Tiger Global Management recently disclosed its portfolio updates for the first quarter of 2020, which ended on March 31.
Tiger Global Management was founded in 2001 by Chase Coleman (Trades, Portfolio) after hedge fund legend Julian Robertson (Trades, Portfolio) gave him $25 million to start his own fund. The fund’s strategy is to deploy capital globally, focusing on big tech stocks as well as early and late stage venture, post-initial public offering, private equity and secondary market small caps. In January, the firm closed on a new $3.75 billion fund for investing in private technology, revealing continued investor enthusiasm for tech companies.
Using the above investing criteria, the firm established three new common stock holdings during the quarter, most notably Athene Holding Ltd (ATH, Financial), and added to several other positions, including Workday Inc. (WDAY, Financial) and Alibaba Group Holding Ltd. (BABA, Financial). It also sold out of two holdings and reduced others, including Uber Technologies Inc. (UBER, Financial).
The firm’s biggest new buy for the quarter was Athene Holding, which it acquired 7,464,626 shares of, impacting the equity portfolio by 1.12%. During the quarter, shares traded at an average price of $40.16.
Athene is a retirement services company that issues, reinsures and acquires retirement savings for a population with an increasing percentage of old and retired persons. The company is headquartered in Bermuda for tax reasons, though its main clientele is in the U.S.
On May 20, shares of Athene traded around $26.69 for a market cap of $5.2 billion and a price-earnings ratio of 14.35. The Peter Lynch chart indicates that the stock is trading near its fair value.
GuruFocus gives the company a financial strength score of 4 out of 10 and a profitability score of 5 out of 10. The cash-debt ratio of 3.91 is higher than the industry median of 2.29. As shown in the chart below, the company has a general uptrend of revenue and net income, though results are affected by the stock market prices of assets.
The firm bought 2,040,000 additional shares of Workday, increasing the stake by 733.81%. The trade had a 1.60% impact on the equity portfolio. Shares were trading at an average price of $169.05 during the quarter.
Headquartered in Pleasanton, California, Workday is an enterprise cloud solutions company that provides software for the management of financial assets as well as human capital.
On May 20, shares of Workday traded around $159.54 for a market cap of $37.22 billion. Morningstar analyst estimates produce a forward price-earnings ratio of 73.97%, though the company has yet to turn a yearly profit.
GuruFocus gives Workday a financial strength score of 5 out of 10 and a profitability score of 3 out of 10. The company’s cash-debt ratio of 1.24 and Altman Z-Score of 4.58 indicate that it is not in danger of bankruptcy. The three-year revenue growth rate is an impressive 26.2%, but the operating margin of -13.85% and net margin of -13.25% confirm that the company is burning more cash than it is generating.
Tiger Global Management added 976,000 shares, or 27.76%, to its Alibaba position, bringing the total number of shares owned to 4,491,662 and impacting the equity portfolio by 1.14%. Shares were trading at an average price of $209.23 during the quarter.
Alibaba is a Chinese multinational conglomerate with holdings in e-commerce, retail, internet and technology assets, among many others. By volume, Alibaba is the largest e-commerce company in the world, with millions of merchants and hundreds of millions of users.
On May 20, shares of Alibaba traded around $215.04 for a market cap of $573.99 billion and a price-earnings ratio of 23.11. According to the Peter Lynch chart, the stock trades above its intrinsic value but below its median historical valuation.
Alibaba has a GuruFocus financial strength score of 7 out of 10 and a profitability score of 10 out of 10. It has a cash-debt ratio of 2.92 and an Altman Z-Score of 6.82, indicating high financial stability. The operating margin of 19.21% is higher than 94.86% of competitors. Revenue and net income have grown steadily in recent years.
The firm reduced its holding of Uber Technologies by 11,640,071 shares, or 53.85%, bringing the total number of shares owned to 9,974,716. The trade had a -1.19% impact on the equity portfolio. During the quarter, shares traded for an average price of $33.
Most famous for being the world’s largest ridesharing company, Uber also offers food delivery, electric bikes and scooters and has various technology projects. The company is based in San Francisco and operates in 63 countries worldwide.
On May 20, shares of Uber traded around $34.38 for a market cap of $59.63 billion. Excluding its first quarter as a publicly traded company, which was affected by divestments, the company has not had a profitable quarter.
GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rating of 1 out of 10. The cash-debt ratio of 1.06 is lower than 62.81% of competitors, while the Altman Z-Score of 0.58 means that the company may need to source additional liquidity to avoid bankruptcy. The operating margin of -60.48% and net margin of -71.48% indicate that the company is burning through significantly more cash than it is earning.
As of the quarter’s end, the firm held shares in 74 stocks valued at a total of $16.61 billion. Its top holdings were JD.com Inc. (JD) with 12.35% of the equity portfolio, Microsoft Corp. (MSFT) with 10.25% and Facebook Inc. (FB) with 8.79%.
In terms of portfolio weighting, the firm was most invested in technology, consumer cyclical and communication services.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.
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