Philippe Laffont (Trades, Portfolio), founder of Coatue Management, disclosed this week that his firm's top five buys in the third quarter were Snowflake Inc. (SNOW, Financial), Tesla Inc. (TSLA, Financial), Sunrun Inc. (RUN, Financial), Vivint Solar Inc. (VSLR, Financial) and Global Payments Inc. (GPN, Financial).
A protégé of Julian Robertson (Trades, Portfolio)'s Tiger Management, Laffont founded his New York-based firm in 1999. Coatue seeks long-term capital through long and short investments with a top-down, fundamental analysis approach to stock picking.
As of third-quarter-end, the firm's $19.05 billion equity portfolio contains 73 stocks, with 24 new holdings and a turnover ratio of 32%. The top three sectors in terms of weight are technology, communication services and consumer cyclical, with weights of 40.16%, 24.76% and 20.71%.
Snowflake
Coatue purchased 4,044,220 shares of Snowflake, giving the stake 5.33% weight in the equity portfolio. Shares averaged $238.10 during the period between the company's initial public offering date of Sept. 16 and Sept. 30.
The San Mateo, California-based company provides a data cloud platform that helps users with data engineering, data warehousing and data sharing. According to GuruFocus, the company's cash-to-debt ratio of 2.93 outperforms 54.07% of global software competitors.
Other gurus purchasing Snowflake shares ahead of the Thanksgiving and Christmas holidays include Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway Inc. (BRK.A)(BRK.B) and Chase Coleman (Trades, Portfolio)'s Tiger Global Management.
Tesla
Coatue purchased 1,557,790 shares of Tesla, increasing the position 100.54% and the equity portfolio 3.51%. While shares averaged $353.47 during the third quarter, shares of Tesla closed on Tuesday at $441.61, up 8.21% from the previous close of $408.09 on news that the S&P Dow Jones Indices welcomed the Palo Alto, California-based electric vehicle giant into the Standard & Poor's 500 Index effective Dec. 21. Based on Monday's closing price, Tesla is expected to be among the 10 most valuable companies in the S&P 500.
GuruFocus ranks Tesla's financial strength 5 out of 10: Although the company has a high Piotroski F-score of 8, interest coverage and debt-to-equity ratios are underperforming over 68% of global competitors.
Other gurus with large holdings in Tesla include Ron Baron (Trades, Portfolio)'s Baron Funds, PRIMECAP Management (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio)' Harbor Capital Appreciation Fund.
While the stock remains the most-voted stock in the "Not Interested" virtual basket with 30 votes, Tesla is also among the top 10 most-voted stocks in the "Buying" virtual basket with 19 votes.
Sunrun
According to GuruFocus Real-Time Picks, a Premium feature, Coatue reported on Oct. 8 a holding of 17,656,319 shares of Sunrun. Shares traded around $70.54 on the transaction date.
GuruFocus ranks the San Francisco-based solar company's financial strength 3 out of 10 on several warning signs, which include a low Piotroski F-score of 2 and a debt-to-equity ratio that underperforms over 90% of global competitors.
Vivint Solar
Coatue purchased 11,627,907 shares of Vivint Solar, giving the stake 2.58% weight in the equity portfolio. Shares averaged $25.56 during the third quarter.
GuruFocus ranks the Utah-based solar company's financial strength 2 out of 10 on the back of a weak Altman Z-score of 0.4 and a debt-to-equity ratio that underperforms over 90% of global competitors, warning signs of high financial leverage compared to companies from other market sectors.
Global Payments
Coatue purchased 2,632,477 shares of Global Payments, increasing the position 225.3% and the equity portfolio 2.45%. Shares averaged $173 during the third quarter.
GuruFocus ranks the Atlanta-based payment processor's profitability 8 out of 10 on the heels of profit margins outperforming over 70% of global competitors.
Disclosure: No positions.
Read more here:
- Bruce Berkowitz's Top 4 Buys in the 3rd Quarter
- David Tepper Plunges Into PG&E in the 3rd Quarter
- Top 4 3rd-Quarter Trades of the Bill & Melinda Gates Foundation Trust
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