Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Hedge Fund Guru Boykin Curry cuts UNH, MSFT; adds Ecolab

Top New York hedge fund manager Boykin Curry of the $25.89 billion Eagle Capital Management, L.L.C has made several key portfolio moves according to the latest 13F forms filed with the SEC. In Q3 the fund offloaded positions in UnitedHealth Group Inc. (NYSE:UNH) and Microsoft Corporation (NASDAQ:MSFT) while upping its stake in Ecolab Inc. (NYSE:ECL).

Ravenel Boykin Curry IV took up the management of Eagle Capital Management from his parents, Ravenel Boykin Curry III and Beth Curry, in 2001. Of his mother, Boykin says “Her financial savvy came from having a generally sharp mind, plus curiosity, plus a sense, always, that she might have everything wrong… That led her to keep asking questions and to keep revising and refining her thesis. It wasn’t financial brilliance; it was tenacious humility.”

He graduated from Yale University in 1988 with a degree in Economics and earned an MBA from Harvard Business School in 1994. Mr. Curry began his investment career at Miller Anderson & Sherrerd/Morgan Stanley Asset Management after which he joined Bain & Company as Strategy Consultant. He also worked as Portfolio Manager at Kingdon Capital from 1997 to 1999.

Eagle Capital Management has historically beaten the S&P 500 index. The fund has a measured performance of 107.2% when compared to the 63.78% of S&P 500, while the annualized return of the fund is in high teens at 19.10% over the past 3 years. Five-star Boykin Curry is currently ranked a very impressive #11 out of 203 Hedge Funds on TipRanks.

Let’s now dive into Boykin’s key Q3 moves.

UnitedHealth Group Inc. (NYSE:UNH)

Over the past few quarters, Mr. Curry has been consistently lowering the fund’s stake in UNH. This time too Eagle Capital trimmed its holdings of UnitedHealth Group by another 3.00%. However, even after the latest cut, UNH still accounts for 4.41% of the overall portfolio with a total value of $1.14 billion. And so far this holding has made a 7.35% gain since the last filing.

The Minnesota based healthcare company had a robust third quarter, beating both earnings and revenue estimates. The current out-performance of the stock, trading near its 52-week high, is based on multiple positive factors. This includes higher revenues, strength in both its segments, UnitedHealthcare and Optum, and membership growth. Indeed the stock has a Strong Buy analyst consensus rating on TipRanks. In the last three months, all 10 analysts covering the stock have published bullish ‘buy’ ratings. The average analyst price target meanwhile stands at $225.40 which translates into a sizable 17.21% upside from the current share price. Top Leerink Swann analyst Ana Gupte has the highest price target on UNH of $240. She raised her price target from $225 following the “solid” Q3 that offers an “impressive” debut for CEO David Wichmann.

Microsoft Corporation (NASDAQ:MSFT)

Technology has always been one of the top sectors of the portfolio of Eagle Capital- and Microsoft was previously one of Eagle’s favorite tech stocks. However, since the past year, Boykin Curry has drastically lowered the stake in MSFT and continued to do it in this quarter as well. As per latest 13F filings, the stake in MSFT has been reduced by another 4.56%, resulting in a total value of $1.75 billion for the stock. This could very well be an act of locking in profits, especially since the fiscal year ends in November.

Microsoft’s booming cloud business currently has a larger data-center footprint compared to its peers such as AWS and Google. The growth in Azure and Commercial Cloud is also expected to stay strong.

Analysts generally remain quite positive regarding the performance of MSFT. Five-star Oppenheimer analyst Timothy Horan believes Microsoft is the best-positioned company for enterprise cloud adoption and has proven it can execute on its hybrid cloud strategy with Azure Stack. Additionally, he says the legacy business revenue has held up well, while new products drive growth. In contrast Moffett Nathanson analyst Adam Holt believes that MSFT has a limited earnings growth potential. Holt expects only mid-single-digit earnings growth at best for the tech stock and sees limited room for valuation expansion.

TipRanks analytics demonstrate MSFT as a Strong Buy stock. Out of 17 analysts polled in the last 3 months, 15 are bullish on MSFT stock, 1 remains sidelined and 1 has a bearish outlook. With a return potential of nearly 9.51%, the stock’s consensus target price stands at $90.38.

Ecolab Inc. (NYSE:ECL)

Boykin Curry showed a bullish sentiment on Ecolab, a blue-chip water, hygiene, and energy conglomerate. The fund has added 0.31% to ECL, translating to a total value of $1.13B. Despite the lower earnings expectations due to hurricane-related disruptions, ECL management delivered a strong third-quarter 2017 earnings and sales growth with Global energy revenue (+3.3%), Global industrial revenue (+4.4%), Global institutional revenue (7.2%) managing a good growth rate. According to recent news, Audax Private Equity has closed its previously announced buyout of Ecolab‘s equipment care business. No financial terms were disclosed.

Boykin’s exuberance does not seem to be shared by the Street, as TipRanks analytics reveal ECL as a Moderate Buy. Out of 8 analysts polled in the last 3 months, 3 are bullish while 5 remain sidelined on the stock. With an upside potential of nearly 3.87%, the stock’s consensus target price stands at $137.25.

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