Julian Robertson (Trades, Portfolio)’s Tiger Management released its 13F for the third quarter of 2021 earlier this week. The quarter that ended on Sept. 30 marked some interesting updates for the company.
Robertson, the “father of the hedge fund,” founded Tiger Management in 1980, turning an initial $8 million into over $22 billion by the late 1990s. After losing 4% in 1998 and 19% in 1999 as rivals rode the dot-com bubble to its peak, he shut down the fund in 2000, and Tiger Management now only manages money from internal sources (mainly Robertson’s personal wealth). His long-short strategy is to invest in the best companies and short the worst companies, and he is known for “betting the farm” on his best ideas. Robertson is also famous for having mentored a number of hedge fund managers, called “Tiger Cubs,” a group that includes Andreas Halvorsen (Trades, Portfolio), Chase Coleman (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), John Griffin (Trades, Portfolio), Lee Ainslie (Trades, Portfolio) and Steve Mandel (Trades, Portfolio).
According to Tiger Management’s latest 13F report, Robertson’s biggest portfolio change during the quarter was the sale of his AerCap Holdings NV (AER, Financial) investment. At the beginning of 2021, AerCap was the top holding in Robertson’s equity portfolio, though he has been selling the position since then. He also reduced his investment in Workday Inc. (WDAY, Financial), added to Apollo Global Management Inc. (APO, Financial) and took a new stake in Tesla Inc. (TSLA, Financial).
AerCap Holdings
Robertson sold out of the remaining 799,534 shares of AerCap Holdings (AER, Financial). With shares trading for an average price of $53.57, the sale had a -7.16% impact on the equity portfolio.
AerCap Holdings is the largest aircraft leasing and finance company in the world. The Dublin, Ireland-based company leases more than 1,000 aircraft to approximately 200 airlines in 80 countries around the globe.
On Nov. 19, shares of AerCap traded around $62.01 for a market cap of $15.18 billion. According to the GuruFocus Value chart, the stock is modestly overvalued.
The company has a financial strength rating of 3 out of 10, with the interest coverage ratio of 1.72 and Altman Z-Score of 0.88 indicating a danger of bankruptcy. The profitability rating is 7 out of 10, with the operating margin and net margin already back above the 40% mark following the pandemic-related air travel decline.
Workday
Robertson also cut his investment in Workday (WDAY, Financial) by 15,700 shares for a remaining stake of 7,200 shares. The trade had a -0.66% impact on the equity portfolio, and shares traded around $247.92 apiece during the quarter.
Headquartered in Pleasanton, California, Workday is an enterprise cloud solutions company that provides software for the management of financial assets was well as human capital. Its multidimensional financial and operational reporting and analytics are designed for large companies.
Shares of Workday traded around $286.60 apiece on Nov. 19 for a market cap of $71.08 billion. The GF Value chart gives the stock a moderately overvalued rating.
The company has a financial strength rating of 5 out of 10. The Piotroski F-Score of 5 out of 9 and altman Z-Score of 8.61 show the company is financially stable. The profitability rating is 3 out of 10; though the company is not yet profitable, its margins are trending up, which is encouraging.
Apollo Global Management
Robertson increased the Apollo Global Management (APO, Financial) stake by 98,545 shares for a total of 255,147 shares. The trade had a 1.12% impact on the equity portfolio. During the three months through September, shares traded for an average of $60.19 each.
Apollo is a global alternative investment manager that invests in credit, private equity and real assets. The company raises, invests and manages credit, private equity and real assets funds as well as strategic investment accounts for institutional and individual investors.
On Nov. 19, shares of Apollo traded around $74.95 for a market cap of $18.48 billion. According to the GF Value chart, the stock is modestly undervalued.
The company has a financial strength rating of 4 out of 10; although the Altman Z-Score of 1.59 suggests bankruptcy risk, the interest coverage ratio of 6.35 shows the company can pay its interest expenses for the time being. The profitability rating is 7 out of 10, with the return on equity of 38.44% more than doubling the industry average of 16.21%.
Tesla Inc.
Robertson’s top new stock buy for the quarter was Tesla Inc. (TSLA, Financial). Tiger Management picked up 6,900 shares, with the stock trading at an average price of $706.10 per share during the quarter. Tesla now represents a 0.99% weight in the equity portfolio.
Tesla is most famous for being a pioneer in commercializing electric vehicles. Considered by many investors to be a tech stock from its outset, the Palo Alto, California-based company is also involved in solar energy through its SolarCity acquisition.
Shares of Tesla traded around $1,137.06 on Nov. 19 for a market cap of $1.14 trillion. The GF Value chart rates the stock as significantly overvalued.
The company has a financial strength rating of 6 out of 10 with a solid cash-debt ratio of 1.59 and a strong Piotroski F-Score of 7 out of 9. The profitability rating is 4 out of 10 on the back of a three-year revenue per share growth rate of 27.1%. The Ebitda per share growth has been solid as well, remaining in the green since mid-2018.
Portfolio overview
As per the 13F report, Tiger Management held shares of 41 stocks in an equity portfolio valued at $540 million. The turnover for the quarter was 7%.
Robertson’s top three holdings were Blackstone Inc. (BX, Financial) with 12.74% of the equity portfolio, Flywire Corp. (FLYW, Financial) with 11.4% and Microsoft Corp. (MSFT, Financial) with 10.46%.
In terms of sector allocation, Robertson’s firm was most invested in technology, financial services and communication services.
