In a record quarter for venture capital deals, one firm’s name continually appeared as a participant: Tiger Global.
According to a report from CB Insights, the New York-based hedge fund, which was founded in 2001 by Chase Coleman (Trades, Portfolio), upped its investments in the second quarter eightfold from the same quarter last year to 81. That comes out to an average of 1.3 transactions a day for the three months ended June 30.
The venture capital space in general also recorded a boom, with investments surging 157% globally from the prior-year period to $156 billion.
One of Julian Robertson (Trades, Portfolio)’s former tiger cubs, Coleman is known for focusing on small-cap stocks and technology startups, having become an early investor in Facebook Inc. (FB, Financial) and Spotify Technology SA (SPOT, Financial). Additionally, Bloomberg reported Coleman was the top-earning hedge fund manager last year, raking in $3 billion in private fees and gains on investments.
Among the many deals the firm participated in, spanning a broad number of industries, notable ones included cybersecurity company Forter and artificial intelligence startup Scale AI. Tiger Global also opened its checkbook overseas, investing in Chinese, Indian, British and Mexican companies, among others.
The firm has also benefited from the booming initial public offering market, which has seen 503 companies debut so far this year. In comparison, 672 companies went public in all of 2020. At the time of their debuts last week, CNBC’s Ari Levy noted Tiger Global had stakes worth approximately $1 billion each in Chinese ride-hailing service DiDi Global Inc. (DIDI, Financial) and cybersecurity company SentinelOne Inc. (S, Financial).
As of the end of the first quarter, the technology sector had the largest representation in Coleman’s $43.47 billion equity portfolio with a weight of 37.66%.
According to GuruFocus portfolio data, the guru’s largest tech holdings as of the end of the three months ended March 31 were Microsoft Corp. (MSFT, Financial), CrowdStrike Holdings Inc. (CRWD, Financial), Uber Technologies Inc. (UBER, Financial), ServiceNow Inc. (NOW, Financial) and DocuSign Inc. (DOCU, Financial).
In the first quarter, the investor increased his stake in Microsoft (MSFT, Financial) by 15.4% to 13.7 million shares. As his second-largest holding, the position accounts for 7.44% of the equity portfolio. GuruFocus estimates Coleman has gained 130.77% on the investment over its lifetime.
The Redmond, Washington-based software company, which is known for its Windows and Office 365 products, has a $2.11 trillion market cap; its shares were trading around $276.71 on Thursday with a price-earnings ratio of 38.14, a price-book ratio of 15.68 and a price-sales ratio of 13.34.
The GF Value Line suggests the stock is significantly overvalued currently based on historical ratios, past performance and future earnings projections.
GuruFocus rated Microsoft’s financial strength 6 out of 10, driven by a comfortable level of interest coverage as well as a high Altman Z-Score of 9.09, indicating the company is in good standing even though assets are building up at a faster rate than revenue is growing. The return on invested capital also significantly surpasses the weighted average cost of capital, suggesting good value creation is occurring as the company grows.
The company’s profitability fared even better, scoring a 9 out of 10 rating on the back of an expanding operating margin, strong returns on equity, assets and capital that outperform a majority of competitors and a high Piotroski F-Score of 8,indicating business conditions are healthy. As a result of consistent earnings and revenue growth, Microsoft also has a predictability rank of 2.5 out of five stars. According to GuruFocus, companies with this rank return an average of 7.3% annually over a 10-year period.
Of the many gurus invested in Microsoft, Ken Fisher (Trades, Portfolio) has the largest stake with 0.32% of outstanding shares. Pioneer Investments (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Andreas Halvorsen (Trades, Portfolio), Steve Mandel (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio) also have notable holdings in the stock.
Coleman left his CrowdStrike (CRWD, Financial) position unchanged at 7.5 million shares, which represent 3.16% of the equity portfolio and is the 10th-largest holding. According to GuruFocus, he has gained an estimated 184.79% on the investment since the second quarter of 2019.
The cybersecurity company headquartered in Sunnyvale, California has a market cap of $60.41 billion; its shares were trading around $263.90 on Thursday with a forward price-earnings ratio of 714.29, a price-book ratio of 71.12and a price-sales ratio of 59.13.
According to the median price-sales chart, the stock is overvalued.
GuruFocus rated CrowdStrike’s financial strength 4 out of 10. Despite having a robust Altman Z-Score of 17.16, the Sloan ratio indicates the company has poor earnings quality.
The company’s profitability scored a 1 out of 10 rating due to negative margins and returns that underperform a majority of industry peers. CrowdStrike is supported by a moderate Piotroski F-Score of 4, however, indicating its operations are stable.
With a 3.37% stake, Coleman is CrowdStrike’s largest guru shareholder. Segalas, Philippe Laffont (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies also have significant positions.
The guru trimmed his holding of Uber Technologies (UBER, Financial) by 24.78% during the quarter to 20.8 million shares. The investment occupies 2.61% of the equity portfolio. GuruFocus data shows Coleman has gained an estimated 21.18% on the stock so far.
The San Francisco-based ridesharing company, which also offers food and package delivery services, has a $91.42 billion market cap; its shares were trading around $47.72 on Thursday with a price-book ratio of 6.69 and a price-sales ratio of 8.28.
Based on the median price-sales value chart, the stock appears to be overvalued currently.
Uber’s financial strength was rated 4 out of 10 by GuruFocus. As a result of issuing approximately $4.7 billion in new long-term debt over the past three years, the company has poor interest coverage. The low Altman Z-Score of 1.86 also warns it could be at risk of going bankrupt if it does not improve its liquidity.
The company’s profitability did not fare as well, scoring a 1 out of 10 rating on the back of negative margins and returns that underperform a majority of competitors. Uber has a low Piotroski F-Score of 2, indicating is operating conditions are in poor shape. The company has also recorded losses in operating income as well as declines in revenue per share over the past several years.
Frank Sands (Trades, Portfolio) is Uber’s largest guru shareholder with a 1.79% stake. Other top guru investors include Segalas, Laffont, Steven Cohen (Trades, Portfolio), Daniel Loeb (Trades, Portfolio) and Lee Ainslie (Trades, Portfolio).
Coleman boosted his ServiceNow (NOW, Financial) stake by 31.22% during the quarter to 2.16 million shares. Accounting for 2.48% of the equity portfolio, GuruFocus says he has gained an estimated 39.09% on the investment so far.
Headquartered in Santa Clara, California, the cloud computing software company has a market cap of $110.92 billion; its shares were trading around $556.76 on Thursday with a price-earnings ratio of 749.04, a price-book ratio of 36.51 and a price-sales ratio of 23.45.
The GF Value Line suggests the stock is modestly overvalued currently.
GuruFocus rated ServiceNow’s financial strength 6 out of 10. In addition to adequate interest coverage, the company has a high Altman Z-Score of 12.23, indicating it is in good standing even though assets are building up at a faster rate than revenue is growing. The WACC also eclipses the ROIC, suggesting the company struggles to create value.
The company’s profitability scored a 4 out of 10 rating as its margins and returns outperform over half of its industry peers. ServiceNow also has a moderate Piotroski F-Score of 5 and a one-star predictability rank. GuruFocus data shows companies with this rank return, on average, 1.1% annually.
Of the gurus invested in ServiceNow, Sands has the largest stake with 1.45% of outstanding shares. Other top guru shareholders include Mandel, Halvorsen, Pioneer, Fisher and Segalas.
In the first quarter, the investor increased his stake in DocuSign by 190.52% to 5.15 million shares. The position accounts for 2.4% of the equity portfolio. GuruFocus estimates Coleman has gained 31.29% on the investment over its lifetime.
The San Francisco-based cloud software company, which facilitates e-signature transactions, has market cap of $56.3 billion; its shares were trading around $290.30 on Thursday with a price-book ratio of 321.31 and a price-sales ratio of 33.59.
According to the GF Value Line, the stock is significantly overvalued currently.
DocuSign’s financial strength was rated 4 out of 10 by GuruFocus. Despite the robust Altman Z-Score of 15.5 indicating the company is in good standing, its assets are building up at a faster rate than revenue is growing. The Sloan Ratio also implies it has poor earnings quality.
The company’s profitability did not fare as well, scoring a 2 out of 10 rating. Although the operating margin is expanding, DocuSign is being weighed down by negative returns that underperform a majority of competitors. It also has a moderate Piotroski F-Score of 5, but revenue per share has declined over the past five years.
With a 2.65% stake, Coleman is the company’s largest guru shareholder. Catherine Wood (Trades, Portfolio), Segalas, Simons’ firm, Pioneer and Laffont, among several other gurus, also have positions in DocuSign.
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