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James Li
James Li
Articles (1398)  | Author's Website |

Top 5 Buys of Philippe Laffont's Coatue Management in the 2nd Quarter

Former tiger cub's firm releases quarterly portfolio

Coatue Management, the firm founded by Philippe Laffont (Trades, Portfolio), disclosed last week that its top five buys for the second quarter were in Agora Inc. (NASDAQ:API), The Walt Disney Co. (NYSE:DIS), PayPal Holdings Inc. (NASDAQ:PYPL), Boeing Co. (NYSE:BA) and Zoom Video Communications Inc. (NASDAQ:ZM).

A former mentee of Tiger Management founder Julian Robertson (Trades, Portfolio), Laffont started his New York-based firm in 1999, focusing primarily on the technology and consumer cyclical sectors. As of the quarter-end, the two sectors occupy 29.84% and 16.33% of Coatue's $11.37 billion equity portfolio. Despite this, communication services has the largest sector weight at 30.25%.

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Coatue applies long and short investing strategies and selects stocks using fundamental analysis and top-down stock picking. The equity portfolio contains 88 stocks as of the quarter-end, with 37 new holdings and a turnover ratio of 34%.

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Agora

Coatue purchased 37,500,540 shares of Agora, giving the stake 17.34% weight in its equity portfolio. Shares traded at $44.17 on June 30; the company priced on June 25 its initial public offering of 17.5 million American depository shares at $20 per ADS.

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Agora, which has headquarters in Shanghai and Santa Clara, California, offers a platform in which software developers can embed real-time video and voice functionalities into their applications through the company's application programming interfaces. The company said this week that revenue for the quarter was $33.9 million, up 127.5% from the prior-year quarter revenue of $14.9 million. Active customers increased from the previous-year quarter total of 801 to 1,486, an 85.5% increase.

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GuruFocus ranks Agora's financial strength 8 out of 10 on the back of no long-term debt.

Walt Disney

Coatue purchased 9,152,731 shares of Walt Disney, giving the position 8.98% weight in the equity portfolio. Shares averaged $110.22 during the second quarter.

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GuruFocus ranks the Burbank, California-based entertainment giant's profitability 8 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank and an operating margin that outperforms over 71% of global competitors.

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Other gurus with large holdings in Walt Disney include Ken Fisher (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).

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PayPal

Coatue purchased 3,225,189 shares of PayPal, increasing the holding 84.21% and the equity portfolio 4.95%. Shares averaged $137.26 during the second quarter.

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GuruFocus ranks the San Jose, California-based payment processor's profitability 8 out of 10 on several positive investing signs, which include expanding operating margins and returns that are outperforming over 83% of global competitors.

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Boeing

Coatue purchased 2,750,028 shares of Boeing, giving the stake 4.44% weight in the equity portfolio. Shares averaged $153.37 during the second quarter.

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GuruFocus ranks the Seattle-based aerospace giant's financial strength 3 out of 10 on several warning signs involving long-term debt, Altman Z-scores and Piotroski F-scores.

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Zoom

Coatue purchased 1,925,382 shares of Zoom, increasing the position 323.09% and the equity portfolio 4.29%. Shares averaged $178.45 during the second quarter.

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GuruFocus ranks the San Jose, California-based video conferencing company's financial strength 7 out of 10 on several positive investing signs, which include a double-digit Altman Z-score and debt ratios that are outperforming over 73% of global competitors.

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Disclosure: No positions.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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