Passport Capital, the global investment management firm headed by John H. Burbank III disclosed assets under management (AUM) of more than $3.61 billion based in its 13F filing with the Securities and Exchange Commission.
Passport Capital’s New acquisitions
Passport Capital’s major new positions during the quarter include CF Industries Holdings, Inc. (NYSE:CF) 400,000 shares (CALL option) with a market value of $104.256 million. CF Industries is a manufacturer and distributor of nitrogen, and phosphate fertilizers products worldwide.
Analysts at JPMorgan Chase & Co. (NYSE:JPM) recently raised their price target for the shares of CF Industries Holdings, Inc. (NYSE:CF) to $240 per share and recommended a Hold rating. The stock price of the company is down by more than 3% to $239.16 per share as of this writing.
Burbank’s firm also purchased 193,000 shares of Netflix, Inc. (NASDAQ:NFLX) worth $68.23 million. The company is currently trading at $343.78 per share, down by 2% today. Netflix is considered the king of streaming in North America as it represents more than one third of internet traffic in the region.
Passport Capital also bought 474,103 shares of Charter Communications, Inc. (NASDAQ:CHTR) worth $58.409 million and 641,023 shares of SolarCity Corp (NASDAQ:SCTY) worth $40.141 million. The investment management firm also purchased 500,000 shares of SPDR Gold Trust (ETF) (NYSEARCA:GLD) PUT option worth around $61.81 million and Newmont Mining Corp (NYSE:NEM) 4 million shares (PRN) with a market value of about $4.24 million.
Passport Capital’s Increased positions
During the quarter, the investment management firm increased its position in iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) by 4,550,000 shares (PUT) option to 4,650,000 shares worth $540.981 million.
It also purchased more 1,387,145 shares of Gaming and Leisure Properties Inc (NASDAQ:GLPI) bringing its stake to total of 3,601,093 shares worth $131.296 million.
Passport Capital also increased its stake in Solazyme Inc (NASDAQ:SZYM) by 5,325,277 shares to 5,525,277 shares worth $64.148 million. It also acquired 594,548 shares of SINA Corp (NASDAQ:SINA), 481,206 shares of Lowe’s Companies, Inc. (NYSE:LOW), among others.
Passport Capital’s Reduced stock holdings
Passport Capital reduced its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 40,144 shares, NR Energy Inc. (NYSE:NRG) by1,00,128 shares, 58.com Inc (ADR) (NYSE:WUBA) by 635,500 shares, Plains GP Holdings LP (NYSE:PAGP) by 335,197 shares among others.
Passport Capital’s Sold out positions
The investment management firm sold out its entire stake in DIRECTV (NASDAQ:DTV), NextEra Energy, Inc. (NYSE:NEE) and Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK), among others.
Logic behind the moves.
At the 2014 Santa Monica Conference on May 1st, John Burbank laid out his thoughts on the current investment environment. People familiar with the matter told ValueWalk that the China bearishness has lead to a massive drop in China equities, including Chinese internet stocks.
Burbank put together a screen of the cheapest and priciest stocks in US markets based on EBITDA and growth. Burbank discovered that 12 of 21 cheapest are in China; and most of the 12 are internet stocks. Burbank notes that the internet companies represent ‘new China’ as opposed to ‘stale old China’, the new China stocks are set for growth in emerging markets.
However, few foreign investors note the difference even as some of these ‘new China’ stocks have hundreds of millions of users and have massive growth potential. These stocks are cheap and could grow even further as markets are not yet mature in China, which could lead to massive price appreciation.
On the other-hand, 7 of the 12 most expensive stocks on the Burbank screener were cloud based companies. Burbank recommended a short in those positions as the unwind in tech is not over he believes, and this could weigh on China internet.