According to the Aggregated Portfolio of Gurus, five companies that Lee Ainslie (Trades, Portfolio), Chase Coleman (Trades, Portfolio)’s Tiger Global Management, Steve Mandel (Trades, Portfolio)’s Lone Pine Capital, Andreas Halvorsen (Trades, Portfolio) and Philippe Laffont (Trades, Portfolio) all have in common are Microsoft Corp. (MSFT, Financial), Alibaba Group Holding Ltd. (BABA, Financial), Amazon.com Inc. (AMZN, Financial), Facebook Inc. (FB, Financial) and Adobe Inc. (ADBE, Financial).
“Father of hedge funds” mentors several fund superstars
Legendary hedge fund investor Julian Robertson (Trades, Portfolio) founded Tiger Management in 1980 with $8 million and turned it into over $22 billion in the 1990s, resulting in one of the top hedge fund records during the aforementioned period. Despite this, Robertson closed his hedge fund to outside investors in 2000 and has since managed funds from his internal investments.
The guru has also mentored several younger but highly-successful hedge fund investors: Five of them are Ainslie, Coleman, Mandel, Halvorsen and Laffont. Such hedge fund managers are known as “tiger cubs”; further, Robertson’s protégés agree on several major companies.
Microsoft
The five gurus have a 32.36% combined weight in Microsoft, the company founded by legendary investor Bill Gates (Trades, Portfolio). Coleman’s firm and Halvorsen lead the streak with equity portfolio weights of 8.65% and 6.61%.
The Redmond, Washington-based company provides a wide range of products and services through its three business segments: productivity and business services, intelligent cloud and more personal computing. GuruFocus ranks Microsoft’s profitability 9 out of 10 on several positive indicators, which include a strong Piotroski F-score of 8, a business predictability rank of 4.5 stars out of five and profit margins that are outperforming 95% of global competitors despite contracting approximately 1.6% per year over the past five years.
Alibaba
The five tiger cubs have a 25.50% combined weight in Alibaba, the Chinese e-commerce giant. Laffont and Mandel’s firm lead the streak with equity portfolio weights of 6.29% and 6.02%.
Alibaba operates several online marketplaces, which include customer-to-customer platform Taobao and business-to-customer platform Tmall. GuruFocus ranks Alibaba’s profitability 8 out of 10: Operating margins are still outperforming over 97.55% of global competitors despite contracting 15.70% per year over the past five years. Additionally, Alibaba’s three-year revenue growth rate and three-year Ebitda growth rate are outperforming over 93% of global specialty retail companies.
Amazon.com
The five investors have a 24.13% combined weight in Amazon.com, Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial)’s new holding for the first quarter. Laffont and Coleman’s firm lead the streak with equity portfolio weights of 7.02% and 6.92%.
GuruFocus ranks the Seattle-based e-commerce giant’s financial strength 7 out of 10: Even though the company’s interest coverage of 10.26 underperforms 71.74% of global competitors, Amazon.com has a solid Piotroski F-score of 6 and a strong Altman Z-score of 6.09. Additionally, Amazon.com’s profitability ranks 8 out of 10 on positive signs like expanding profit margins and a four-star business predictability rank.
David Tepper (Trades, Portfolio), who plans to convert his Appaloosa Management hedge fund into a family office according to a CNBC post dated Thursday, also established a holding in Amazon.com during the first quarter.
The five tiger cubs have a 21.98% combined weight in Facebook, one of Robertson’s top buys for the quarter. Coleman’s firm and Laffont lead the streak with equity portfolio weights of 8.13% and 7.01%.
GuruFocus ranks Facebook’s financial strength 9 out of 10 on several positive indicators, which include robust interest coverage and a strong Altman Z-score of 16.10. Other positive signs include expanding profit margins and a three-year revenue growth rate that outperforms 89.33% of global competitors, factors that contribute to a GuruFocus profitability rank of 8.
Adobe
The five gurus have an 18.82% combined holding in Adobe, the software company known for its “portable document format” processor. Mandel’s firm and Laffont lead the streak with equity portfolio weights of 7.05% and 6.15%.
GuruFocus ranks Adobe’s profitability 9 out of 10 on several positive indicators, which include a return on assets near a 10-year high of 16%, a three-year revenue growth rate that outperforms 83.11% of global competitors and operating margins that have increased approximately 28.10% per year over the past five years on average.
See also
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Disclosure: No positions.
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