Southpoint Capital's Q3-Q4 Holdings: Top Gains and Losses in their Portfolio

As we approach the end of the year, fund managers are finalizing their books and preparing for 2023. Southpoint Capital Advisors LP's Q3 and Q4 13F filings suggest that they're bullish on a few stocks despite a rocky market. In this article, we'll go over some of the holdings that have changed significantly in the past quarter, providing insights into what's driving the fund's returns.

Ferguson PLC (FERG)

One of the most significant additions to Southpoint Capital's portfolio is Ferguson PLC (FERG), a UK-based supplier of heating and plumbing products. They increased their holdings by 200,000 shares, taking the total to 2.6 million and making Ferguson one of their top five holdings. The stock has gained 33.6% in value since Q3 this year, reflecting the company's strong earnings reports and higher demand now that the economy is reopening.

Constellation Energy Corp (CEG)

Southpoint Capital increased its stake in Constellation Energy Corp (CEG) by 750 thousand shares, bringing the total to 3.75 million. While the stock has only increased by 11% in value, it's still notable given that the company is a recognized leader in the clean energy sector. CEG's renewable energy portfolio includes wind and solar power plants across the United States, which is a sign that Southpoint expects growth in renewable energy adoption.

Synchrony Financial (SYF)

Synchrony Financial (SYF) is another of Southpoint's top holdings, and they increased their stake by a massive 1.6 million shares, taking the total to 9.3 million. Notably, SYF has gained over 40% in value since Q3 2022, despite the broader market's choppiness. Synchrony provides consumers with private label credit cards and other financial services in partnership with retailers, which continues to be a profitable business strategy.

Vail Resorts Inc (MTN)

Southpoint nearly doubled its position in Vail Resorts Inc (MTN), a major player in the snow sports industry. They added 275 thousand shares, taking the total to 1.1 million. Though it's not one of their largest holdings, it's an important one given the stock's 48.5% gain since Q3 this year. With heavy snowfall in parts of the United States, this winter could be a lucrative one for MTN.

CNH Industrial NV (CNHI)

CNH Industrial NV (CNHI) retains its position as Southpoint's largest holding, with the fund holding onto 15 million shares, unchanged since Q3. CNHI's stock has gained 43.8% in value since Q3, reflecting the company's strong earnings reports and the recovering global economy. CNHI is a leading industrial conglomerate with activities in the agriculture, construction, and transmissions market.

Schwab Charles Corp (SCHW)

Southpoint sold 750 thousand shares of Schwab Charles Corp (SCHW), bringing their total holdings down to 1.9 million shares. The stock had experienced a bearish run that coincided with the broader market downturn, so Southpoint's decision to reduce their stake may have been motivated by macro pressure. Nonetheless, reducing their position by nearly a third reflects the fund's skepticism over SCHW's growth prospects.

Uber Technologies Inc (UBER)

Southpoint completely sold out of its position in Uber Technologies (UBER), selling all 5.3 million shares it held in the company. Uber's stock has been fluctuating wildly due to regulatory risks, labor disputes, and company restructuring over the past year. It's not clear why Southpoint chose to exit entirely, but it's possible they lost faith in Uber's ability to grow sustainably.

Conclusion

Southpoint Capital Advisors LP's Q3-Q4 13F filings reveal that the fund is adjusting its portfolio according to the market's dynamics, investing in stocks in renewable energy, plumbing parts, snow sports, and digital commerce. The winners in their portfolio have gained significantly, reflecting investors' optimism about the future of those companies. At the same time, they have reduced their exposure to stocks like SCHW and exited altogether from one of their former significant holdings, Uber Technologies. As always, the coming year's performance will depend on macroeconomic forces, political events, and other factors outside of individual company performance.