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James Li
James Li
Articles (775)  | Author's Website |

Julian Robertson Piles Into Facebook in 1st Quarter

'Father of hedge funds' starts one position, boosts four others

May 22, 2019 | About:

Julian Robertson (Trades, Portfolio), founder and CEO of Tiger Management, disclosed this week he launched one new position and increased his bet in four others, including Facebook Inc. (NASDAQ:FB), in his first-quarter portfolio report.

Considered the "father of hedge funds," Robertson founded Tiger Management in 1980 with $8 million and turned it into $22 billion in the late 1990s. Despite this, Robertson closed his hedge fund to outside investors in 2000 and has since managed his own money.

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Robertson has also mentored several gurus throughout the past few decades: Such “Tiger Cubs” include Lee Ainslie (Trades, Portfolio) of Maverick Capital, Chase Coleman (Trades, Portfolio) of Tiger Global Management, Andreas Halvorsen (Trades, Portfolio) of Viking Global, Steve Mandel (Trades, Portfolio) of Lone Pine Capital and Philippe Laffont (Trades, Portfolio) of Coatue Management.

During the first quarter, Robertson started a position in Camping World Holdings Inc. (NYSE:CWH) and increased his bet in Facebook, Apollo Global Management Inc. (NYSE:APO), Ooma Inc. (NYSE:OOMA) and Spotify Technology SA (NYSE:SPOT). As of quarter-end, Tiger Management’s $364 million equity portfolio contains 22 holdings, with high exposure to the financial services and technology sectors.

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Facebook

Robertson added 93,000 shares of Facebook, increasing the position 402.42% and his equity portfolio 4.26%. Shares of the Menlo Park, California-based social media giant averaged $158.51 during the first quarter.

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Facebook said on April 25 its daily average users for the March quarter were 1.56 billion, up 8% form the prior-year quarter. The company’s strong user base and average revenue per user growth boosted profit margins and returns, which are outperforming over 85% of global competitors. Such metrics contribute to a GuruFocus profitability rank of 8.

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Coleman, Mandel and Laffont also have large holdings in Facebook.

Camping World Holdings

Robertson purchased 567,737 shares of Camping World Holdings, giving the holding 2.17% equity portfolio space. Shares averaged $14 during the first quarter.

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The Lincolnshire, Florida-based company provides services, protection plans, products and resources for recreational vehicle enthusiasts across the U.S. GuruFocus ranks the company’s profitability 7 out of 10: Even though the net profit margins underperform over 77% of global competitors, Camping World’s return on equity, three-year revenue growth rate and three-year Ebitda growth rate are outperforming over 93% of global recreational vehicle companies.

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Apollo Global Management

Robertson added 689,502 shares of Apollo Global Management, increasing the position 61.51% and his equity portfolio 2.04%.

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The New York-based alternative investment management company deploys approximately $200 billion in assets to private equity, real estate and credit strategies. GuruFocus ranks Apollo’s financial strength 5 out of 10: Although the company has a moderately strong Altman Z-score of 2.47, its debt ratios are underperforming over 85% of global competitors.

Ooma

Robertson added 67,743 shares of Ooma, increasing the holding 8.46% and his equity portfolio 0.25%. Shares averaged $15.03 during the quarter.

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The Sunnyvale, California-based company provides innovative communication solutions and other connected services to small businesses, single-family homes and mobile users. GuruFocus ranks the company’s financial strength 8 out of 10 primarily due to no long-term debt. Despite this, Ooma’s profitability ranks a poor 4 out of 10 on several weak indicators, which include a low Piotroski F-score of 3 and profit margins that are underperforming over 86% of global competitors.

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Spotify

Robertson added 1,723 shares of Spotify, increasing the position 19.41% and his equity portfolio 0.07%. Shares averaged $136.52 during the quarter.

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Spotify said on April 29 that premium subscribers increased to 100 million, up 32% year over year and near the high end of management’s guidance. GuruFocus ranks the European music streaming service provider’s financial strength 6 out of 10: While the company has a strong Altman Z-score of 4.60 and cash-debt ratio of 2.93, Spotify’s debt-to-Ebitda ratio of 2.36 is closer to Joel Tillinghast’s warning level of 4 than it is to the optimal level of 0.

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!

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