Maverick Capital's 194 Stock Portfolio List | Top 10 Holdings Analyzed

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Maverick Capital’s 194 Stock Portfolio List | Top 10 Holdings Analyzed


Updated on June 27th, 2022 by Nikolaos Sismanis

Founded by Lee Ainslie in 1993, Maverick Capital is a Texas-based long/short equity hedge fund. The fund’s humble beginnings were powered by Mr. Ainslie, raising $38 million of capital by the family of Texas tech-entrepreneur Sam Wyly. Since then, Maverick has grown into one of the largest hedge funds in the state, holding more than $5.69 billion in total Assets Under Management (AUM).

Investors following the company’s 13F filings over the last 3 years (from mid-May 2019 through mid-May 2022) would have generated annualized total returns of -6.0%. For comparison, the S&P 500 ETF (SPY) generated annualized total returns of 16.1% over the same time period.

Note: 13F filing performance is different than fund performance. See how we calculate 13F filing performance here.

You can download an Excel spreadsheet with metrics that matter of Maverick Capital current 13F equity holdings below:

 

Keep reading this article to learn more about Maverick Capital.

Table Of Contents

Maverick Capital’s Investing Strategy & Philosophy

Similar to various hedge funds that we have covered over time, Maverick Capital shares little to no information regarding its operations. However, in a 2006 interview, Mr. Ainslie shared quite a bit of insight into how the fund conducts its business. Considering that these are some fundamental principles, it’s more than likely that they remain true to this day.

As he goes on to explain, Maverick’s analysts are initially trying to understand a company’s business model and whether its growth and return on capital are sustainable over the long term. The fund’s goal is to collect and act on high-quality information that the rest of the market lacks.

Maverick’s sector-specialists have decades of experience in the industry, which has helped them develop long-term relationships with various senior management and employees, giving Maverick that extra reach from its competition.

One of the fund’s core catalysts for allocating capital to a company is trust in its management. As Mr. Ainslie explains, excellent management is what matters the most and can often justify buying equities at a seemingly high valuation.

In terms of holding period, Maverick usually intends to hold its stakes from around 1 to 3 years, though this can easily change based on a company’s ongoing performance.

Maverick Capital’s Portfolio & 10 Most Significant Holdings

Maverick’s portfolio is incredibly diverse, holding 194 individual equities. It seems that its capital allocation focused on creating a highly risk-adjusted portfolio, with multiple sector hedges and a statistics-intensive decision-making process.

However, the company’s 10 most significant holdings account for around 61.8% of its total portfolio, which signals strong and clear confidence when it comes to the fund’s high-conviction picks.

Source: 13F Filings, Author

During the quarter, Maverick initiated a position in the following stocks:

New Noteworthy Buys:

In terms of its sector exposure, Maverick holds significant Consumer Discretionary and Technology positions, avoiding more volatile sectors like Industrials and Energy.

Source: 13F Filings, Author

The fund’s 10 most significant holdings are as follows:

Coupang, Inc. (CPNG)

Coupang is South Korea’s largest retail e-commerce company, boasting a market share of around 20% in the space. The company has embarked on multiple sources of revenues, including third-party merchant services, through which the company charges commissions while receiving advertising and delivery fees from its merchants. Coupang’s other ventures include video streaming services and food delivery. In short, one could refer to Coupang as the “Amazon of South Korea”.

The company has been growing its revenues consistently, but due to reinventing the majority of its operating cash flows back into business, Coupang has yet to deliver a profit. Investors must also be wary of the company’s thin margins, which is a common theme amongst its peers. Gross margins currently stand close to 17.7%, leaving limited room for Coupang to expand the bottom line margins. Still, gross margins have been expanding as the company scales.

Coupang is by far, Maverick’s largest holding, comprising nearly 30% of the fund’s portfolio. That is, despite Maverick trimming its position by around 8% in the previous quarter.

Maverick owns nearly 5.5% of the company’s outstanding shares.

Microsoft (MSFT)

Found amongst the top holdings of the majority of the funds we have covered, Microsoft is Maverick’s second-largest holding, occupying 5.6% of its portfolio. The fund trimmed its position by 11% during the quarter.

Microsoft is a mega-cap stock with a market capitalization of $1.85 trillion.

Supported by the company’s strong profitability, management has been consistently raising buybacks over the past decade to further reward its shareholders. The amount allocated to stock repurchases has reached new all-time highs over the past four quarters, at nearly $31.1 billion.

Revenue growth remains in the double-digits, so it’s likely to see capital returns accelerating moving forward. The company is also growing the dividend at a double-digit rate, though at the current yield, which stands below 1%, investors should expect the majority of their future returns in the form of capital gains.

Despite that, Microsoft’s cash position has been growing continually, with the company currently sitting on top of a massive $104.6 billion cash pile.

Further, while many companies had chosen to utilize the ultra-low interest rate environment over the past several years to raise cheap debt and buy back stock, Microsoft’s remained prudent and thoughtful. Not only are current earnings extensively covering buybacks (~60% buyback “payout ratio”), but long-term debt has been substantially reduced from $76 billion in mid-2017 to around $48.1 billion as of its last report.

It is impressive that a stock with a market capitalization of $1.85 trillion still has such a strong growth momentum. Shares are also trading at a forward P/E ratio of around 23.3, which could signal an opportunity against the company’s strong growth velocity, especially from Azure. Due to Microsoft’s robust growth and financials, it’s likely that investors won’t let shares trade at much of a discount going forward, despite the underlying shaky macroeconomic environment.

T-Mobile US, Inc. (TMUS)

T-Mobile has had a place in Maverick’s portfolio since early Q3-2017. With T-Mobile acquiring Sprint last year, the company should be able to actively compete with AT&T (T) and Verizon (VZ). As a result of the synergies to be unlocked, the company should undergo a growth phase over the next few quarters. Revenues rose by 1.6% to $20.1 billion in the most recent quarter, with service revenues growing to $15.1 billion.

Management raised its merger synergy forecasts following the ongoing integration progress. Around 50% of Sprint’s customer traffic is now carried on the T-Mobile network, while the company is on track to complete Sprint customer network migration mid-year and decommissioning by end of the year.

The company announced that the merger synergies amounted to $3.8 billion in full-year 2021, nearly 3x higher year-over-year, exceeding management’s guidance. In its latest results, T-Mobile raised its merger synergies guidance range to $5.2 billion to $5.4 billion for fiscal 2022, up from the previous range of $5.0 billion to $5.3 billion. Due to increased investor expectations, the stock’s valuation multiple has expanded, currently at a forward EV/EBITDA multiple of 10.2.

The stock currently occupies around 4.9% of Maverick’s portfolio. The fund increased in the company by 2% during the previous quarter. T-Mobile is now the fund’s third-largest holding.

Jones Lang LaSalle Inc (JLL)

Jones Lang LaSalle is a relatively new position in Maverick’s portfolio. The fund initiated a position in the company during Q2-2021.

Jones Lang LaSalle offers various real estate services, such as agency leasing and tenant representation services, capital market services, acquisition, corporate advisory, and investment sales and acquisitions services.

The company’s performance remained relatively stable during the pandemic, with growth returning rather quickly. Over the past few quarters, Jones Lang has achieved new records in both its revenues and net income levels. The company is not paying dividends but instead repurchasing and retiring shares as a form of capital returns.

Jones Lang LaSalle is Maverick’s fourth-largest holding, making up around 4.5% of its portfolio. The fund left its position unchanged during the quarter.

Visa (V)

Visa is the world’s leader in digital payments, with activity in more than 200 countries. The stock went public in 2008, and its IPO has proven to be one of the most successful in U.S. history. The company’s global processing network provides secure and reliable payments around the world and is capable of handling more than 65,000 transactions a second. In the fiscal year 2021, the company generated nearly $12.3 billion in profit.

On April 26th, 2022, Visa reported Q2 fiscal year 2022 results for the period ending March 31st, 2022. (Visa’s fiscal year ends September 30th.) For the quarter, Visa generated revenue of $7.2 billion, adjusted net income of $3.8 billion, and adjusted earnings-per-share of $1.79, marking increases of 25%, 27%, and 30%, respectively.

These results were driven by a 17% gain in Payments Volume, a 47% gain in Cross-Border Volume, and a 19% gain in Processed Transactions. As a result of economic sanctions imposed on Russia by the U.S., European Union, United Kingdom, and others, Visa announced in March 2022 that they were suspending operations in Russia and since they are no longer generating revenue from activities related to Russia. Russia accounted for roughly 4% of total net revenues for the first half of fiscal 2022 and the full year of fiscal 2021.

During the quarter, Visa returned $3.7 billion to shareholders via dividends and share repurchases.

Visa is Maverick’s fifth-largest position. While the fund trimmed its position by 27% during the latest quarter, it still accounts for 4.3% of its total holdings.

Meta Platforms, Inc. (META)

The social media giant is Maverick’s sixth-largest holding, accounting for 2.9% of its portfolio. The fund’s long-term commitment to Meta (or Facebook at the time) dates back to Q1-2015. Since then, Maverick has added its position gradually, showing great confidence in the investment.

Meta is a tremendous cash cow, but with a problem. With strong financials, a healthy balance sheet, and the best social media platform for advertisers, Meta has been dominating the social media industry. The company reported an all-time high bottom line of $19.37 billion in FY2021, amid great user growth, notwithstanding now decelerating to the single digits.

For these reasons, it would not be a complete surprise if Meta paid a dividend at some point in the future.

On the other hand, the stock has failed to attract a higher multiple, as the steep scrutiny it has faced over the past few years have had an impact on the valuation. Speculation over the company’s huge spending toward “The Metaverse” has also spurred uncertainty. The stock is only trading at around 16.0 times its underlying earnings, despite its consistent profitability and future growth prospects.

With its ARPU (average revenue per user) still very strong, Meta’s financials are more than likely to continue expanding rapidly. Meta’s investment case today does not only include the potential for a significant upside but also comes with a great margin of safety.

If such a valuation expansion never appears, and Meta continues to trade at a forward P/E of around 16.0, at an EPS growth rate of 10%-15% in the medium term (which the current user and APRU growth trajectory and ongoing stock repurchases could reasonably sustain), investors should achieve equally satisfactory returns with a constant valuation multiple.

Meta Platforms stock currently accounts for 2.9% of the fund’s total holdings.

Humana Inc. (HUM)

Humana offers medical and supplemental benefit plans to individuals. The company also has a contract with Centers for Medicare and Medicaid Services to administer the Limited Income Newly Eligible Transition prescription drug plan program as well as contracts with numerous states to offer Medicaid, dual eligible, and long-term support services benefits.

The company has been growing its top and bottom line consistently over the years. Investors must be wary, however, of the company’s low-margin business model, as is the case with almost all of its industry peers. Specifically, the company’s net margins have hovered between 1% and 5% historically.

Humana is Maverick’s seventh-largest holding, accounting for around 2.9% of its total public-equity portfolio.

Crown Holdings, Inc. (CCK)

Crown Holdings, Inc. develops, manufactures, and markets packaging products and equipment for consumer and industrial goods globally. The company’s products include steel and aluminum cans for the food and beverage industries.

The company experiences robust demand for its products, which was the case even during the pandemic. That said, its net income remains rather compressed as the business model is subject to quite thin margins.

The company resumed its dividend payments after not paying a dividend since 2000. Still, the yield remains relatively tiny. The stock currently trades close to 11.5 times its forward net income, which is just below its decade average.

Maverick has been invested in Crown Holdings since Q4-2019. It is now the fund’s eighth-largest holding, making up around 2.6% of its portfolio. Maverick trimmed its position by roughly 18% during the previous quarter, selling 214,857 shares.

Oak Street Health Inc. (OSH)

Oak Street Health aims to provide and manage Medicare-eligible patients’ complete healthcare via capitated, value-based contracts. The company has created a new care platform as a result with the capability to drive the substantial improvements in expense and quality the current healthcare system is in need of.

While the company has been growing its revenues on a sequential basis consistently. However, its losses have also been widening. Similar to several of Maverick’s other picks, Oak Street’s margins are extremely thin. Specifically, gross margins can hardly touch the double digits.

Maverick has been invested in Oak Street since Q3-2020. The fund boosted its Oak Street position by 29% during the quarter. It is now Maverick’s ninth-largest holding.

Uber Technologies, Inc. (UBER)

Uber is Maverick’s tenth-largest holding. The stock is currently occupying around 2.4% of the fund’s portfolio.

While the pandemic reduced the demand for regular transportation, Uber has found its footing again amid gradual recovery.

Uber’s revenues took a significant between 2020-2021. The company was losing billions per quarter in the midst of the pandemic. Following an increased demand for everyday transportation, the company reported record revenues in its latest quarterly report. while delivering a positive bottom line.

Then again, the company recorded a massive loss of $5.9 billion. This included a $5.6 billion headwind associated with Uber’s equity investments, largely due to aggregate unrealized losses connected to the revaluation of Uber’s Grab, Aurora, and Didi stakes.

Further, the net loss includes $359 million in stock-based compensation expenses. In that regard, the company broke even on a non-GAAP basis. Still, it also means that the company overpaid massively for its previous investments. And while stock-based compensation may be a non-cash item, it still means that investors are getting diluted, with no value creation whatsoever amid a lack of real profits.

Nevertheless, Maverick boosted its Uber position by 15% during the last quarter based on its latest 13F filing.

Final Thoughts

Maverick’s operations and investing principles remain relatively unknown. Still, Mr. Ainslie’s 15-year old interview sheds plenty of light on how the fund’s capital allocation is executed, including assigning a high significance to a company’s management team.

The fund’s portfolio is quite enormous, containing hundreds of equities. However, the company’s 10 largest significant holdings occupy around 62% of its total AUMs, making for some compelling picks for retail investors to consider.

 

Additional Resources

See the articles below for analysis on other major investment firms/asset managers:

If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly:

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