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Steve Mandel's Lone Pine Exits Alibaba, Starts 4 Positions in the 2nd Quarter

GuruFocus.com

Lone Pine Capital, the firm founded by Steve Mandel (Trades, Portfolio), disclosed last week that its top trades during the second quarter included the shuttering of its Alibaba Group Holding Ltd. (NYSE:BABA) stake and new holdings in the following four companies: Booking Holdings Inc. (NASDAQ:BKNG), Capital One Financial Corp. (NYSE:COF), Datadog Inc. (NASDAQ:DDOG) and Salesforce.com Inc. (NYSE:CRM).


Mandel started Lone Pine in 1997, following a seven-year tenure as senior managing director and consumer analyst at Julian Robertson (Trades, Portfolio)'s Tiger Management. The former tiger cub's firm employs a long-short equity strategy, building its portfolio using fundamental analysis, bottom-up stock picking and value and growth methodologies.

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As of the quarter-end, Lone Pine's $19.79 billion equity portfolio contains 29 stocks, with seven new positions and a turnover ratio of 26%. The top three sectors in terms of weight are technology, financial services and communication services, with weights of 35.79%, 15.90% and 14.39%.

Sold out: Alibaba

Lone Pine sold 6,336,587 U.S.-listed shares of Alibaba, knocking off 7.31% of its equity portfolio. Shares averaged $207.72 during the second quarter. Based on GuruFocus estimates, the firm gained approximately 45.12% on the investment since initially buying shares during the third quarter of 2016.

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GuruFocus ranks the Chinese e-commerce giant's profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, consistent revenue growth and operating margins that are outperforming over 94% of global competitors despite contracting over the past five years.

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Gurus with large holdings in Alibaba's U.S.-listed shares include Ken Fisher (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).

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The Matthews China Fund (Trades, Portfolio) also sold out of Alibaba's U.S.-listed shares during the second quarter, replacing the stake with a 4.8 million-share holding in the company's Hong Kong-listed shares (HKSE:09988).

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Booking

Lone Pine purchased 596,133 shares of Booking, giving the position 4.80% weight in the equity portfolio. Shares averaged $1,519.55 during the second quarter.

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GuruFocus ranks the Norwalk, Connecticut-based travel reservation giant's profitability 9 out of 10 on the back of profit margins and returns outperforming over 95% of global competitors.

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Gurus with large holdings in Booking include Dodge & Cox and Pioneer Investments (Trades, Portfolio).

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Capital One

Lone Pine purchased 10,278,292 shares of Capital One, giving the holding 3.25% weight in the equity portfolio. Shares averaged $62.04 during the second quarter.

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GuruFocus ranks the McLean, Virginia-based credit service company's financial strength 3 out of 10: Although the cash-to-debt and debt-to-equity ratios outperform over 63% of global competitors, Capital One's equity-to-asset ratio of 0.13 underperforms 82.61% of global credit service companies.

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Datadog

Lone Pine purchased 6,832,849 shares of Datadog, giving the stake 3% equity portfolio weight. Shares averaged $60.33 during the second quarter.

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The New York-based company operates a platform that integrates and automates infrastructure monitoring, application performance monitoring and log management. GuruFocus ranks Datadog's financial strength 7 out of 10 on the back of a double-digit Altman Z-score and a cash-to-debt ratio that outperforms half of global competitors.

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Salesforce.com

Lone Pine purchased 3,045,252 shares of Salesforce.com, giving the position 2.88% weight in the equity portfolio. Shares averaged $168.06 during the second quarter.

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GuruFocus ranks the customer relationship management software company's financial strength 7 out of 10 on several positive investing signs, which include a strong Altman Z-score of 6.

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Disclosure: No positions.

Read more here:

  • Top 5 Buys of Chase Coleman's Tiger Global in 2nd Quarter

  • David Einhorn's Top 5 Trades in the 2nd Quarter

  • Carl Icahn Discards HP Stake in the 2nd Quarter



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This article first appeared on GuruFocus.