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Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at Lone Pine Capital, founded by Steve Mandel in 1997. Before that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies, and has reportedly outperformed the S&P 500 handily since inception. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued ones.
The company's reportable stock portfolio totaled $19.3 billion in value as of March 31.
So what does Lone Pine Capital's latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings are Valeant Pharmaceuticals International and Virgin Media. Other new holdings of interest include Yandex (NASDAQ: YNDX ) , the Russian search-engine company that has seen its stock spike more than 40% over the past year. The stock surged on a strong first-quarter earnings report that featured revenue up 36% and earnings up 79%. Despite many bullish signs, there has been significant insider selling, and management is planning to buy back many shares. With Internet usage growing briskly in Russia, some see the stock as a good buy.
Among holdings in which Lone Pine Capital increased its stake are Intuitive Surgical (NASDAQ: ISRG ) and Ulta Salon (NASDAQ: ULTA ) . Intuitive Surgical, specializing in robotic surgical equipment, has had a bumpy year, thanks to bearish comments from a research company and questions about the efficacy of its systems. Some legal worries were eased recently, with a victory in court. While some wonder whether the company's growth prospects are slowing down, others love the company's competitive advantages and dominance in its promising market.
Beauty-product retailer Ulta has been in a slump lately, and analysts at Goldman Sachs have downgraded the stock from "buy" to "neutral." Some worry about threats from online retailing, but others have been reassured by a long string of expectations-exceeding quarterly reports. Ulta stores also feature salons on the premises, which online competition can't match.
Lone Pine Capital reduced its stake in lots of companies, including apparel and accessories specialist Michael Kors Holdings (NYSE: KORS ) , which went public in 2011 and is expected to post revenue and earnings growth rates in the double digits in the coming years. Kors is focused on growing its North American business, in part via its store-within-a-store model, and also by moving its e-commerce operations in-house. It's taking aim at China as well. Naysayers see the stock as richly valued and worry about slowing growth.
Finally, Lone Pine Capital's biggest closed positions included Facebook (NASDAQ: FB ) and Crown Castle International. Facebook has seen its stock slide in the past year, as doubters fret that the company is losing some ground in popularity and wonder how well it will be able to monetize its massive membership. Facebook faces serious competition, too, from companies such as LinkedIn, Google, and Yahoo!. LinkedIn is seen as being more effective at monetizing its base, while Yahoo!'s purchase of Tumblr is a cause for concern. A key to Facebook's ultimate success seems to lie in the mobile arena.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing, and 13-F forms can be great places to find intriguing candidates for our portfolios.
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