12 May

Blue Ridge Capital’s Top Positions in 4Q14

WRITTEN BY Patricia Garner

Blue Ridge Capital’s investment strategy

John Griffin’s Blue Ridge Capital focuses on investing in individual companies rather than looking at the entire sector. The fund generally targets “absolute returns” by investing in and short-selling companies, with a focus on going long. Blue Ridge’s investment strategy is based on fundamental analysis. This hedge fund focuses on companies that have competitive advantages in their industries while shorting those thought to have fundamental problems.

According to hedgefundletters.com, based on Tiger Cubs’ philosophy, “the fund’s investment decisions are based on bottom-up in-depth research of the fundamentals to determine the long-term perspectives of each individual company, with some consideration given to the general prevailing environment. Mr. Griffin brings his own nuance to the long/short strategy by filtering all the generated investment ideas through an exhaustive checklist.”

Blue Ridge Capital’s Top Positions in 4Q14

Hedgefundletters.com goes on to say, “Mr. Griffin normally focuses on individual corporations rather than the sector, but in the checklist methodology benchmarking against well and badly performing peers is important, as is the whole industry’s outlook. Industry is assessed on some basic factors such as relative power of stakeholders, barriers of entry, core competencies for success, opportunities and how they are addressed by competitors, but most importantly whether a high performer can differentiate itself effectively from the bad ones in that particular market.”

Blue Ridge Capital’s top holdings in 4Q14

According to the hedge fund’s 13F filing, Blue Ridge’s top holdings in 4Q14 were Charter Communications (CHTR), Actavis (ACT), Walgreens Boots Alliance (WBA), and Sensata Technologies (ST).

While Blue Ridge’s position in Charter Communications and Sensata Technologies remained unchanged, it reduced its position in Actavis and Walgreens Boots Alliance by 110,000 and 270,000 shares, respectively. Walgreens Boots Alliance has 0.39% exposure to the SPDR S&P 500 ETF (SPY).

In this series, we’ll have a look at the change in the positions of the fund’s top holdings in 4Q14 versus 3Q14. We will also analyze the performance of these stocks versus their industry benchmarks and other benchmarks.

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