5 Stocks These Former Tiger Cubs Agree On

An overview of Chase Coleman and Philippe Laffont's common holdings

Author's Avatar
Dec 16, 2020
Article's Main Image

Legendary investor

Julian Robertson (Trades, Portfolio) is not just known for his leadership of Tiger Management, but also for taking a group of protégés under his wing. These student investors, many of whom later opened their own practices, are commonly referred to as "tiger cubs."

As they were mentored by the same investor, it is no surprise that some of these guru fund managers have similar styles and even invest in some of the same stocks. An example of this is

Chase Coleman (Trades, Portfolio), who now heads up Tiger Global Management, and Philippe Laffont (Trades, Portfolio), leader of Coatue Management.

As of the end of the third quarter, the Aggregated Portfolio, a Premium GuruFocus feature, found both gurus have positions in JD.com Inc. (

JD, Financial), Sunrun Inc. (RUN, Financial), Facebook Inc. (FB, Financial), Amazon.com Inc. (AMZN, Financial) and Zoom Video Communications Inc. (ZM, Financial), among other stocks.

JD.com

Coleman left his JD.com stake unchanged in the third quarter, while Laffont reduced his holding by 1.78%. The stock has a combined weight of 13.14% in their equity portfolios.

The Chinese e-commerce company has a $125.2 billion market cap; its shares were trading around $80.78 on Wednesday with a price-earnings ratio of 30.85, a price-book ratio of 5.83 and a price-sales ratio of 1.25.

The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced.

9a62ce79d32ffeddffbb9182fc313f3b.png

GuruFocus rated JD's financial strength 8 out of 10. In addition to adequate interest coverage, the Altman Z-Score of 4.52 indicates the company is in good standing even though assets are building up at a faster rate than revenue is growing.

The company's profitability did not fare as well, scoring a 4 out of 10 rating despite its margins and returns outperforming over half of its competitors. JD also has a high Piotroski F-Score of 7, which implies business conditions are healthy.

According to GuruFocus, Coleman has gained an estimated 73.08% on his investment since the fourth quarter of 2014. Laffont has gained roughly 30.07%.

Coleman is the company's largest guru shareholder with 3.32% of outstanding shares.

Ken Fisher (Trades, Portfolio), Dodge & Cox, Daniel Loeb (Trades, Portfolio), Chris Davis (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Ray Dalio (Trades, Portfolio), Jim Simons (Trades, Portfolio)' Renaissance Technologies, Stanley Druckenmiller (Trades, Portfolio), Value Partners (Trades, Portfolio) and Loius Moore Bacon also have large positions in the stock.

Sunrun

In the third quarter, Coleman reduced his Sunrun position by 39.02%, while Laffont entered an 8.2 million-share stake. They have a combined equity portfolio weight of 9.8% in the stock.

The solar panel manufacturer, which is headquartered in San Francisco, has a market cap of $11.98 billion; its shares were trading around $60.63 on Wedneday with a price-earnings ratio of 1,515.75, a price-book ratio of 7.89 and a price-sales ratio of 8.92.

According to the Peter Lynch chart, the stock is overvalued.

a26bb6fb5d30a14dae0fd17045051dc4.png

Sunrun's financial strength and profitability were both rated 3 out of 10 by GuruFocus. As a result of issuing approximately $1.6 billion in new long-term debt over the past three years, the company has poor interest coverage. The Altman Z-Score of 1.6 also warns it could be at risk of going bankrupt if it does not improve its liquidity position. Its assets are also building up faster than revenue is growing, indicating it may be becoming less efficient.

Although the company's operating margin is negative, it is expanding. Sunrun is also being weighed down by returns that underperform over half of its industry peers as well as a low Piotroski F-Score of 2, which implies business conditions are in poor shape. It has also recorded losses in operating income and declines in revenue per share over the past several years.

GuruFocus estimates Coleman has gained 415.04% on his investment since the first quarter of 2018, while Laffont has gained roughly 4.16%.

Of the gurus invested in Sunrun, Laffont has the largest stake with 9% of its outstanding shares. Coleman is second with 6.02%. Other gurus who own the stock are Pioneer Investments (Trades, Portfolio) and

Paul Tudor Jones (Trades, Portfolio) also own the stock.

Facebook

Coleman made no changes to his Facebook stake in the third quarter, while Laffont boosted his holding by 15.57%. They have a combined portfolio weight of 9.66% in the stock.

The Menlo Park, California-based social media company has a $787.98 billion market cap; its shares were trading around $276.65 on Wednesday with a price-earnings ratio of 31.5, a price-book ratio of 6.7 and a price-sales ratio of 10.08.

Based on the Peter Lynch chart, the stock appears to be overvalued.

ff1dc105a5082b1516219c0d0fcaafb5.png

Facebook's financial strength and profitability were both rated 8 out of 10 by GuruFocus. In addition to a comfortable level of interest coverage, the company is being supported by a robust Altman Z-Score of 18.7. The return on invested capital also surpasses the weighted average cost of capital, indicating good value creation.

The company is also being supported by an expanding operating margin, strong returns that outperform a majority of competitors and a moderate Piotroski F-Score of 6. Facebook has recorded a slowdown in revenue per share growth over the past 12 months.

GuruFocus data shows Coleman has gained an estimated 40.91% on his investment since the fourth quarter of 2016. Laffont has gained roughly 58.55% since the fourth quarter of 2013.

Coleman is the company's largest guru shareholder with 0.31% of outstanding shares.

Steve Mandel (Trades, Portfolio), Spiros Segals, Frank Sands (Trades, Portfolio), Pioneer, Fisher, Dodge & Cox, First Eagle Investment (Trades, Portfolio), Ruane Cuniff and David Tepper (Trades, Portfolio) are a few other gurus who are also invested in the stock.

Amazon

Coleman increased his Amazon position by 1.98% the third quarter, while Laffont curbed his holding by 0.11%. The gurus have a combined portfolio weight of 8.82% in the stock.

The e-commerce giant headquartered in Seattle has a market cap of $1.61 trillion; its shares were trading around $3,207.67 on Wednesday with a price-earnings ratio of 93.92, a price-book ratio of 19.45 and a price-sales ratio of 4.7.

The Peter Lynch chart suggests the stock is overvalued. The GuruFocus valuation rank of one out of 10 also supports this assessment since the share price is approaching a 10-year high.

bdfa404b36598bd6cf4a8061652434bd.png

Amazon's financial strength and profitability were both rated 7 out of 10 by GuruFocus. In addition to sufficient interest coverage, the company has a robust Altman Z-Score of 6.54 even though assets are building up at a faster rate than revenue is growing. The ROIC also eclipses the WACC, indicating good value creation.

The company is also being supported by expanding margins, strong returns that outperform over half of industry peers and a moderate Piotroski F-Score of 5. As a result of steady earnings and revenue growth, Amazon also has a predictability rank of 4.5 out of five stars. According to GuruFocus, companies with this rank return an average of 10.6% annually over a 10-year period.

Coleman has gained roughly 92.86% on his investment since the second quarter of 2015. GuruFocus data shows Laffont has gained around 82.99% since the fourth quarter of 2013.

With a 0.34% stake, Fisher has the largest position in Amazon. Other top guru shareholders include Pioneer, Segalas, Sands,

Warren Buffett (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Davis, Mandel, Andreas Halvorsen (Trades, Portfolio), Loeb, Cohen, Tepper, Tom Gayner (Trades, Portfolio), Druckenmiller, Ron Baron (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Bill Gates (Trades, Portfolio)' foundation trust and David Carlson (Trades, Portfolio).

Zoom Video Communications

During the third quarter, Coleman increased his Zoom Video stake by 11.48% while Laffont trimmed his position by 1.85%. They have a combined equity portfolio weight of 8.52% in the stock.

Headquartered in San Jose, California, the company, which provides videotelephony and online chat services through a cloud-based platform, has a $115.01 billion market cap; its shares were trading around $402.14 on Wednesday with a price-earnings ratio of 281.47, a price-book ratio of 80.3 and a price-sales ratio of 61.15.

Based on the Peter Lynch chart, the stock appears to be overvalued.

85e3069990bacd3a6c6cca37c18ec29d.png

GuruFocus rated Zoom Video's financial strength 7 out of 10 on the back of a comfortable level of interest coverage and a robust Altman Z-Score of 45.98. The Sloan ratio, however, implies it has poor earnings quality.

The company's profitability did not fare as well, scoring a 2 out of 10 rating even though its margins and returns outperform a majority of competitors.

Since establishing the position in second-quarter 2019, GuruFocus estimates Coleman has gained 216.61% on the investment. Laffont has gained approximately 119.06% over the same period.

Of the gurus invested in Zoom, Simons' firm has the largest stake with 1.85% of outstanding shares. Sands, Pioneer, Baron, Jones,

John Hussman (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Caxton Associates (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio) and Fisher also have positions in the stock.

Portfolio composition

Coleman's $35.53 billion equity portfolio, which was composed of 90 stocks as of the end of the third quarter, is largely invested in the technology and consumer cyclical sectors. The guru's New York-based hedge fund focuses on small-cap stocks and technology companies, especially startups.

3e4dd0ce82933fd9e48aebf920bc3e23.png

Laffont's $19.05 billion equity portfolio, which was composed of 73 stocks as of Sept. 30, is heavily invested in the technology and communication services sectors. The investor's New York-based firm takes a fundamental analysis approach to investing with both long-short strategies and top-down stock picking.

d1253325b893775ec60c959dc31b530c.png

Disclosure: No positions.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

Also check out:
Rating:
0 / 5 (0 votes)
Author's Avatar
WRITTEN BY

GuruFocus Screeners

Related Articles