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Mario Cibelli Dumps Amazon, Curbs Meta Platforms in 3rd Quarter

Guru leans into several top holdings

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Nov 15, 2021
Summary
  • Guru boosts positions in World Wrestling Entertainment, Just Eat Takeaway.com and Uber Technologies.
  • Short-lived Amazon holding bites the dust.
  • Meta Platforms position cut back during the quarter.
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Mario Cibelli (Trades, Portfolio), leader of Marathon Capital Management, has revealed his portfolio for the third quarter of 2021. Major trades include additions to his holdings in World Wrestling Entertainment Inc. (WWE, Financial), Just Eat Takeaway.com NV (GRUB, Financial) and Uber Technologies Inc. (UBER, Financial), selling out his position in Amazon.com Inc. (AMZN, Financial) and a reduction in his Meta Platforms Inc. (FB, Financial) position.

Cibelli launched Marathon Partners in 1997 after working with

Mario Gabelli (Trades, Portfolio) at Gamco Investors. He is a long-term investor who seeks stocks that will double in value over a three- to five-year holding period regardless of current market conditions. Cibelli is known for focusing on less efficient portions of the market.

Portfolio overview

At the end of the quarter, Cibelli’s portfolio contained 11 stocks with no new holdings. It was valued at $263 million and has seen a 16% turnover rate. Top holdings in the portfolio include Uber, Meta, Stitch Fix Inc. (

SFIX, Financial), World Wrestling Entertainment and Just Eat Takeaway.com.

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The top sectors represented are financial services (28.2%), consumer cyclical (21.41%) and technology (19.35%).

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World Wrestling Entertainment

The guru’s long-standing World Wrestling Entertainment (

WWE, Financial) holding got a boost after two quarters in a row of large reductions. The guru purchased 215,000 shares to boost the holding by 68.8%. The shares traded at an average price of $52.17 during the quarter. Overall, the addition had a 4.59% impact on the equity portfolio and GuruFocus estimates the total gain of the holding at 25.5%.

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World Wrestling Entertainment develops and produces television programming, pay-per-view programming and live wrestling events. Its segments include Media, Live Events and Consumer Products. The majority of its revenue comes from the Media segment, which includes production and monetization of long-form and short-form video content across various platforms, including WWE Network, broadcast and pay television, digital and social media as well as filmed entertainment. The four geographical segments are North America, which accounts for the majority of revenue, Europe, the Middle East and Africa, Asia Pacific and Latin America.

On Nov. 15, the stock was trading at $56.81 per share with a market cap of $4.31 billion. According to the GF Value Line, the stock is trading at a fair value rating.

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GuruFocus gives the company a financial strength rating of 5 out of 10, a profitability rank of 7 out of 10 and a valuation rank of 3 out of 10. There is currently one severe warning sign issued for assets growing faster than revenue. The company’s cash-to-debt ratio of 0.73 ranks worse than 58.42% of industry competitors and is far below the company’s median cash-to-debt ratio of 27.05 seen over the last decade.

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Other top guru shareholders in World Wrestling Entertainment (

WWE, Financial) include Jim Simons (Trades, Portfolio)' Renaissance Technologies, Chuck Royce (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio).

Just Eat Takeaway.com

Cibelli doubled down on his new holding in Just Eat Takeaway.com (

GRUB, Financial), parent company of Grubhub, with the purchase of 765,000 additional shares. The purchase grew the holding by 91.89% and the shares traded at an average price of $17.52 during the quarter. GuruFocus estimates the guru has lost 26.92% on the holding since the second quarter of 2021 and the addition had a 4.22% impact on the equity portfolio overall.

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Just Eat Takeaway operates an online marketplace that connects restaurants with users in Europe and North America. The company operates mainly as an order-only marketplace, although it also offers last-mile delivery services. The company is the result of the merger of Just Eat Plc and Takeaway.com NV in early 2020. The company had close to 60 million active users on its platform generating revenue of about 2 billion euros and a gross merchandise value of 13 billion euros. Excluding the U.S. after its recent acquisition of Grubhub, the company's largest geographical presence by revenue is in the U.K., followed by Germany, Canada and the Netherlands.

As of Nov. 15, the stock was trading at $13.47 per share with a market cap of $14.37 billion. The stock is a possible value trap according to the GF Value Line, so investors should do their own research before purchasing shares.

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GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rank of 3 out of 10. There are currently five severe warning signs, including new long-term debt and a declining gross margin. The company’s struggling profitability rank has been pulled down by negative operating and net margins despite significantly increased revenue in 2020.

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Just Eat Takeaway.com (

GRUB, Financial) shares are also owned by Paul Tudor Jones (Trades, Portfolio), Chase Coleman (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).

Uber

Rounding out the positive impacts on the portfolio was an addition to Cibelli’s Uber (

UBER, Financial) position. First established at the end of 2019, the position jumped 25.34% with the purchase of 230,000 shares. Throughout the quarter, the shares traded at an average price of $43.76. The purchase had a 3.91% impact on the equity portfolio and GuruFocus estimates the total gain of the holding at 22.42%.

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Uber Technologies is a technology provider that matches riders with drivers, hungry people with restaurants and food delivery service providers, and shippers with carriers. The firm's on-demand technology platform could eventually be used for additional products and services, such as autonomous vehicles, delivery via dronea and Uber Elevate, which, as the compny refers to it, provides "aerial ride-sharing." Uber Technologies is headquartered in San Francisco and operates in over 63 countries with over 110 million users that order rides or food at least once a month. Approximately 76% of its gross revenue comes from ride-sharing and 22% from food delivery.

The stock was trading at $43.96 per share with a market cap of $85.34 billion on Nov. 15. A fair value company is given to the company by the GF Value Line.

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GuruFocus gives the company a financial strength rating of 4 out of 10 and a profitability rank of 1 out of 10. There are currently five severe warning signs issued, including operating income showing loss and an Altman Z-Score placing the company in the distress column. The company has struggled with capital efficiency, with the weighted average cost of capital exceeding the return on invested capital.

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Frank Sands (Trades, Portfolio), Chase Coleman (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Philippe Laffont (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) also maintain positions in Uber (UBER, Financial).

Amazon

The guru cut ties with Amazon (

AMZN, Financial) after only one quarter of ownership. The 2,750 shares that were purchased in the second quarter were sold throughout the third quarter at an average price of $3,451.22. Overall, the sale had a 3.52% impact on the equity portfolio and GuruFocus estimates the total gain of the holding at 4.06%.

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Amazon is a leading online retailer and one of the highest-grossing ecommerce aggregators, with $386 billion in net sales and approximately $482 billion in estimated physical/digital online gross merchandise volume, or GMV, in 2020. Retail-related revenue represented approximately 83% of the total, followed by Amazon Web Services' cloud computing, storage, database and other offerings (12%), and advertising services and co-branded credit cards (6%). International segments constituted 27% of Amazon's non-AWS sales in 2020, led by Germany, the United Kingdom and Japan.

On Nov. 15, the stock was trading at $3,560 per share with a market cap of $1.8 trillion. According to the GF Value Line, the stock is trading at a fair value rating.

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GuruFocus gives the company a financial strength rating of 6 out of 10, a profitability rank of 8 out of 10 and a valuation rank of 3 out of 10. There is currently one severe warning sign issued for assets growing faster than revenue. Despite the warning sign, Amazon’s revenue has increased exponentially over the last decade with net income on the rise since 2015.

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Other top guru shareholders in Amazon (

AMZN, Financial) include Baillie Gifford (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Pioneer Investments, Spiros Segalas (Trades, Portfolio) and Frank Sands (Trades, Portfolio).

Meta

Cibelli’s Meta Platforms (

FB, Financial) holding was slashed during the quarter by 17.97% with the sale of 23,000 shares. The reduction marks the biggest sale of shares for the guru since 2014 and the shares traded at an average price of $360.33 throughout the quarter. GuruFocus estimates the total gain of the holding at 107.27% and the reduction had a -2.97% impact on the equity portfolio overall.

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Meta Platforms, formerly Facebook, is the world's largest online social network, with 2.5 billion monthly active users. Users engage with each other by exchanging messages and sharing news events, photos and videos. On the video side, the company is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Facebook refers to this as Facebook Watch. Its ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the company's total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Facebook operates at a 30%-plus margin.

As of Nov. 15, the stock was trading at $348.85 per share with a market cap of $970.42 billion. The stock is trading at a fair value rating according to the GF Value Line.

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GuruFocus gives the company a financial strength rating of 7 out of 10 and a profitability rank of 9 out of 10. There are currently two severe warning signs issued for a declining gross margin and a declining operating margin. The company’s cash flows show strong growth throughout the last decade with free cash flow hitting an all-time high in 2020.

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Meta (

FB, Financial) shares are also owned by Baillie Gifford (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Frank Sands (Trades, Portfolio), Pioneer Investments and Chase Coleman (Trades, Portfolio).

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I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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