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Mandel's Lone Pine Opens 2 Positions, Exits 2 Holdings

Former tiger cub's firm releases quarterly portfolio

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Nov 22, 2021
Summary
  • Lone Pine takes positions in Bilibili and Victoria’s Secret.
  • Firm exits stakes in Global Payments and Mastercard.
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Lone Pine Capital, the firm founded by former tiger cub

Steve Mandel (Trades, Portfolio), disclosed last week that its top trades during the third quarter included new positions in Bilibili Inc. (BILI, Financial) and Victoria’s Secret & Co. (VSCO, Financial) and the closure of its holdings in Global Payments Inc. (GPN, Financial) and Mastercard Inc. (MA, Financial).

Prior to finding the Greenwich, Connecticut-based firm, Mandel worked as senior managing director and consumer analyst at

Julian Robertson (Trades, Portfolio)’s Tiger Management. Lone Pine applies both value and growth strategies to build the equity portfolio: The fund takes both long and short positions using fundamental analysis and bottom-up stock picking.

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As of Sept. 30, the firm’s $29.68 billion equity portfolio contains 39 stocks, with seven new positions and a turnover ratio of 12%. The top four sectors in terms of weight are technology, communication services, consumer cyclical and health care, representing 36.46%, 25.04%, 20.19% and 12.29% of the equity portfolio.

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Bilibili

Lone Pine purchased 8,612,782 shares of Bilibili (

BILI, Financial), giving the position 1.92% weight in the equity portfolio. Shares averaged $86.10 during the third quarter; the stock is modestly overvalued based on Monday’s price-to-GF Value ratio of 1.12.

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GuruFocus ranks the Shanghai-based online entertainment company’s financial strength 6 out of 10 on the back of a strong Altman Z-score of 6.27 despite cash-to-debt and debt-to-equity ratios underperforming more than 63% of global competitors.

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Other gurus with holdings in Bilibili include

Ken Fisher (Trades, Portfolio)’s Fisher Investments, Baillie Gifford (Trades, Portfolio) and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.

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Victoria’s Secret

The firm purchased 8,609,543 shares of Victoria’s Secret (

VSCO, Financial), giving the stake 1.60% weight in the equity portfolio. Shares averaged $60.82 during the third quarter.

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On Aug. 2, L Brands completed its spinoff of its Victoria’s Secret business, which includes operations in lingerie, PINK and beauty. According to GuruFocus, the Ohio-based company’s cash-to-debt ratio underperforms more than 83% of global competitors despite the company having interest coverage ratios that outperform over 84% of global retail companies.

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Global Payments

The firm sold all 5,542,294 shares of Global Payments (

GPN, Financial), trimming 3.35% of its equity portfolio.

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Shares of Global Payments averaged $173.79 during the third quarter; the stock is significantly undervalued based on Monday’s price-to-GF Value ratio of 0.63.

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GuruFocus ranks the Atlanta-based payment processing company’s profitability 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a three-star business predictability rank and profit margins that outperform more than 81% of global competitors.

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Mastercard

The firm sold all 1,803,798 shares of Mastercard (

MA, Financial), paring 2.12% of its equity portfolio.

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Shares of Mastercard averaged $363.45 during the third quarter; the stock is modestly undervalued based on Monday’s price-to-GF Value ratio of 0.87.

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GuruFocus ranks the Purchase, New York-based credit service company’s profitability 9 out of 10 on several positive investing signs, which include a five-star business predictability rank and an operating margin that has increased approximately 0.8% per year on average over the past five years and outperforms more than 81% of global competitors.

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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.
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