Himalaya Capital Management, the firm founded by Li Lu (Trades, Portfolio), disclosed in a regulatory portfolio update that it expanded its position in Alphabet Inc. (GOOGL, Financial)(GOOG, Financial) during the fourth quarter of 2022. The firm’s 13F equity portfolio also contained positions in Micron Technology Inc. (MU, Financial), Bank of America Corp. (BAC, Financial), Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) and Apple Inc. (AAPL, Financial).
Born and raised in China, Li received a Bachelor of Arts degree, a Juris Doctor degree and an MBA at Columbia University. His firm embraces the value investing principles of Benjamin Graham and Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) co-managers Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio). Li gave an example of his firm’s philosophy using a baseball analogy: divide the strike zone into many cells and swing only at “the best” cells.
While the firm primarily focuses on Chinese investments, Himalaya has resumed filing 13Fs for its U.S.-based holdings. As of December 2022, the firm’s $1.93-billion 13F equity portfolio contains six stocks with a quarterly turnover ratio of 7%.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Alphabet
The firm invested in 1,595,300 Class A shares of Alphabet (GOOGL, Financial), expanding the position by 168.28% and its equity portfolio by 7.30%.
Class A shares of Alphabet averaged $95.03 during the fourth quarter; the stock is significantly undervalued based on its price-to-GF-Value ratio of 0.66 as of Wednesday.
The Mountain View, California-based online search giant has a GF Score of 95 out of 100 based on a rank of 10 out of 10 for profitability and growth, a financial strength rank of 9 out of 10, a GF Value rank of 8 out of 10 and a momentum rank of 4 out of 10.
Himalaya also owns 3,044,000 Class C shares of Alphabet (GOOG, Financial), giving the position 14.01% equity portfolio weight. Shares averaged $95.44 during the fourth quarter of 2022.
Other gurus with holdings in Alphabet include Ken Fisher (Trades, Portfolio)’s Fisher Investments and PRIMECAP Management (Trades, Portfolio).
Micron Technology
Himalaya owns 11,476,523 shares of Micron Technology (MU, Financial), giving the position 29.76% of equity portfolio space.
Shares of Micron Technology averaged $54.72 during the fourth quarter; the stock is fairly valued based on its price-to-GF-Value ratio of 0.96 as of Wednesday.
The Boise, Idaho-based dynamic random access memory chipmaker has a GF Score of 87 out of 100, driven by a rank of 8 out of 10 for profitability, growth and financial strength despite GF Value and momentum ranking just between 5 and 6 out of 10.
Other gurus with holdings in Micron Technology include PRIMECAP Management (Trades, Portfolio) and Andreas Halvorsen (Trades, Portfolio)’s Viking Global LP.
Bank of America
Himalaya owns 14,586,987 shares of Bank of America (BAC, Financial), giving the position 25.07% equity portfolio weight.
Shares of Bank of America averaged $34.44 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.87 as of Wednesday.
The Charlotte, North Carolina-based bank has a GF Score of 70 out of 100 based on a rank of 7 out of 10 for momentum and GF Value, a profitability rank of 5 out of 10, a growth rank of 4 out of 10 and a financial strength rank of 3 out of 10.
Bank of America’s financial strength ranks 3 out of 10 on several warning signs, which include cash-to-debt and debt-to-equity ratios underperforming more than 62% of global competitors.
Other gurus with holdings in Bank of America include Buffett’s Berkshire and Dodge & Cox.
Berkshire Hathaway
The firm owns 897,749 Class B shares of Berkshire Hathaway (BRK.B, Financial), giving the position 14.39% equity portfolio weight.
Class B shares of Berkshire Hathaway averaged $296.98 during the fourth quarter; the stock is modestly overvalued based on its price-to-GF-Value ratio of 1.14 as of Wednesday.
The Omaha, Nebraska-based insurance conglomerate has a GF Score of 88 out of 100 based on a growth rank of 10 out of 10, a momentum rank of 9 out of 10, a profitability rank of 8 out of 10, a financial strength rank of 5 out of 10 and a GF Value rank of 3 out of 10.
Berkshire’s profitability ranks 8 out of 10 on the heels of a 3.5-star business predictability rank, which suggests consistent revenue and earnings growth over the past 10 years.
Apple
Himalaya owns 759,600 shares of Apple (AAPL, Financial), giving the position 5.12% of equity portfolio space.
Shares of Apple averaged $142.91 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF-Value ratio of 0.90 as of Wednesday.
The Cupertino, California-based consumer electronics giant has a GF Score of 95 out of 100 driven on a rank of 10 out of 10 for profitability and growth, a rank of 7 out of 10 for financial strength and GF Value, and a rank of 5 out of 10 for momentum.
Other gurus with holdings in Apple include Buffett’s Berkshire and Spiros Segalas’ Harbor Capital Appreciation Fund (Trades, Portfolio).
