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Viking Global Investors reduces position in Mohawk Industries

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Viking Global and Mohawk

Viking Global has revealed a 5.5% stake in Mohawk Industries (MHK) with over 4 million shares. The fund has reduced its position by over 1.63 million shares since the end of the third quarter, which leaves the hedge fund with a total exposure of $11 billion with respect to the flooring manufacturer. In 3Q14, the hedge fund owned 5.6 million shares of the company.

The top holdings of Viking Global Investors include Mohawk Industries, Pioneer Natural Resources, and Valeant Pharmaceuticals, which comprise 3.07%, 5.37%, and 5.25% of Viking Global’s total portfolio, respectively.

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Overview of Mohawk Industries

One of the leading flooring manufacturers, Mohawk Industries was founded in 1878 and has its headquarters in Georgia. The company has transformed its business from an American carpet manufacturer into the world’s largest flooring company.

Mohawk Industries produces floor covering products for residential and commercial applications in North America and Europe.

The company has operations in Australia, Brazil, Canada, China, Europe, India, Malaysia, Mexico, Russia, and the United States. The company’s brands include American Olean, Bigelow, Daltile, Durkan, Karastan, Kerama Marazzi, Lees, Marazzi, Mohawk, Pergo, Quick-Step, and Unilin.

In 2013, the company had annual net sales of $7.3 billion. Sales in North America generated ~75% of annual net sales.

Viking Global Investors amended position in MHK via 13G filings

Viking Global Investors reduced its position in MHK by over 1.63 million shares since the end of the third quarter.

Since MHK has been a part of Viking’s portfolio, it has generated modest returns and has gained less than 10% since the end of 2013. Viking has been bullish about the stock, as it has been steadily increasing its stake in the company.

In addition to a bullish sentiment from investors, MHK has also received a “buy” rating from analysts and its average target price amounts to over $162 per share. Analysts expect the company to post significant revenue and earnings growth for the next two years.

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Other investors in Mohawk

Lone Pine initiated a $416.6 million stake in Mohawk Industries during the third quarter, which contains 3.09 million shares and represents 1.62% of the fund’s equity portfolio. At the same time, Senator Investment Group almost doubled its position to 1.69 million shares, according to its latest SEC filings.

Viking Global’s other positions

Viking Global’s new positions in 3Q14 include Alibaba Group Holding (BABA), Citigroup (C), and Bank of New York Mellon (BK). The positions the firm sold include Constellation Brands (STZ) and Cameron International (CAM).

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