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James Li
James Li
Articles (638)  | Author's Website |

4 of Chase Coleman’s Tech Stocks Near 52-Week Lows

Several of tech guru’s holdings reach 52-week lows following Wednesday’s market selloff

In light of Wednesday’s market selloff, Tiger Global Management’s portfolio contains four tech stocks near 52-week lows: Facebook Inc. (NASDAQ:FB), Dropbox Inc. (NASDAQ:DBX), Fitbit Inc. (NYSE:FIT) and Switch Inc. (NYSE:SWCH).

Tiger Global Management, led by Chase Coleman (Trades, Portfolio), primarily invests in technology companies. The portfolio has 35.88% weight in technology, the firm’s second-largest sector in terms of market weight.

Dow continues losses from Wednesday

The Dow Jones industrial average traded approximately 300 points lower in intraday trading Thursday, following Wednesday’s 800-point nosedive sparked by higher Treasury yields and a selloff in technology shares.

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CNBC columnists Fred Imbert and Jordan Novet said on Wednesday that the technology sector had “the worst day in more than seven years”: the S&P 500 Information Technology index plunged 4.8%, lead by losses from Apple Inc. (NASDAQ:AAPL), Microsoft Corp. (NASDAQ:MSFT) and Google parent Alphabet Inc. (NASDAQ:GOOGL).

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Facebook

Tiger Global has not released its third-quarter portfolio as the deadline is 45 days after quarter-end. As of the second quarter, the firm owns 5,278,160 shares of Facebook, which is trading approximately 2.67% higher than its 52-week low of $140.92.

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Menlo Park, California-based Facebook offers a wide variety of social media platforms, including Facebook, Instagram, Messenger, WhatsApp and Oculus. GuruFocus ranks the company’s financial strength and profitability 9 out of 10 on several positive investing signs, which include robust interest coverage and operating margins that have increased approximately 26.80% per year over the past five years.

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Facebook’s Piotroski F-score ranks 7 out of 9, driven  positive indicators like higher returns on assets and asset turnover year over year. The company’s margins and returns outperform over 96% of global competitors.

According to aggregated portfolio data, Facebook is one of the most broadly held companies: 45 gurus own Facebook with a combined weighting of 114.43%. Gurus with large holdings in Facebook include Frank Sands (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio) and Spiros Segalas (Trades, Portfolio).

Dropbox

Coleman’s firm owns 200,000 shares of Dropbox, a San Francisco-based company that provides cloud-based file storage, sharing and project collaboration services to individuals and enterprises. Shares of Dropbox trade approximately 3.16% above from the 52-week low of $22.15.

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Dropbox CEO Drew Houston said in August that second-quarter revenues of $339.2 million increased 27% year over year, “reflecting the strength of [the company’s] unique business model.” The company increased its paying user count 2 million from the prior-year quarter and averaged approximately $116.66 in revenue per paying user.

Fitbit

Tiger Global owns 500,000 shares of Fitbit, a major provider of fitness tracking devices, wearable devices and fitness goals. Shares of Fitbit trade approximately 0.67% higher than the 52-week low of $4.51.

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Fitbit warned in its second-quarter earnings release that revenues are expected to decline approximately 3% year over year during the third quarter. The company detailed the risk of high competition in the wearables market in its latest annual report, including comments about the Apple Watch, a wearable device with similar health and fitness tracking capabilities that the Cupertino, California-based company “has sold a significant volume of” since introduction.

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Fitbit’s margins and returns underperform over 90% of global competitors, suggesting low profitability and growth potential relative to peers.

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Switch

Tiger Global owns 900,000 shares of Switch, a Las Vegas-based technology infrastructure company. Shares of Switch trade approximately 3.42% above the 52-week high of $8.77.

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GuruFocus lists three positive investing signs for Switch, including a price-sales ratio near a one-year low and a dividend yield near a one-year high.

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Other gurus with holdings in Switch include Paul Tudor Jones (Trades, Portfolio) and Chris Davis (Trades, Portfolio).

Disclosure: No positions.

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About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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