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Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

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GuruFocus.com
·3 min read
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- By James Li

Generation Investment Management, the firm co-founded by Al Gore (Trades, Portfolio) and David Blood, disclosed this month that its top four buys during the fourth quarter of 2020 included a new position in Alibaba Group Holding Ltd. (NYSE:BABA) and boosts to its Equifax Inc. (NYSE:EFX), Baxter International Inc. (NYSE:BAX) and Illumina Inc. (NASDAQ:ILMN) holdings.


Gore, a former vice president of the United States, co-founded the London-based firm in 2004. Generation seeks long-term capital appreciation by investing in the stock of companies that strategically manage their economic, social and environmental performances.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Generation applies a bottom-up, fundamental analysis-driven approach to investing. As of December 2020, the firm's $22.41 billion equity portfolio contains 41 stocks, with two new positions and a turnover ratio of 9%. The firm's top three sectors in terms of weight are technology, health care and industrials, representing 40.51%, 30.18% and 8.04% of the equity portfolio.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Alibaba

Generation purchased 1,544,863 shares of Alibaba (NYSE:BABA), giving the stake 1.6% weight in its equity portfolio. Shares averaged $227.43 during the fourth quarter; the stock is modestly undervalued based on Friday's price-to-GF Value ratio of 0.73.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

GuruFocus ranks the Chinese e-commerce giant's profitability 8 out of 10 on several positive investing signs, which include consistent revenue growth and profit margins and returns outperforming over 90% of global competitors.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Gurus with large positions in Alibaba include Ken Fisher (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Equifax

Generation purchased 3,609,565 shares of Equifax (NYSE:EFX), expanding the position 176.09% and the equity portfolio 3.11%. Shares averaged $168.28 during the fourth quarter.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

GuruFocus ranks the Atlanta-based credit bureau's financial strength 4 out of 10: Although the company has a high Piotroski F-score of 8 and a strong Altman Z-score of 3.18, debt ratios are underperforming over 65% of global competitors.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Baxter

The firm added 5,566,649 shares of Baxter (NYSE:BAX), increasing the position 46.94% and the equity portfolio 1.99%. Shares averaged $79.20 during the fourth quarter.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

GuruFocus ranks the Deerfield, Illinois-based medical device company's profitability 7 out of 10 on the back of profit margins and returns outperforming over 70% of global competitors.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Illumina

The firm purchased 784,337 shares of Illumina (NASDAQ:ILMN), boosting the position 66.51% and the equity portfolio 1.29%. Shares averaged $327.99 during the fourth quarter.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

GuruFocus ranks the San Diego-based medical research company's profitability 8 out of 10 on several positive investing signs, which include a 3.5-star business predictability rank and a net profit margin that outperforms over 85% of global competitors.

Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management
Top 4 4th-Quarter Buys of Al Gore's Generation Investment Management

Disclosure: No positions.

Read more here:

  • Top 5 4th-Quarter Trades of Chris Davis' Firm

  • Top 4 Broadest-Owned Tech Stocks as of the 4th Quarter

  • Top 4 Holdings of Nelson Peltz's Trian Fund Management



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This article first appeared on GuruFocus.