A review of Edgewood Management’s stock portfolio sheds light on the fund’s bold stock predictions. Its largest holding is a $1.6 billion bet on Visa Inc (NYSE: V).
Edgewood Management’s Latest Form 13F Filing
According to its website, Edgewood Management’s mission is to produce sustainable long-term performance investing in growth companies it deems to be of high quality. The firm works to achieve this by owning companies that have had significant earnings growth and can be purchased at a discount to Edgewood’s projected fair value. Its goal is to hold its positions for three to five years. Alexander Farman-Farmaian is the Vice Chairman at Edgewood and implemented the current valuation approach of the company’s Investment Committee.
On February 13th, Edgewood Management filed its quarterly Form 13F regulatory filing. I reviewed the filing to gain a glimpse into the firm’s large portfolio.
Edgewood Management’s stock portfolio totals $22.2 billion according to the latest filing. The list value of stock holdings is up 2.2% when compared to the last quarter. As a benchmark, the S&P 500 was up 6.1% over the same period.
Quarter-over-Quarter Turnover (QoQ Turnover) measures the level of trading activity in a portfolio. Edgewood Management’s QoQ Turnover for the latest quarter was 6.7%, so the firm likely has high conviction in these holdings as indicated by the low turnover ratio.
Edgewood Management’s Largest Holdings
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below at the Edgewood Management page. The following table summarizes the firm’s largest holdings reported in the last filing:
| Ticker | Name | Holding ($mil) | % Of Portfolio |
|---|---|---|---|
| V | VISA INC | $1,628.0 | 7.3% |
| AMZN | AMAZON COM INC | $1,423.1 | 6.4% |
| FB | FACEBOOK INC | $1,298.7 | 5.8% |
| CTSH | COGNIZANT TECHNOLOGY | $1,216.3 | 5.5% |
| PCLN | PRICELINE GRP INC | $1,216.2 | 5.5% |
| CELG | CELGENE CORP | $1,203.6 | 5.4% |
| GOOGL | ALPHABET INC | $1,197.4 | 5.4% |
The seven positions above represent 41.3% of the fund’s total portfolio.
Edgewood Management’s 7 Largest Purchases
I also used finbox.io to find Edgewood Management’s largest buys last quarter. Here’s the list of the biggest stock purchases determined by comparing the last two filings:
| Ticker | Name | Purchased ($mil) | % Of Portfolio |
|---|---|---|---|
| INFO | IHS MARKIT LTD | $784.9 | 3.5% |
| ECL | ECOLAB INC | $242.0 | 3.2% |
| PCLN | PRICELINE GRP INC | $129.7 | 5.5% |
| CELG | CELGENE CORP | $101.9 | 5.4% |
| SCHW | SCHWAB CHARLES | $26.6 | 4.8% |
| V | VISA INC | $25.2 | 7.3% |
| FB | FACEBOOK INC | $24.7 | 5.8% |
The largest stock purchase for the quarter was IHS Markit Ltd. Edgewood Management increased its position in the company by $784.9 million and the stock now represents 3.5% of the firm’s portfolio.
Edgewood Management’s Fastest Growing Stocks
Analysts often look at companies as either thriving, surviving or dying. Analyzing a company’s revenue growth can help distinguish between these stages. Growth of over 10% typically signifies the core business is doing very well and the company’s products and services are in demand.
The table below lists 7 stocks in Edgewood Management’s portfolio that have strong top-line growth.
| Ticker | Name | Revenue Growth | % Of Portfolio |
|---|---|---|---|
| FB | FACEBOOK INC | 47.1% | 5.8% |
| MAR | MARRIOTT INTL | 46.7% | 0.0% |
| NVDA | NVIDIA CORP | 46.2% | 4.1% |
| VRTX | VERTEX PHARMA | 38.2% | 0.0% |
| ETE | ENERGY TRANSFER EQUITY | 37.1% | 0.0% |
| NFLX | NETFLIX INC | 32.4% | 2.7% |
| AMZN | AMAZON COM INC | 25.9% | 6.4% |
Facebook is the fastest growing company in Edgewood Management’s portfolio. The company’s LTM total revenue of $40,653 million is up 47.1% year-over-year. Very impressive. Note that the stock price is also up 30.4% over the last twelve months.
Edgewood Management’s Best 1-Month Performance Stocks
To find stocks in the firm’s portfolio that may be popular at the moment or have tailwinds moving forward, I ranked the firm’s holdings by price appreciation. The ranking table below lists the stocks in Edgewood Management’s portfolio by stock price performance over the last 30 days.
| Ticker | Name | Price 1-mo Ago | Current Price | % Change 1-mo |
|---|---|---|---|---|
| TWTR | TWITTER INC | $25.41 | $33.24 | 30.8% |
| NFLX | NETFLIX INC | $221.23 | $260.65 | 17.8% |
| ABBV | ABBVIE INC | $100.34 | $110.98 | 10.6% |
| AMZN | AMAZON COM | $1,305.00 | $1,417.00 | 8.6% |
| EA | ELECTRONIC ARTS INC | $113.13 | $121.43 | 7.3% |
| TRIP | TRIPADVISOR | $36.54 | $38.60 | 5.6% |
| HAS | HASBRO INC | $91.90 | $95.95 | 4.4% |
Twitter’s stock price has increased by 30.8% over the last month. Investors may want to take a closer look at the company, especially with ‘smart money’ backing it.
Managers with more than $100 million in qualifying assets under management are required to disclose their holdings to the SEC each quarter via 13F filings. Qualifying assets include long positions in U.S. equities and ADRs, call/put options, and convertible debt securities. Shorts, cash positions, foreign investments and other assets are not included. It is important to note that these filings are due 45 days after the quarter end date. Therefore, Edgewood Management’s holdings above represent positions held as of December 31st and not necessarily reflective of the fund’s current stock holdings.
Author: Andy Pai
Expertise: financial modeling, mergers & acquisitions
Andy is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights:
- Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores.
- Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets.
Andy can be reached at andy@finbox.io.
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.