Viking Global's Top Five Stock Bets

Viking Global Investors is an elite hedge fund run by former Tiger Cub Andreas Halvorsen. The Norwegian billionaire has a nearly unparalleled track record of success in the often fickle stock-picking game. Undoubtedly, much of this can be attributed to his tutelage under Julian Robertson at Tiger Management in the 1990s. 

Big money managers could do well just limiting themselves to the small, but influential, universe of funds that trace their roots back to Robertson and Tiger. As stated earlier, stocks are a fickle business. Trends, styles, strategies, and market dynamics shift like the weather and, as a result, only the sharpest and best-capitalized investment platforms tend to produce year in and year out. Viking is absolutely one of those firms. 

Robertson’s strategy of relying on deep, comprehensive, fundamental research to build alpha-producing portfolios has continued to benefit his former employees and Halvorsen may just be the best of the bunch, which is really saying something. Here is a look at Viking’s top holdings last quarter. 

• Visa V

The top stock in Viking’s portfolio at the beginning of 2023 was Visa, a favorite of many Tiger Cubs. Visa is a huge long-term winner and hardly an under-the-radar name. The company has a consistent, high-volume, global business, a tremendous brand, and a history of world-class management. 

Significant share price appreciation over the last 15 years has Visa near the top of the heap in the financial services industry with a market cap just shy of $500 billion. What jumps out from a technical perspective with this stock is a trading range dating back to 2019. This is a pretty classic pattern and one to keep an eye on. 

A break above $250 could indicate that V is ready to make its next big move higher. On Thursday, the stock closed at $233.95. Viking has a $1.2 billion position, so it is safe to say that Halvorsen is expecting Visa’s long-term uptrend to remain intact. 

• Amazon AMZN

Viking’s second-largest position is none other than Amazon.com. Once again, this pick underscores the attractiveness of high-volume, relatively fast-growing businesses with terrific brand equity and significant international footprints. It also speaks to the amount of capital that Halvorsen needs to put to work, as the number of stocks that can easily absorb $1 billion with no liquidity constraints is limited. 

As of the fund’s last 13-F filing, Viking had just over $1 billion worth of Amazon shares and is sitting on huge profits with the fund’s cost average estimated at $52.38 per share. Jeff Bezos’s company closed Thursday’s trading session at just under $104 and currently sports a market cap just north of $1 Trillion. 

• Elevance Health ELV

Viking was sitting on just under 2 million shares of Elevance Health worth an estimated $960 million at the beginning of the year. Elevance is a health insurance provider and a fairly large company in its own right with a market cap above $100 billion. 

The stock has been a long-term outperformer and the chart continues to look bullish, with shares continuing to sit near all-time high levels despite choppy market conditions. Profit margins at Elevance are not terribly attractive, but the company more than makes up for this due to sheer sales volume. In 2022, sales eclipsed $150 billion and have been consistently growing year-over-year.

• McKesson MCK

Another healthcare name that makes an appearance in Viking’s top positions is Irving, Texas-based McKesson Corp. Similar to the other names on this list, MCK has been a very consistent, long-term winner and the stock remains near all-time high levels. 

Valuation metrics continue to look attractive. Shares trade at a forward P/E of 12.64, a PEG ratio of 0.41, 0.18 times sales, and an Enterprise Value/EBITDA ratio of 10.23 – all these sound extremely reasonable for a company with a predictable business and significant forward-looking growth opportunities. 

The only thing that would appear to be holding McKesson back from breaking out to new all-time highs would be the cautious market environment and rising interest rates. According to hedgefollow.com, Viking is sitting on a small profit in the stock with a cost basis of $322.53 vs. a close of $357.74 on Thursday.

• Microsoft MSFT

Rounding out the top five for Viking is a big winner in Microsoft. Fortunes have been minted in MSFT in recent years due to a historic levitation in the large-cap tech space that Halvorsen’s big bets on AMZN and MSFT suggest he believes can continue despite last year’s sell-off. The hedge fund held 2.2 million shares valued at $822 million as of its latest 13-F filing. 

The characteristics of this company should sound familiar by now – predictable revenues and cash flow, massive international footprint, and blue-chip brand equity. Viking’s cost-basis in this name is $101, which represents a 184% gain as of Tuesday’s close. In real dollar terms, that equates to hundreds of millions of dollars in trading profits for Mr. Halvorsen and Viking’s investors. Well done!    

Featured photo by Carla Santiago on Unsplash