Coatue Management recently disclosed its 13F portfolio updates for the fourth quarter of 2021, which ended on Dec. 31.
Founded in 1999 and headquartered in New York, Coatue Management is an employee-owned private hedge fund sponsor. It launches and manages various hedge funds for clients and is perhaps best known for its tech-focused hedge fund. The firm mainly invests in U.S. and international publicly traded equity securities, but it also has short positions and investments in private equity and hedging markets. The firm’s chief investment officer is Philippe Laffont (Trades, Portfolio), who founded the firm after leaving Tiger Management. Laffont takes a top-down approach to stock picking and focuses on the information technology sector.
Based on its investing criteria, the firm’s biggest new buys for the quarter were Rivian Automotive Inc. (RIVN, Financial) and Pfizer Inc. (PFE, Financial), both of which made it into the top five trades. Rounding out the top five trades were reductions in DoorDash Inc. (DASH, Financial), Moderna Inc. (MRNA, Financial) and Marqeta Inc. (MQ, Financial).
Rivian Automotive
Laffont’s firm took a 35,226,301-share stake in Rivian Automotive (RIVN, Financial), giving it a 16.20% equity portfolio weight and replacing Tesla Inc. (TSLA, Financial) as its biggest EV investment. During the quarter, shares of Rivian averaged $114.72 apiece.
Founded in 2009 and headquartered in Irvine, California, Rivian is an electric vehicle automaker and automotive technology company. Its focus is on trucks and sport utility vehicles, and it just began producing vehicles in 2021.
On Feb. 23, shares of Rivian traded around $57.19 for a market cap of $51.52 billion. Since going public in November 2021, the stock is down 43%.
The company has a financial strength rating of 3 out of 10 and a profitability rating of 3 out of 10. After a successful initial public offering, it has a solid cash-debt ratio of 1.62 and a current ratio of 5.11. The operating and net margins are both negative, showing the company is far from being profitable.
Pfizer
The firm also initiated an investment in Pfizer (PFE, Financial) worth 10,311,917 shares, granting it a 2.70% equity portfolio weight. Shares traded for an average price of $49.81 in the three months through the end of December.
Pfizer is a multinational biopharmaceutical company headquartered in New York. Its main areas of research are internal medicine, inflammation and immunology, oncology, rare diseases, vaccines and anti-infectives.
On Feb. 23, shares of Pfizer traded around $46.87 for a market cap of $262.85 billion. According to the GF Value Line, the stock is significantly undervalued.
The company has a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. The interest coverage ratio of 15.65 and the Pitoroski F-Score of 6 out of 9 show a stable balance sheet. The return on invested capital is typically higher than the weighted average cost of capital, meaning the company is creating value for shareholders.
DoorDash
The firm reduced its DoorDash (DASH, Financial) holding by 68.98% for a remaining stake of 2,932,870 shares. The trade shaved 5.46% off the equity portfolio. During the quarter, shares changed hands for an average price of $188.51.
DoorDash is a food delivery service that connects customers with local restaurants. Launched in Palo Alto, California in 2012, the company has since grown to have the largest share of the third-party food delivery market in the U.S.
On Feb. 23, shares of DoorDash traded around $91.19 for a market cap of $31.29 billion. Since going public in December of 2020, the stock has lost 51%.
The company has a financial strength rating of 8 out of 10 and a profitability rating of 2 out of 10. The cash-debt ratio of 9.42 and Altman Z-Score of 9.52 show the company has plenty of financial firepower thanks to its fundraising efforts. The three-year revenue per share growth rate is stellar at 141.7%, though this has not translated to bottom-line growth yet, as the three-year Ebitda per share growth rate is -8.3%.
Moderna
The firm trimmed its Moderna (MRNA, Financial) investment by 29.13%, leaving a remaining stake of 4,287,003 shares and slimming the equity portfolio by 2.76%. Shares traded for an average price of $290.69 for the quarter.
Moderna is a biotechnology and pharmaceutical company based in Cambridge, Massachusetts. Its research focus is developing vaccines based on messenger RNA. Moderna's vaccine platform inserts synthetic nucleoside-modified messenger RNA into human cells using a coating of lipid nanoparticles.
On Feb. 23, shares of Moderna traded around $135.81 for a market cap of $55.22 billion. The Peter Lynch chart shows the stock trading below both its intrinsic value and its median historical valuation.
The company has a financial strength rating of 8 out of 10 and a profitability rating of 1 out of 10. With a cash-debt ratio of 15.28 and an interest coverage ratio of 479.09, the company has a fortress-like balance sheet. Despite excellent margins and top-line growth, the three-year Ebitda per share growth rate is -32.5%, dragging down the profitability rating, with only 10.4% of the decline being due to new share issuance.
Marqeta
Coatue Management cut its Marqeta (MQ, Financial) stake by 98.89%, leaving a remaining share count of 315,121 and reducing the equity portfolio by 2.46%. During the quarter, shares were trading for around $22.30 apiece.
Headquartered in Oakland, California, Marqeta is an IT service management company that provides an open API platform where companies can create, issue and deploy virtual and physical payment cards.
On Feb. 23, shares of Marqeta traded around $8.97 for a market cap of $4.85 billion. Since going public in June of 2021, the stock is down 70%.
The company has a financial strength rating of 8 out of 10 and a profitability rating of 1 out of 10. Strong funding has given the company a cash-debt ratio of 103.34. The operating and net margins are both in the negatives and trending downward.
Portfolio overview
As per the most recent SEC filings, the firm held shares of 81 common stocks valued at a total of $22.55 billion. The turnover for the third quarter was 33%.
The top holding was Rivian with 16.20% of the equity portfolio, followed by Tesla with 6.93% and Moderna with 4.83%.
In terms of sector weighting, the firm was most invested in consumer cyclical, technology and communication services.
