I’d like to introduce you to the three largest stock positions from the portfolio of top U.S. investor Alan Fournier. Before Fournier started his hedge fund, Pennant Capital Management, he gained extensive experience in the financial industry – learning from some of the best investment managers around. Fournier started his career in the late 1980s at Bernstein, a significant securities broker at the time, as an equity analyst. There, he served some of the best hedge funds as clients.
David Tepper, one of the most successful hedge fund managers of the last 20 years, became aware of Alan Fournier’s talent at that time. Fournier worked for Tepper’s hedge fund Appaloosa Management for several years. Fournier later started his hedge fund, Pennant Capital Management, which became one of the most successful funds in recent years.
Pennant’s equity positions have returned about 700% in U.S. stocks since the beginning of 2003, while the key U.S. benchmark index, the S&P 500, including dividends, has returned just under 200% over the same period. Fournier invests in both undervalued value stocks and high-growth stocks with strong price momentum.
Blindly following a single top investor without knowing the exact background of his investments is undoubtedly not advisable. But if you are looking for promising U.S. stocks, Alan Fournier’s stock investments can provide valuable suggestions. These are the three largest stock positions currently held by Pennant Capital Management.
Micron Technology (NASDAQ:MU)
The largest position, with a portfolio weighting of 12.5%, is Micron Technology stock. Currently, Fournier holds a block of shares worth $45.2 million in the company. The hedge fund manager repurchased his first shares in the second quarter of 2019. After interim purchases, Fournier recently reduced the position slightly by 15%.
Micron Technology is a technology company with headquarters in Boise, Idaho, USA, and is one of the five largest semiconductor manufacturers in the world. Micron mainly manufactures memory elements for computers and has production sites in the USA, Italy, Singapore, and Japan. Today, Micron is the only DRAM manufacturer in the United States.
In the first quarter, the group increased its sales from $5.43 billion to $7.42 billion. It ended up with a net profit of $1.73 billion on its books, up 115% year-over-year.
Dish Network (NASDAQ:DISH)
The second-largest position is Dish Network stock, with a 12.3% weighting in Pennant Capital Management’s portfolio. The position has an equivalent value of nearly $44.7 million and was minimally reduced (-5%) in the last quarter.
Dish Network is a U.S. television satellite operator for the reception of satellite television and Internet access via satellite. For this purpose, the company also markets corresponding set-top boxes and hard disk recorders under the “Hopper” and “DISH anywhere” brands and the Tailgater portable satellite antenna.
In the first quarter, revenues climbed 39% to $4.49 billion. On the bottom line, Dish Network earned $630 million in profits, up significantly from $73 million in the comparable year-ago quarter.
Intel Corporation (NASDAQ:INTC)
The third-largest equity position, with a portfolio weighting of 12.2%, is the stock of semiconductor manufacturer Intel. Fournier currently holds a block of shares worth a good 44 million dollars in the company. The fund manager recently added the position to his portfolio and gave it a high weighting right from the start.
In the past second quarter, Intel’s semiconductor giant achieved a 2% increase in sales to 18.5 billion dollars. As a result, the profit amounted to 5.2 billion dollars or 1.28 dollars per share. Analysts, on average, had expected earnings of $1.07 per share on revenue of $17.8 billion.
Now, the company is in a state of upheaval: In February, Pat Gelsinger took the helm as company boss and is now doing everything in his power to recapture Intel’s technological leadership of the semiconductor industry. In addition, the company’s position in contract manufacturing is to be strengthened with high investments.