$23 Billion Lone Pine Has Been Selling eBay, Pandora, and Michael Kors

Each of these stocks has many believers, though. See if you want to buy or sell.

Mar 10, 2014 at 5:30PM

The latest 13F season is here, when many money managers issue required reports on their holdings. It can be worthwhile to pay attention, as you might get an investment idea or two by seeing what some major investors have been buying and selling.

For example, consider Lone Pine Capital, founded by Steve Mandel in 1997. Prior to 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. Lone Pine's reportable stock portfolio totaled $23.2 billion in value as of Dec. 31, 2013.

Lone Pine Capital's latest 13F report shows that it reduced its position in Michael Kors Holdings (NYSE:KORS) by 36%, leaving it as the 16th-largest holding, while selling all its shares of eBay (NASDAQ:EBAY) and Pandora (NYSE:P).

"Affordable luxury" retailer Michael Kors reported solid third-quarter results last month, with revenue soaring 59% over year-ago levels and earnings per share surging 73%. Fashion is a competitive business, but Michael Kors is achieving fat profit margins in an environment when many rivals are blaming their weak performances on a tough winter and lackluster consumer spending. Michael Kors has plenty of room for expansion, both in the U.S. and in global markets, especially if demand remains as hot as it is. Management believes it has room for hundreds of additional global retail stores versus a recent total of 395 company-owned locations. It sees a lot of potential in regions such as Europe and China.

Vast online marketplace eBay reported a strong fourth quarter in January, with revenue and earnings up 13% and 16%, respectively, over year-ago levels. The company has been making significant investments, such as in a major Indian online marketplace, and has been morphing from being more of an auction house to more of a buy-it-now market -- somewhat more like Amazon.com, though without the costly warehouses. About 70% of purchases recently were buy-it-now transactions, rather than auctions. Meanwhile, activist investor Carl Icahn has been agitating for eBay to spin off its highly successful PayPal business (which generates about 40% of its revenue) -- and differences between him and the company have escalated recently. Many are not eager to see PayPal spun off, though, seeing the marketplace and transaction businesses working well together. Bulls love eBay's light business model and double-digit net margins -- though those margins have been shrinking a bit in recent years. But the company's free cash flow is sizable and growing, topping $3.7 billion annually.

Internet radio giant Pandora's stock has surged more than 150% over the past year, yet it has many doubters. Bears don't like its strong -- and growing -- competition, such as Sirius XM Radio and Spotify, as well as smart-device threats like Apple's iTunes Radio and CarPlay and Samsung's Milk Music. Bulls point out Pandora's 70% share of the Internet radio market and its solid revenue growth, and some see it as "best positioned to profit from the various shifts from terrestrial radio to streaming, and on air to mobile advertising."

Want to Retire Rich? These Stocks Can Help
The best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

Selena Maranjianwhom you can follow on Twitter, owns shares of Amazon.com, Apple, and eBay. The Motley Fool recommends Amazon.com, Apple, eBay, Michael Kors Holdings, and Pandora Media. The Motley Fool owns shares of Amazon.com, Apple, eBay, Michael Kors Holdings, Pandora Media, and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers