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. Prior to that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies, and reportedly beat the S&P 500 for 11 years in a row. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued ones.
The company's reportable stock portfolio totaled $17.0 billion in value as of June 30, 2012.
So what does Lone Pine Capital's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Netflix (Nasdaq: NFLX ) , which has seen its stock chopped by about 75% over the past year, leading some to now see it as a bargain. Its future isn't crystal clear, though, as it has formidable competition from Amazon.com and other fronts, and the content that it needs to acquire isn't cheap. Still, it's growing, and expanding abroad, and some even speculate that it might get bought out.
Among holdings in which Lone Pine increased its stake was IT consulting and outsourcing specialist Cognizant Technology Solutions (Nasdaq: CTSH ) . The company's growth has slowed a bit in recent years, but it recently reported solid revenue and earnings increases. Cognizant (and its peers) are expecting slowing demand due to global economic malaise. Still, it's been retaining plenty of business, recently inking a $330 million deal (over seven years) with ING, for example. One advantage it has is its focus on North America, doing less business in troubled Europe than many rivals.
Lone Pine reduced its stake in a handful of companies, including "big data" specialist Teradata (NYSE: TDC ) . The stock has zoomed some 46% over the past year, which probably has some looking for more undervalued stocks. But Teradata still seems to have plenty of room to grow, offering data warehousing solutions, among other things, to companies that desperately need it. Its revenue and earnings have been growing at double-digit rates over the past few years, and growth rates have been accelerating, too.
Finally, Lone Pine unloaded several companies, such as Green Mountain Coffee Roasters (Nasdaq: GMCR ) and Las Vegas Sands (NYSE: LVS ) . Coffee purveyor Green Mountain has seen its stock grow by an average of 36% annually over the past decade, but also plunge some 77% over the past year. Bears worry about device saturation, management missteps, and patents that will expire soon, ushering in more competition. (Some doubt its move into lemonade, as well.) It, too, is thought of as a possible acquisition target, now that its stock has sunk.
Meanwhile, shares of Las Vegas Sands have sunk about 9%, due in part to sluggishness in Las Vegas itself. It's a major player in Asia, though, and many investors are bullish on its prospects in places such as Macau and Singapore, though in Macau some worry that its properties there will be taking business from each other. Growth there has been slowing, too, and the company has further expansion plans for Spain, Vietnam, and elsewhere.
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. 13F forms can be great places to find intriguing candidates for our portfolios.
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