Steve Mandel (Trades, Portfolio), portfolio manager of Lone Pine Capital, disclosed on Aug. 14 that his three new positions for the second quarter were Canadian Pacific Railway Ltd. (CP, Financial), Nvidia Corp. (NVDA, Financial) and Mohawk Industries Inc. (MHK, Financial).
A former protégé of Julian Robertson (Trades, Portfolio)’s Tiger Management, Mandel named his fund after a pine tree that survived a lightning strike at Dartmouth College, his alma mater. Lone Pine Capital invests in companies using a long-short equity strategy. The fund builds its portfolio through fundamental analysis and “bottom-up stock picking.”
Canadian Pacific
Mandel invested in 2,861,578 shares of Canadian Pacific for an average price of $183.73 per share. The fund manager dedicated 2.77% of his equity portfolio to the position.
Canadian Pacific provides freight transportation services, logistics solutions and supply chain expertise in Canada and the U.S. The company’s profitability ranks 8 out of 10 on several positive investing signs, including expanding operating margins and a strong Piotroski F-score of 7. The company's net margin of 33.90% and return on equity of 37.54% both outperform over 94% of global competitors.
Nvidia
Mandel invested in 2,134,768 shares of Nvidia for an average price of $242.85 per share. The fund manager dedicated 2.67% of his equity portfolio to the position.
Nvidia designs graphics chips for various end markets, including high-end personal computers for gaming, data centers and automotive entertainment centers. CEO Jensen Huang said on Aug. 16 that revenues for the quarter ending July 29 increased 40% year over year on strong growth across the company’s platforms, spurred by the “widening gap between demand for computing across every industry and the limits reached by traditional computing.”
GuruFocus ranks Nvidia’s financial strength 8 out of 10 and profitability 9 out of 10, both suggesting a good business with strong growth potential. The company’s operating margin has increased approximately 20.5% per year over the past five years and is outperforming 97% of global competitors.
Ray Dalio (Trades, Portfolio)’s Bridgewater Associates also established a stake in Nvidia during the quarter.
Mohawk Industries
Mandel invested in 477,072 shares of Mohawk Industries for an average price of $219.17 per share. The fund manager dedicated 0.54% of his equity portfolio to the position.
Mohawk Industries manufactures various flooring products, including carpets, ceramic tiles, laminate and wood. GuruFocus ranks the company’s profitability 6 out of 10: although it has expanding operating margins, Mohawk’s three-year revenue growth rate of 6% outperforms just 65% of global competitors.
See also
Mandel’s top five holdings as of the June quarter are Microsoft Corp. (MSFT, Financial), Alibaba Group Holding Ltd. (BABA, Financial), Activision Blizzard Inc. (ATVI, Financial), Adobe Systems Inc. (ADBE, Financial) and Booking Holdings Inc. (BKNG, Financial). The guru’s top sectors in terms of portfolio weight are technology, consumer cyclical and industrials.
Disclosure: No positions.
