What to Make Of Billionaire Stanley Druckenmiller’s Latest Bets

Stanley Druckenmiller’s Duquesne Family Office reported its 13F holdings report for Q4 2024 on Feb. 14. The billionaire finished 2024 with $3.72 billion in assets invested in 78 securities, averaging nearly $50 million per security. 

Druckenmiller did a bit of everything in 2024’s final quarter, including entirely unloading 21 stocks, reducing his holdings in 15 others, adding to 23 existing stocks, and making 24 new purchases. After all 83 changes, it resulted in a net addition of three stocks from the end of September. 

What’s particularly interesting about the moves in the quarter are the stocks with a call or put options attached to them. The billionaire acquired three new call options during the fourth quarter, added to an existing call position, and sold out of a call and a put position.

Because investors are only required to report calls and puts where they’re long, not short, you can’t know what they’re up to. 

But you can try.  

Key Points About This Article:

• Billionaire Stanley Druckenmiller made 83 moves in the fourth quarter, including several call and put options.
• The most significant move by the Duquesne Family Office was the purchase of three long calls of airline stocks, a sign the good times in air travel haven’t ended. 
• Druckenmiller got out of Microsoft (NASDAQ:MSFT) and deeper into Seagate Technology Holdings (NASDAQ:STX). 
• Sit back and let dividends do the heavy lifting for a simple, steady path to serious wealth creation over time. Grab a free copy of “2 Legendary High-Yield Dividend Stocks” now.

Duquesne’s 3 New Buys Are Ready to Fly Away

It’s unlikely that the family office’s purchase of Delta Air Lines (NYSE:DAL), American Airlines Group (NASDAQ:AAL), and United Airlines Holdings (NASDAQ:UAL) call options was a coincidence. 

In Q4 2024, Druckenmiller bought call options equivalent to 949,500 Delta shares, 2.57 million American Airlines shares, and 226,000 United Airlines shares. If converted, they represent 3.3% of the portfolio. If combined into one stock, it would be Duquesne’s 8th-largest position out of 78.

Furthermore, the family office acquired new common stock positions in all three, acquiring 817,740 Delta shares, 919,928 American, and 1.04 million United. Combined with the call options purchased, Druckenmiller’s airline holdings accounted for 7.81% of the Duquesne portfolio, making airline stocks the second-largest holding at 7.81%.

I don’t think you can conclude anything, but this is a bet on airlines. As I said, you don’t know what short calls and puts might be in play. For now, let’s assume that it holds no short options. 

Why Airline Stocks?

Despite the big gains in 2024, they’re still much more reasonably valued than tech stocks like Microsoft (NASDAQ:MSFT), which Druckenmiller closed out in the fourth quarter by selling the remaining 43,095 shares he owned in the tech giant.  

In addition, the global aviation sector is expected to grow.

“The global aviation sector will continue to expand in the foreseeable future, thanks to rising population, higher income per capita across geographies and continuous economic development between regions. The growing appetite for air travel will drive up the sector’s fuel use,” Travel Weekly reported comments from a recent Bloomberg article about airlines. 

While demand is slowing, the revenue passenger miles of U.S. airlines is higher than it’s been at any time since 2016. The three airlines Duquesne has focused on have the best ability to adjust their capacity to meet a lower demand in the second half of the year, enabling them to continue making money despite a possible slowdown. 

It looks like a winning bet. 

Druckenmiller Closes Out 2 Options

The family office closed out a TPG (NASDAQ:TPG) put in the fourth quarter, equivalent to 217,500 shares in the Texas-based alternative asset manager. At the same time, he closed out a Philip Morris International (NYSE:PM) call equivalent to 472,200 shares. 

Duquesne doesn’t appear to have owned TPG stock in recent quarters. It bought the puts in the third quarter, so it wanted to make money off a decline in TPG’s share price or was part of a larger hedge of other positions.

As for Philip Morris, the sale of 100% of its long calls in the cigarette maker was likely made for two reasons. First, it already owned 1.35 million PM shares, which it acquired along with the calls in the second quarter. It effectively reduced its Philip Morris holdings by 26% with the sale. Secondly, it added 217,620 shares in the fourth quarter, so the calls were likely profitably sold. 

The Billionaire Didn’t Completely Abandon Technology in Q4

The final call option Druckenmiller made in the fourth quarter was Seagate Technology Holdings (NASDAQ:STX), the data storage company. The family office bought call options equivalent to 246,500 shares in the quarter, increasing its holdings in the tech stock by nearly 94%. It first acquired STX calls in the third quarter.

Duquesne finished the year with call options equivalent to 509,500 shares, making it the 25th-largest holding in the portfolio. In addition, it also owned 1.56 million STX shares at the end of the fourth quarter, bringing the portfolio’s combined weight in Seagate to 4.81%. That makes it the sixth-largest position overall. 

The billionaire probably acquired the calls to leverage its existing bet on the tech stock without the same financial outlay. It is estimated to have paid approximately $114 million on its STX shares. The 2,465 call options acquired in the fourth quarter would have cost between 3-10% depending on the strike price and DTE (days to expiration).

Needless to say, it’s a much cheaper way to benefit from the stock’s move higher. Since the beginning of the year, it’s up 16%. 

Another winner. 

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