An early investor in Meta Platforms Inc.’s (META, Financial) Facebook and Spotify Technology SA (SPOT, Financial), Chase Coleman (Trades, Portfolio), the founder of Tiger Global Management and one of the late Julian Robertson's former "tiger cubs," is known for focusing on small-cap stocks and technology startups.
The guru's New York-based hedge fund also searches for value opportunities among early-stage venture, late-stage venture, post-initial public offering and secondary market equities.
As the tech sector has had a strong performance in the first half of the year, investors may be interested in some of the stocks in the guru’s $1.84 billion equity portfolio that are undervalued according to an earnings-based discounted cash flow model.
GuruFocus portfolio data, which is based on 13F filings as of March 31, shows current tech positions in Coleman’s equity portfolio that have a solid margin of safety and high predictability are Lam Research Corp. (LRCX, Financial), Applied Materials Inc. (AMAT, Financial), Taiwan Semiconductor Manufacturing Co. Ltd. (TSM, Financial) and Fleetcor Technologies Inc. (FLT, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Lam Research
Shares of Lam Research (LRCX, Financial) are trading at a 48.07% discount to their fair value of $1,235.65 according to the earnings-based DCF model.
The Fremont, California-based manufacturer of semiconductor fabrication equipment has an $85.68 billion market cap; its shares were trading around $643.55 on Wednesday with a price-earnings ratio of 17.92, a price-book ratio of 10.31 and a price-sales ratio of 4.62.
The GF Value Line suggests the stock is fairly valued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 98 out of 100, the GF Score indicates the company has high outperformance potential, driven by high ratings for profitability, growth, momentum and financial strength as well as a more moderate value rank.
Lam Research also has a 4.5-star predictability rank. According to GuruFocus research, companies with this rank return an average of 10.6% annually over a 10-year period.
Of the gurus invested in Lam Research, Ken Fisher (Trades, Portfolio) has the largest stake with 2.01% of its outstanding shares. Frank Sands (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and many other gurus also own the stock.
Applied Materials
Generating a DCF fair value of $260.83, shares of Applied Materials (AMAT, Financial) are trading with a 44.78% margin of safety.
The company headquartered in Santa Clara, California, which supplies semiconductor manufacturing equipment, has a market cap of $118.69 billion; its shares were trading around $144.38 on Wednesday with a price-earnings ratio of 19.05, a price-book ratio of 8.64 and a price-sales ratio of 4.51.
According to the GF Value Line, the stock is fairly valued currently.
With a GF Score of 94, the company has high outperformance potential. While the ratings for four categories were solid, the value rank was low.
Applied Materials has a four-star predictability rank. GuruFocus data shows companies with this rank return, on average, 9.8% annually.
With a 0.89% stake, Al Gore (Trades, Portfolio)’s Generation Investment is the company’s largest guru shareholder. Fisher, PRIMECAP Management (Trades, Portfolio), Laffont and the T Rowe Price Equity Income Fund (Trades, Portfolio) also have significant holdings.
Taiwan Semiconductor Manufacturing
Taiwan Semiconductor’s (TSM, Financial) stock is trading at a 40.14% discount to its DCF fair value of $168.84.
The Taiwanese manufacturer of semiconductor chips has a $524.53 billion market cap; its shares were trading around $101.14 on Wednesday with a price-earnings ratio of 15.70, a price-book ratio of 4.78 and a price-sales ratio of 6.38.
Based on the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 100 implies the company has high outperformance potential on the back of solid ratings for profitability, growth, value, momentum and financial strength.
The company has a five-star predictability rank. GuruFocus found companies with this rank return an average of 12.1% annually.
Fisher has the largest stake in Taiwan Semiconductor with 0.49% of its outstanding shares. Other top guru investors include First Eagle, Steve Mandel (Trades, Portfolio), Baillie Gifford (Trades, Portfolio), Laffont, Sands, Ruane Cunniff (Trades, Portfolio), Ron Baron (Trades, Portfolio) and Sarah Ketterer (Trades, Portfolio).
Fleetcor Technologies
Yielding a 27.80% margin of safety, Fleetcor Technologies (FLT, Financial) is trading below its DCF value of $340.26.
The Atlanta-based company, which produces technology that streamlines payment processes, has a market cap of $18.05 billion; its shares were trading around $245.64 on Wednesday with a price-earnings ratio of 19.57, a price-book ratio of 6.29 and a price-sales ratio of 5.25.
The GF Value Line suggests the stock is significantly undervalued currently.
The GF Score of 93 means the company has high outperformance potential, receiving solid ratings for four of the criteria. The financial strength rank is more moderate.
Fleetcor also has a 3.5-star predictability rank. GuruFocus says companies with this rank return an annual average of 9.3%.
Holding 0.23% of Fleetcor’s outstanding shares, Coleman is the largest guru shareholder. Ray Dalio (Trades, Portfolio)’s Bridgewater Associates, Steven Cohen (Trades, Portfolio), Greenblatt and John Hussman (Trades, Portfolio) also have positions in the stock.
Additional opportunity
Another stock in Coleman’s equity portfolio as of the first quarter that was undervalued on a DCF basis was Visa Inc. (V, Financial).
