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Steve Mandel's Lone Pine Dines at Domino's, Buys 5 Stocks in 2nd Quarter

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Lone Pine Capital, the hedge fund founded by Julian Robertson (Trades, Portfolio) protege Steve Mandel (Trades, Portfolio), disclosed over the past few weeks that it raised its bet on Domino's Pizza Inc. (NYSE:DPZ) on Aug. 20 and established five new positions during the second quarter: Activision Blizzard Inc. (NASDAQ:ATVI), Uber Technologies Inc. (NYSE:UBER), Chewy Inc. (NYSE:CHWY), Coupa Software Inc. (NASDAQ:COUP) and Atlassian Corp. PLC (NASDAQ:TEAM).

Mandel worked at Robertson's Tiger Management prior to founding Lone Pine, a long-short hedge fund that invests in public equity markets across the globe using a fundamental, bottom-up stock strategy. While he stepped down from a day-to-day management role in February, the founder of the Greenwich, Connecticut-based firm remains a managing member.

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As of June 30, Lone Pine's $16.09 billion equity portfolio contains 31 stocks, of which six represent new positions. The top three sectors in terms of weight are technology, consumer cyclical and industrials, with weights of 36.03%, 32.65% and 13.91%.

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Domino's

Having purchased 1,247,255 shares during the June quarter, Lone Pine added 825,487 shares on Aug. 20, increasing the stake 66.18%. Shares of Domino's, which occupy 2.96% of the equity portfolio, traded around $232.43 on Aug. 20 despite averaging $273.55 during the second quarter.

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The Ann Arbor, Michigan-based pizza restaurant chain generates revenue from royalties from franchises based on a percentage of sales; sales made in company-owned stores; and sales of food, equipment and supplies to franchisees through the company's supply chain management.

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GuruFocus ranks Domino's profitability 8 out of 10 on several positive investing signs, which include margins and returns that outperform over 85% of global competitors. Additionally, Domino's' business predictability ranks three stars out of five on consistent revenue growth over the past 10 years.

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Other gurus attending Domino's pizza party include Joel Greenblatt (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).

Read more here:

  • Warren Buffett's Top 7 Holdings as of His 89th Birthday

  • Wasatch International Growth Fund's Top 6 Buys of the 2nd Quarter

  • Charles de Vaulx's Top 5 Buys of the 2nd Quarter



Activision Blizzard

Lone Pine purchased 10,324,534 shares of Activision Blizzard, giving the position 3.03% equity portfolio weight. Shares averaged $45.86 during the quarter.

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The Santa Monica, California-based company publishes popular video games like "World of Warcraft" and "Call of Duty." GuruFocus ranks Activision's profitability 8 out of 10 on several positive investing signs, which include a strong Piotroski F-score of 8 and operating margins that outperform over 85% of global competitors despite contracting approximately 5.5% per year on average over the past five years.

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Uber

Lone Pine purchased 3,001,420 shares of Uber, giving the holding 0.78% weight in the equity portfolio. Although the stock averaged $42.42 during the period between its May 10 initial public offering and June 30, shares of Uber continued setting all-time lows on the heels of the company reporting a weaker-than-expected net loss during the second quarter. On Tuesday, the stock traded at an intraday low of $30.92.

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Chewy

Lone Pine purchased 3,292,923 shares of Chewy, giving the stake 0.72% weight in the equity portfolio. According to GuruFocus Real-Time Picks, a Premium feature, the fund made the transaction on June 14, the day of the company's IPO. Shares traded for $34.99 that day.

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The Dania Beach, Florida-based company operates an online source for pet products, supplies and prescriptions. Chewy said in a July 18 press release that net sales for the three months ending May 5 were $1.1 billion, up 45.2% year over year.

Coupa

Lone Pine purchased 652,854 shares of Coupa, giving the position 0.51% weight in the equity portfolio. Shares averaged $107.11 during the quarter.

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The San Mateo, California-based company offers cloud-based spend management platforms through various applications to its clients. According to GuruFocus, Coupa's equity-to-debt and debt-to-equity ratios are underperforming over 70% of global competitors despite a robust Altman Z-score of at least 7.

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Atlassian

Lone Pine purchased 37,900 shares of Atlassian, giving the position 0.03% weight in the equity portfolio. Shares averaged $120.34 during the quarter.

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The U.K.-based company designs, develops and licenses software products like JIRA, Confluence, HipChat and BitBucket. GuruFocus ranks Atlassian's financial strength 5.2 out of 10: Although the company has a strong Altman Z-score of 7.89, its debt-to-equity ratio underperforms 91% of global competitors.

Disclosure: No positions.

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This article first appeared on GuruFocus.