Highly successful fund manager Chris Davis is the chairman of Davis Select Advisers, which has a portfolio value of $22.84 billion. It is worth keeping an eye on Davis’ portfolio moves as the fund has generated impressive returns in the last few years with a 33.27% return last year and a 19.07% annualized return over the last three years.

Indeed, if we look at TipRanks we can see that the fund’s measured performance of 89.04% we can see that it significantly outperformed the average hedge fund portfolio (50.15%) and narrowly beat the S&P 500’s measured performance of 81.83%.

What is the secret sauce of Davis’ investing success? Davis is an outspoken advocate of long-term investing as he believes that ultimately the market continues to grow despite crises and uncertainty along the way. He recommends “a disciplined, patient, unemotional investment approach… to reach your long-term financial goals.”

This approach makes it particularly interesting to examine three of Davis’ most intriguing Q4 portfolio moves, he reduced holdings in both Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Amazon.com, Inc. (NASDAQ:AMZN), while making a substantial addition to his Facebook Inc (NASDAQ:FB) holding.

Valeant Pharmaceuticals Intl Inc

In Q4, Davis reduced the fund’s holding in controversial specialty pharmaceutical Valeant by 4.95%. The fund retained 7 million VRX shares with a value of over $100 million (equivalent to 0.45% of the fund’s total portfolio). Since the last filing the price of VRX shares have shot up by 16.12% to the current share price of $16.86. However, this is of limited value given that in the last couple of years share prices have tanked from a high of $257.53 back in July 2015. Prices fell after VRX was called “the pharmaceutical Enron” by Citron Research and was embroiled in a pricing scandal involving the now-defunct pharmacy Philidor.

VRX announced Q4 results on Jan 23 with a $1.22 billion quarterly loss and has now forecast adjusted EPS for 2017 of $5.5 down from the $7 previously forecast. VRX is struggling to get rid of its Salix gastrointestinal business which would help VRX reduce its debt position.

The hedge fund sentiment on VRX is negative with hedge funds decreasing holdings by 5 million shares in the last quarter. Notably, one of VRX’s bigger backers, hedge fund manager Bill Ackman, has also reduced his VRX position by -16.10% to a holding worth $268 million.

Amazon.com, Inc.

This is the fund’s third biggest holding making up 6% of the fund’s portfolio (just behind Wells Fargo and JP Morgan Chase). In Q4 Davis reduced the Amazon holding by -5.88%, although this is a substantial cut the remaining holding of 16.8 million shares is still worth a massive $1.43 billion. Since the last quarter, shares have gained 12.38%- in fact over the last three years shares in the ecommerce company have maintained a fairly upward trajectory to the current share price of $842.70. Many analysts (such as Deutsche Bank’s Lloyd Walmsley, Merrill Lynch’s Justin Post and Cowen & Co’s John Blackledge) are now predicting that AMZN’s price could go over $1,000 within the next 12 months due to the success of cloud business AWS and the Amazon Prime subscription service.

Facebook Inc

Davis upped the fund’s Facebook holding by 37.14% to over 3.3 million shares worth $381.88 million. FB shares have already enjoyed a rise in value of 15.98% since the last filing date of Dec 31 2016. The social media giant is very popular in the market with strong buy sentiment from both analysts and bloggers. Indeed, 34 out of 36 analysts have recommended buying the stock in the last three months. RBC Capital’s Mark Mahaney is one such analyst, calling FB’s “wicked strong” 4Q16 results “fundamentally impressive” due to consistent ad revenue growth and improving core user numbers. The hedge fund picture is more mixed however with hedge fund gurus like Steve Mandel and John Paulson reducing their FB holdings in the last quarter.