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5 Tech Growth Stocks These Former Tiger Cubs Agree On

Chase Coleman and Philippe Laffont both own shares of these companies

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Margaret Moran
Aug 05, 2021

Summary

  • Managers who studied with the same mentor often have similar investing strategies
  • Chase Coleman and Philippe Laffont are 'tiger cubs' that studied under Julian Robertson
  • Both of these tiger cubs own shares of the 5 tech growth stocks listed below
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Often called the “father of hedge funds,” legendary investor

Julian Robertson (Trades, Portfolio) is not only known for his leadership of Tiger Management, but also for mentoring many young investors who later opened their own practices. The fund managers mentored by Robertson are often referred to as “tiger cubs.”

Managers who studied with the same mentor often have similar investing strategies, so it comes as no surprise that some of the same stocks appear in tiger cubs’ portfolios. According to the Aggregated Portfolio, a Premium feature of GuruFocus, two of the tiger cubs,

Chase Coleman (Trades, Portfolio) of Tiger Global Management and Philippe Laffont (Trades, Portfolio) of Coatue Management, held shares of the following five tech growth stocks as of the end of the first quarter of 2021.

Square Inc

Square Inc (

SQ, Financial) is a digital payment processing company based in San Francisco, California. It offers digital payment solutions to merchants as well as a mobile payment platform, CashApp, for consumers. The company has also expanded into websites, order delivery and installment loans.

In the first quarter of 2021, Coleman added 88.49% to Tiger Global Management’s holding in Square for a total investment of 770,000 shares, giving the position a 0.40% portfolio weight. Meanwhile, Laffont cut Coatue Management’s holding in Square by 36.76%, leaving a stake of 3,880,031 shares and giving the position a 4.83% portfolio weight.

Top Guru shareholders of the stock include

Catherine Wood (Trades, Portfolio) with 2.41% of shares outstanding, followed by Frank Sands (Trades, Portfolio) with 1.74% and Laffont with 0.85%.

On Aug. 4, shares of Square traded around $264.99 for a market cap of $121.85 billion. According to the GuruFocus Value chart, the stock is “fairly valued.”

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The company has a financial strength rating of 6 out of 10 and a profitability rating of 3 out of 10. While the interest coverage ratio of 8.88 is low, the Altman Z-Score of 9.14 suggests the company is not at risk of financial distress. The three-year revenue growth rate is 50%, though the Ebitda growth has not been as consistent.

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In 2020, Square reported revenue of $9.4 billion and earnings per share (EPS) of $0.44. Analysts surveyed by Morningstar estimate that the company’s revenue will grow to $15.6 billion in full-year 2021 and $19.5 billion in 2022, while EPS is expected to be $0.45 in 2021 and $0.96 in 2022.

Coupa Software Inc

Coupa Software Inc (

COUP, Financial) is a business software company based in San Mateo, California. It provides a global technology platform for business spend management, which analyzes large quantities of corporate transactional expense data, looking for patterns and areas that can be improved.

In the first quarter of 2021, Coleman upped Tiger Global Management’s stake in Coupa by 115.64% for a total of 1,434,000 shares, giving the position a 0.84% portfolio weight. Meanwhile, Laffont added 49.06% to Coatue Management’s investment in the stock for a total of 70,067 shares, giving the holding a 0.10% portfolio weight.

Steve Mandel (Trades, Portfolio) is the most notable Guru shareholder of the stock with 5.66% of shares outstanding, followed by Andreas Halvorsen (Trades, Portfolio) with 5.23% and Coleman with 1.95%.

On Aug. 4, shares of Coupa traded around $215.18 for a market cap of $15.81 billion. According to the GuruFocus Value chart, the stock is “modestly undervalued.”

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The company has a financial strength rating of 4 out of 10 and a profitability rating of 2 out of 10. The Piotroski F-Score of 3 out of 9 implies poor business operation, though the Altman Z-Score of 4.19 indicates the company is not likely to go bankrupt soon. The three-year revenue growth rate is 30.9%, but the Ebitda has been in decline since the company is not yet profitable.

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For its fiscal year 2021, Coupa reported revenue of $541.6 million and a loss per share of $2.63. Analysts surveyed by Morningstar estimate that the company’s revenue will grow to $682.66 million in fiscal 2022 and $846.30 in fiscal 2023, while the loss per share is expected to be only $0.24 in 2021 before turning positive with earnings per share of $0.67 in 2022.

StoneCo Ltd

StoneCo Ltd (

STNE, Financial) is a Brazilian fintech company that provides an end-to-end, cloud-based technology platform for merchants and integrated partners to conduct e-commerce across in-store, online and mobile channels.

In the first quarter of 2021, Coleman trimmed Tiger Global Management’s StoneCo investment by 0.16% for a remaining holding of 764,596 shares, giving the stock a 0.11% portfolio weight. Meanwhile, Laffont added 40.11% to Coatue Management’s holding in the stock, resulting in a total holding of 278,061 shares with a 0.09% portfolio weight.

Warren Buffett (Trades, Portfolio) is the biggest Guru shareholder of the stock with 3.45% of shares outstanding, followed by Steve Mandel (Trades, Portfolio) with 2.11% and Ron Baron (Trades, Portfolio) with 0.56&.

On Aug. 4, shares of StoneCo traded around $56.75 for a market cap of $17.56 billion. According to the Peter Lynch chart, the stock is trading slightly above its intrinsic value and its average historical valuation.

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The company has a financial strength rating of 5 out of 10 and a profitability rating of 5 out of 10. The cash-debt ratio of 1.78 is below the industry median of 3.01, but the Altman Z-Score of 4.73 indicates the company is not likely to go bankrupt. The operating margin is 32.10% and the net margin is 19.15%, outperforming 93% of industry peers.

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In 2020, StoneCo reported revenue of $617.9 million and EPS of $0.57. Analysts surveyed by Morningstar estimate that the company’s revenue will grow to $1.0 billion in 2021 and $1.7 billion in 2022, while EPS is expected to be $0.99 in 2021 and $1.87 in 2022.

DocuSign Inc

Based in San Francisco, California, DocuSign Inc (

DOCU, Financial) is a leading e-signature company that allows businesses and other organizations to facilitate and manage electronic agreements through its agreement cloud as an alternative to relying on paper documents.

In the first quarter of 2021, Coleman added 190.52% to Tiger global Management’s DocuSign position for a total of 5,151,000 shares, representing a 2.40% portfolio weight. Meanwhile, Laffont reduced Coatue Management’s investment in the stock by 81.34%, leaving a remaining holding of 227,691 shares for a portfolio weight of 0.25%.

With 2.56% of shares outstanding, Coleman is the biggest Guru shareholder of the stock, followed by

Catherine Wood (Trades, Portfolio) with 1.64% and Spiros Segalas (Trades, Portfolio) with 0.27%.

On Aug. 4, shares of DocuSign traded around $297.85 for a market cap of $58.03 billion. According to the GuruFocus Value chart, the stock is “significantly overvalued.”

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The company has a financial strength rating of 4 out of 10 and a profitability rating of 2 out of 10. The cash-debt ratio of 0.83 is low, but the Piotroski F-Score of 5 out of 9 is typical of a financially stable company. Although the company’s revenue has been increasing over the years, its revenue per share has decreased dramatically due to the amount of new shares being issued.

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For its fiscal year 2021, DocuSign reported revenue of $1.4 billion and a loss per share of $1.31. Analysts surveyed by Morningstar estimate that the company’s revenue will grow to $2.0 billion in fiscal 2022 and $2.6 billion in fiscal 2023, while the loss per share is expected to shrink to $0.41 in 2022 and $0.30 in 2023.

Sunrun Inc

Based in San Francisco, California, Sunrun Inc. (

RUN, Financial) is a home solar panel and battery storage company. It provides solar panels, batteries, installation, education and other solar power equipment and services through both rental and purchase agreements to residential homeowners in 23 U.S. states.

In the first quarter of 2021, Coleman trimmed Tiger Global Management’s Sunrun investment by 12.39% for a remaining holding of 7,073,257 shares, representing a 0.98% portfolio weight. Meanwhile, Laffont reduced Coatue Management’s holding by 8.98% for a remaining holding of 17,013,861 share, representing a 5.64% portfolio weight.

Laffont is the top Guru shareholder of the stock with 8.34% of shares outstanding, followed by Coleman with 3.47% and

Andreas Halvorsen (Trades, Portfolio) with 2.16%.

On Aug. 4, shares of Sunrun traded around $52.81 for a market cap of $10.77 billion. According to the GuruFocus Value chart, the stock is “significantly overvalued.”

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The company has a financial strength rating of 2 out of 10 and a profitability rating of 3 out of 10. The Piotroski F-Score of 1 out of 9 and Altman Z-Score of 0.8 imply a risk of bankruptcy over the next two years. The operating margin and net margin have both consistently been in the negatives historically, indicating the company is not yet profitable.

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In 2020, Sunrun reported revenue of $922 million and a loss per share of $1.24. Analysts surveyed by Morningstar estimate that the company’s revenue will grow to $1.4 billion in 2021 and $1.6 billion in 2022, while the loss per share is expected to be $0.14 for 2021 before turning positive for EPS of $0.01 in 2022.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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