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Chase Coleman's 3rd-Quarter Buys

Chase Coleman (Trades, Portfolio)'s Tiger Global Management recently released its portfolio update for the quarter ended Sept. 30. During the quarter, the hedge fund sold out of Eventbrite Inc. (EB), Pivotal Software Inc. (PVTL) and Luckin Coffee Inc. (LK) and reduced its stake in Fiat Chrysler Automobiles NV (FCAU) by 20.24%. Its major new buys included New Relic Inc. (NYSE:NEWR) and Anaplan Inc. (NYSE:PLAN), while major additions included Alibaba Group Holding Ltd. (NYSE:BABA) and Facebook Inc. (NASDAQ:FB).


Tiger Global Management (not to be confused with Princeton's student-run Tiger Capital Management) was founded in 2001 by Chase Coleman (Trades, Portfolio) after hedge fund legend Julian Robertson (Trades, Portfolio) handed him $25 million to start his own fund. The fund's strategy is to deploy capital globally, focusing on early- and late-stage venture, post-initial public offering, private equity and secondary market stocks.

As of the end of the recent quarter, the fund was valued at $18.66 billion. It now owns shares of 84 stocks, 10 of which are new holdings. Its top holdings are Microsoft Corp. (MSFT) at 11.25%, Facebook Inc. (NASDAQ:FB) at 10.58% and JD.com Inc. (JD) at 7.9%. In terms of portfolio weighting, the firm is most heavily invested in technology (31.8%), consumer cyclical (30.63%) and communication services (19.76%).

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New Relic

Tiger Global Management established a new stake of 2,920,000 shares in New Relic, impacting the equity portfolio by 0.95%. During the quarter, shares were trading at an average price of $72.37 per share.

New Relic is a San Francisco-based software analytics company that provides products for the building of software and the management of complex systems. Its cloud-based platform centers around providing clarity in the midst of complex software environments. As of Dec. 3, the company has a market cap of $3.96 billion.

According to New Relic's steadily increasing revenue, its stock value rose steadily until reaching the heavily overvalued range in mid-2017, after which it staggered and had fallen to $67.96 as of Dec. 3. The dropping price is a result of consecutively disappointing quarterly results, as well as the fact the company has yet to turn a net profit.

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New Relic has a GuruFocus financial strength score of 4 out of 10 and a profitability score of 3 out of 10. It has a cash-debt ratio of 1.59, a return on capital of -35.97% and a three-year earnings per share without non-recurring items growth rate of 19.7%.

Anaplan

The firm also established a new holding of 1,207,000 shares in Anaplan, affecting the equity portfolio by 0.3%. Shares were trading at an average price of $54.24 during the quarter.

Like New Relic, Anaplan is another cloud-based software company with its headquarters in San Francisco. It provides software solutions in sectors such as finance, sales and marketing, with a focus on accelerated decision-making and connected planning.

Anaplan is a relatively new company, which is in line with Tiger Global's emphasis on venture capital. As you can see in the chart below, the company still has not managed to turn an overall profit, though its revenue is slowly increasing.

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GuruFocus has assigned Anaplan a financial strength score of 6.4 out of 10 and a profitability score 2.1 out of 10. It has a cash-debt ratio of 7.48, a return on capital of -234.38% and a three-year earnings per share without non-recurring items growth rate of -58.8%.

Alibaba

Tiger Global Management added 3,451,017 shares to its Alibaba position, affecting the equity portfolio by 3.06%. Shares were trading at an average price of $171.94 during the quarter.

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Alibaba is a Chinese multinational conglomerate with holdings in e-commerce, retail, internet and technology, among many others. By the measure of sheer business volume, Alibaba is the largest e-commerce company in the world, with millions of merchants and hundreds of millions of users.

The price of the e-commerce giant's stock came in to the "fairly valued" range after its previous quarter results showed a significant increase in net income.

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Alibaba has a GuruFocus financial strength score of 7 out of 10 and a profitability score of 9 out of 10. It has a cash-debt ratio of 1.65, a return on capital of 190.13% and a three-year earnings per share without non-recurring items growth rate of 5.5%.

Facebook

The firm also added 2,246,000 shares to its Facebook stake, affecting the equity portfolio by 2.12%. During the quarter, shares traded at an average price of $190.12.

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The social media giant is one of the top 10 hedge fund portfolio positions. Beginning in 2001, the top 10 hedge fund portfolio positions have been beating the S&P 500 approximately 61% of the time. These results have further increased the popularity of the stocks on the list.

The end of the quarter saw Facebook recovering its revenue and net income after the previous two quarters of disappointing results, raising it revenue to $17.7 billion from $16.8 billion and its net income to $7.1 billion from $2.6 billion compared to the previous quarter. These numbers were highly anticipated by investors, as Facebook previously made it clear that it would focus more on fixing some of its platform issues rather than profitability in the first half of 2019.

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GuruFocus has assigned Facebook a financial strength score of 8 out of 10 and a profitability score of 9 out of 10. The company currently has a cash-debt ratio of 572, a return on capital of 72.8% and a three-year earnings per share without non-recurring items growth rate of 80.4%.

Disclosure: Author owns no shares in any of the stocks mentioned.

Read more here:

  • Chris Davis' 3rd-Quarter Buys
  • Jeremy Grantham's 3rd-Quarter Buys
  • Chuck Akre's Biggest Transactions for the 3rd Quarter



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This article first appeared on GuruFocus.