Legendary investor Julian Robertson is not just known for his leadership of Tiger Management, but also for taking a group of protégés under his wing. These student investors, many of whom later opened their own practices, are referred to as “tiger cubs.”
As they learned from the same teacher, it is no surprise that some of these guru fund managers have similar investing styles and even invest in some of the same stocks. An example of this is Chase Coleman, who now heads up Tiger Global Management, and Philippe Laffont, leader of Coatue Management.
As of the end of the third quarter, the Aggregated Portfolio, a Premium GuruFocus feature, found both gurus have positions in Microsoft Corp. (NASDAQ:MSFT), Facebook Inc. (NASDAQ:FB), Alibaba Group Holding Ltd. (NYSE:BABA), Amazon.com Inc. (NASDAQ:AMZN) and JD.com Inc. (NASDAQ:JD).
Microsoft
In the third quarter, Coleman made no changes to his Microsoft stake, while Laffont reduced his holding by 6.58%. They have a combined equity portfolio weight of 16.02% in the stock.
The Redmond, Washington-based software company has a $1.15 trillion market cap; its shares were trading around $150.66 on Friday with a price-earnings ratio of 45.64, a price-book ratio of 9.82 and a price-sales ratio of 7.43.
The Peter Lynch chart shows the stock is trading higher than its fair value, suggesting it is overpriced.
GuruFocus rated Microsoft’s financial strength 6 out of 10. On top of comfortable interest coverage and a good cash-debt ratio of 1.79, the high Altman Z-Score of 5.61 indicates the company is financially sound.
The company’s profitability scored a perfect 10 out of 10 rating on the back of operating margin expansion, good returns that outperform a majority of competitors and a high Piotroski F-Score of 8, which means operations are healthy. Driven by consistent earnings and revenue growth, Microsoft also has a business predictability rank of four out of five stars. According to GuruFocus, companies with this rank typically see their stocks gain an average of 9.8% per annum over a 10-year period.
GuruFocus estimates Coleman has gained 81.77% on his investment since the fourth quarter of 2016, while Laffont has gained roughly 23.2% since the fourth quarter of 2017.
Of the gurus invested in Microsoft, PRIMECAP Management has the largest stake with 0.42% of outstanding shares. Other top investors include Dodge & Cox, Ken Fisher, Pioneer Investments, Spiros Segalas, and Barrow, Hanley, Mewhinney & Strauss.
Coleman boosted his Facebook stake by 25.02% in the third quarter, while Laffont trimmed his position by 4.26%. They have a combined portfolio weight of 15.94% in the stock.
The social media company, which is headquartered in California, has a market cap of $568.52 billion; its shares were trading around $199.36 on Friday with a price-earnings ratio of 32, a price-book ratio of 6.09 and a price-sales ratio of 8.66.
According to the Peter Lynch chart, the stock is overvalued.
Boosted by comfortable interest coverage and a high cash-debt ratio, Facebook’s financial strength was rated 8 out of 10 by GuruFocus. The robust Altman Z-Score of 13.38 suggests the company is in good financial health.
The company’s profitability scored a 9 out of 10 rating, driven by operating margin expansion, strong returns that outperform a majority of industry peers and a moderate Piotroski F-Score of 5, which indicates business conditions are stable.
GuruFocus data shows Coleman has gained an estimated 15% on his investment since the fourth quarter of 2016. Laffont has gained roughly 52.69% since the fourth quarter of 2013.
Coleman is the company’s largest guru shareholder with 0.44% of outstanding shares. Other top guru investors include Andreas Halvorsen, Segalas, Frank Sands, Jim Simons’ Renaissance Technologies, Chris Davis, David Tepper and First Pacific Advisors.
Alibaba
During the third quarter, Coleman increased his Alibaba stake by 79.71% and Laffont boosted his position by 23.9%. They have a combined equity portfolio weight of 12.49% in the stock.
The Chinese e-commerce company has a $538.28 billion market cap; its shares were trading around $199.83 on Friday with a price-earnings ratio of 23.55, a price-book ratio of 6.05 and a price-sales ratio of 8.07.
Based on the Peter Lynch chart, the stock appears to be overvalued.
Supported by adequate interest coverage and a high cash-debt ratio, GuruFocus rated Alibaba’s financial strength 7 out of 10. Further, the Altman Z-Score of 6.7 suggests the company is financially stable.
The company’s profitability scored an 8 out of 10 rating. Although the operating margin is in decline, it still outperforms a majority of competitors. In addition, Alibaba has good returns, consistent earnings and revenue growth, a moderate Piotroski F-Score of 6 and a 2.5-star business predictability rank. GuruFocus says companies with this rank typically see their stock prices gain an average of 7.3% per year.
Since establishing the position in third-quarter 2016, GuruFocus estimates Coleman has gained 17.52% on the investment. Laffont has gained approximately 39.79% over the same period.
Of the gurus invested in Alibaba, PRIMECAP has the largest position with 0.58% of outstanding shares. Fisher, Sands, Steve Mandel, Pioneer, Segalas, Davis and several other gurus also have positions in the stock.
Amazon.com
Coleman left his Amazon position unchanged in the third quarter, while Laffont curbed his holding by 1.6%. The gurus have a combined portfolio weight of 10.44% in the stock.
The Seattle-based e-commerce giant has a market cap of $869 billion; its shares were trading around $1,749 on Friday with a price-earnings ratio of 77.38, a price-book ratio of 15.31 and a price-sales ratio of 3.3.
The Peter Lynch chart suggests the stock is overvalued.
Amazon’s financial strength was rated 6 out of 10 by GuruFocus as a result of sufficient interest coverage. It also has a high Altman Z-Score of 5.45.
The company’s profitability fared even better, scoring a 9 out of 10 rating on the back of expanding margins, strong returns that outperform over half of industry peers and a moderate Piotroski F-Score of 6. Supported by steady earnings and revenue growth, Amazon also has a four-star business predictability rank.
Coleman has gained roughly 67% on his investment since the second quarter of 2015. GuruFocus data shows Laffont has gained around 55% since the fourth quarter of 2013.
With a 0.36% stake, Fisher has the largest position in Amazon. Other top guru shareholders include Sands, Segalas, Halvorsen, Pioneer, Davis, Mandel, Warren Buffett, PRIMECAP and Tepper.
JD.com
Coleman left his JD.com stake unchanged in the third quarter, while Laffont established a 268,740-share holding. The stock has a combined weight of 7.96% in their equity portfolios.
The e-commerce company, which is headquartered in China, has a market cap of $48.08 billion; its shares were trading around $33 on Friday with a price-earnings ratio of 89.21, a price-book ratio of 4.51 and a price-sales ratio of 0.61.
According to the Peter Lynch chart, the stock is overvalued.
GuruFocus rated JD’s financial strength 7 out of 10. In addition to adequate interest coverage and a good cash-debt ratio, the Altman Z-Score of 3.52 indicates the company is in good standing financially.
The company’s profitability did not fare as well, scoring a 4 out of 10 rating due to margins and returns underperforming competitors and recording a slowdown in revenue per share growth over the past 12 months. JD is supported, however, by a moderate Piotroski F-Score of 5.
According to GuruFocus, Coleman has gained an estimated 0.10% on his investment since the fourth quarter of 2014. Laffont has gained roughly 14.58%.
Coleman is the company’s largest guru shareholder with 3.62% of outstanding shares. Halvorsen, Dodge & Cox, Fisher, First Pacific, Steven Romick, Davis, Steven Cohen, Simons’ firm and several other gurus also have positions in the stock.
