In light of Wednesday’s market selloff, Tiger Global Management’s portfolio contains four tech stocks near 52-week lows: Facebook Inc. (FB, Financial), Dropbox Inc. (DBX, Financial), Fitbit Inc. (FIT, Financial) and Switch Inc. (SWCH, Financial).
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.
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. (AAPL, Financial), Microsoft Corp. (MSFT, Financial) and Google parent Alphabet Inc. (GOOGL, Financial).
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.
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.
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.
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.
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.
Fitbit’s margins and returns underperform over 90% of global competitors, suggesting low profitability and growth potential relative to peers.
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.
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.
Other gurus with holdings in Switch include Paul Tudor Jones (Trades, Portfolio) and Chris Davis (Trades, Portfolio).
Disclosure: No positions.
Read more here:
