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Chase Coleman Buys Facebook and Raises Stakes in 11 Other Companies

Holly LaFon

Holly LaFon

273 followers
Chase Coleman, a “Tiger Cub” who learned from Julian Robertson at his Tiger Management, has found a niche in Internet stocks. Particular wins came with LinkedIn (LNKD) and Baidu.com (BIDU). The manager of the $5 billion hedge fund Tiger Global Management also holds shares of Amazon.com (AMZN), Priceline.com (PCLN), Yandex NV (YNDX) and Google (GOOG), among other more diversified holdings. Coleman has produced a 21% average return per year since founding his own firm in 2001.

In the first quarter, Coleman revealed one new buy, a classic Internet pick: Facebook (FB). He also made dramatic increases to several other positions: TAL Education (XRS), Arcos Dorados Holding (ARCO), W.R. Grace & Co. (GRA) and Amazon.com (AMZN).

Facebook (FB)

Coleman’s most recent filing shows that he owned 1,958,448 shares of Facebook (FB) at the end of the second quarter of 2012, and may have been an investor before the IPO. The stock’s price has declined almost 50% since its IPO in May.

Facebook released its second quarter results at the end of the July, and had a 29% monthly active users increase, a 32% daily active users increase and a 67% mobile monthly active users, year over year. Revenue also increased 32%, while the company posted a net loss of $157 million, compared to net income of $240 million the prior year, related to stock-based compensation and related payroll tax expenses. Excluding those costs, the company earned $295 million, compared to $285 million the previous year.

Facebook is a worldwide social networking website. Facebook Inc. operates a social networking website worldwide. Facebook Inc. has a market cap of $40.81 billion; its shares were traded at around $19.1885 with and P/S ratio of 11.

TAL Education (XRS)

Coleman increased his holding of TAL Education 1348.9% in quarter, buying 11,590,800 shares at an average price of $11. His holding previously consisted of 800,000 shares he bought in the first quarter of 2011 at an average price of $13. The total at quarter-end was 11,590,800 shares, of 96.6% of shares outstanding.

TAL Education has reported two years of financial results, during which revenue increased from $111 million to $178 million, and net income was relatively flat at $24. The company is increasingly gaining revenue growth from cities other than Beijing and Shanghai, particularly in their small class, contributing 21% during the quarter ended May 31, 2012, compared to 8% the previous year.

It expects revenue in the range of $230.8 million to $239.7 million, representing an increase of 30% to 35% year over year for the year ending Feb. 28, 2013.

TAL Education Group provides K-12 after-school tutoring service in China. Tal Education Group (ADR) has a market cap of $108 million; its shares were traded at around $8.7 with a P/E ratio of 25.7 and P/S ratio of 0.6.

Arcos Dorados Holding Inc. (ARCO)

Coleman increased his Arcos Dorados Holding position 296.3% during the quarter, buying 2,748,499 additional shares at an average price of $16. He had previously been making smaller purchases since the second quarter of 2011 at average prices just over $20 per share. At quarter end his holding consisted of 3,767,144 shares.

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's with its operations divided in Brazil; North Latin America division; South Latin America and the Caribbean division. Arcos Dorados Holding Inc. has a market cap of $2.93 billion; its shares were traded at around $13.96 with a P/E ratio of 28.6 and P/S ratio of 0.8. The dividend yield of Arcos Dorados Holding Inc. stocks is 1.7%.

W.R. Grace & Co. (GRA)

Coleman increased his holding of W.R. Grace & Co. by 215% during the quarter, buying 1,130,000 shares at an average price of $54. He previously purchased 525,000 shares in the first quarter of 2012 at an average price of $54, and ended the quarter with 1,655,000 shares total.

Fellow Tiger Cub Andreas Halvorsen also bought W.R. Grace shares in the second quarter. The company’s growth is concentrated in the Asian Pacific, where earnings increased 11% year over year in the second quarter, and Latin America, where earnings increased almost 13% during the same period. Sales to emerging markets increased 13%. Sales in other regions declined.

W. R. Grace & Co. produces specialty chemicals. They primarily operate through the following two business segments: Davison Chemicals and Performance Chemicals. W.R. Grace & Co. has a market cap of $4.46 billion; its shares were traded at around $58.405 with a P/E ratio of 14.7 and P/S ratio of 1.4. W.R. Grace & Co. had an annual average earnings growth of 6.7% over the past 10 years.

Amazon.com (AMZN)

Coleman increased his holding of Amazon.com by 90% during the quarter, buying 164,000 additional shares to the position he had been trading since the third quarter of 2010. He paid an average of $212 each for the shares.

Amazon.com Inc. seeks to be the world's most customer-centric company, where customers can find and discover anything they may want to buy online. Amazon.com Inc. has a market cap of $108.65 billion; its shares were traded at around $239.19 with a P/E ratio of 297.7 and P/S ratio of 2.3. Amazon.com Inc. had an annual average earnings growth of 25.1% over the past five years.


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