NASDAQ:NFLX), which gained a whopping 80 percent last month. In case you were wondering, Netflix, is neither held by Bill Ackman nor by David Einhorn to the best of our knowledge, so Tilson desrves a pat on the back here. The position was increased manifold in Q3 and has been held by Tilson since before the second quarter of 2012. Tilson also discussed the NFLX idea in Value Investing Congress 2012. Being a long held position, the returns from NFLX should be even higher for him than what Netflix, Inc. (NASDAQ:NFLX) managed in January alone.
He mentions in the letter that he is still mulling over on whether to sell the stake in NFLX and realize the profits or keep holding onto it in hopes of further gains. He says that estimating NFLX’s intrinsic value is not as easy as it is for other companies, therefore at this point predicting the future course of the stock is not easy. Tilson calls Netflix, “by far the most controversial and heavily shorted stock we own”, he probably missed the controversy that Ackman and Icahn raised on CNBC on the subject of Herbalife Ltd. (NYSE:HLF), a company that Tilson is shorting, albeit with a tiny position.
Another significant holder of Netflix, Inc. (NASDAQ:NFLX) is Carl Icahn who owns 1.25 million shares of the company as of 3Q2012. Other investors with long positions in Netflix include, D.E Shaw, JANA Partners and Argonaut Capital.
Tilson went solo in mid of 2012 and now manages Kase Capital (formerly T2 partners) alone. The long portfolio (net exposure 62 percent) was up in the major seven positions, while losing in Apple Inc. (NASDAQ:AAPL), a position Tilson exited last year. In the short portfolio, the fund holds 8 positions, which equal a 14 percent exposure in Kase’s portfolio. Tilson covered short positions in Chipotle Mexican Grill, Inc. (NYSE:CMG) and Caterpillar Inc. (NYSE:CAT) with a small profit. Chipotle Mexican Grill, Inc. (NYSE:CMG) is a short pick of David Einhorn as well.
The only newly added position, since the demise of T2 Partners, is Canadian Pacific Railway Limited (USA) (NYSE:CP) (TSE:CP). Tilson acquired the position after attending an investor day in Dec 2012. Canadian Pacific Railway Limited (USA) (NYSE:CP) (TSE:CP) is a long holding of Bill Ackman and a celebrated target of his activism that allowed him to shakeup CP’s BoD.
Tilson also owns 540,759 shares of Iridium Communications Inc. (NASDAQ:IRDM), which is his 10th largest long holding. Tilson’s thesis on Iridium is largely based on the fact that the company is one of the two players in the global satellite communications industry, and this gives it a significant edge.