Li Lu (Trades, Portfolio), founder of Himalaya Capital, disclosed four positions in his third-quarter 13-F filing: Facebook Inc. (FB, Financial), Micron Technology Inc. (MU, Financial), Bank of America Inc. (BAC, Financial) and Alphabet Inc. (GOOG, Financial).
Born and raised in China, Lu graduated with a JD at Columbia Law School and an MBA at Columbia Business School. Lu's firm seeks long-term capital appreciation through investments in companies with strong economic moat, embracing the value investment principles of Ben Graham and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio).
According to the firm's website, Himalaya Capital developed its investing philosophy based on a baseball analogy in which a batter should only hit balls that are "slow, straight and right in the middle" of the sweet spot.
Himalaya Capital primarily focuses on publicly-traded companies in Asia with an emphasis on China. Although most of its holdings date back since the firm's 1997 inception, Himalaya Capital resumed filing 13-F reports to the Securities and Exchange Commission in 2020.
As of the end of the third quarter, the firm's $1.31 billion equity portfolio contained four holdings with a turnover ratio of 20% for the recent quarter. The top three sectors in terms of weight are technology, communication services and financial services, with weights of 41.09%, 36.21% and 22.70%, respectively.
Himalaya owns 1.331 million shares of Facebook, up 722,100 shares, or 118.59%, from the second-quarter holding. The shares, which averaged $257.89 during the third quarter, occupy 26.58% of the equity portfolio.
GuruFocus ranks the Menlo Park, California-based social media giant's financial strength and profitability 9 out of 10 on several positive investing signs, which include a strong Altman Z-score of 18 and an operating margin that outperforms over 92% of global competitors.
Gurus with large holdings in Facebook include Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund and Chase Coleman (Trades, Portfolio)'s Tiger Global Management.
Micron Technology
Himalaya owns 11,476,523 shares of Micron Technology, up 1,567,100 shares, or 15.81%, from the previous-quarter holding. The shares, which averaged $48.39 during the third quarter, occupy 41.09% of the equity portfolio.
GuruFocus ranks the Boise, Idaho-based semiconductor company's profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased over 20% per year on average over the past five years and is outperforming over 70% of global competitors.
Other gurus with holdings in Micron Technology include PRIMECAP Management (Trades, Portfolio) and David Tepper (Trades, Portfolio)'s Appaloosa Management.
Bank of America
Himalaya owns 12,358,987 shares of Bank of America, unchanged from the previous-quarter holding. The shares, which averaged $24.90 during the third quarter, occupy 22.70% of the equity portfolio.
GuruFocus ranks the Charlotte-based bank's financial strength 3 out of 10 on the heels of a debt-to-equity ratio that underperforms 64.11% of global competitors and a cash-to-debt ratio that underperforms 56.41% of global banks, suggesting high financial leverage compared to all global stocks.
Gurus with large holdings in Bank of America include Berkshire and Dodge & Cox.
Alphabet
Himalaya owns 85,900 Class C shares of Alphabet, unchanged from the previous-quarter holding. The shares, which averaged $1,525.89 during the third quarter, occupy 9.63% of the equity portfolio.
GuruFocus ranks the Mountain View, California-based online media giant's profitability 9 out of 10 on several positive investing signs, which include a four-star business predictability rank and profit margins outperforming approximately 80% of global competitors.
See also
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Disclosure: No positions.
Read more here:
- Muhlenkamp & Co.'s Top 4 Trades of the 3rd Quarter
- Top 3rd-Quarter Trades of Ray Dalio's Bridgewater
- Ken Heebner's Top 5 Trades in the 3rd Quarter
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