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Steven Cohen's Top 5 Holdings as of 4th-Quarter 2019

According to GuruFocus' top 10 holdings data, a Premium feature, billionaire investor Steven Cohen (Trades, Portfolio)'s five largest positions as of the end of fourth-quarter 2019 were Amazon.com Inc. (NASDAQ:AMZN), PayPal Holdings Inc. (NASDAQ:PYPL), Fidelity National Information Services Inc. (NYSE:FIS), Alibaba Group Holding Ltd. (NYSE:BABA) and NXP Semiconductors NV (NASDAQ:NXPI).


With the goal of generating superior risk-adjusted returns, the guru's Stamford, Connecticut-based firm, Point72 Asset Management, executes a long-short strategy that involves fundamental, bottom-up research processes, macro investments and insights.

Amazon

Cohen's largest holding is 198,338 shares of Amazon, which account for 1.93% of the equity portfolio. According to GuruFocus, the guru has made an estimated gain of 29.33% on the investment since the first quarter of 2017.

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The Seattle-based e-commerce company has an $834.63 billion market cap; its shares were trading around $1,676.61 on Friday with a price-earnings ratio of 75.12, a price-book ratio of 13.87 and a price-sales ratio of 3.1.

The Peter Lynch chart shows the stock is trading above its fair value, suggesting it is overpriced. The GuruFocus valuation rank of 2 out of 10 supports this assessment even though the price ratios are near multiyear lows.

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GuruFocus rated Amazon's financial strength 6 out of 10, driven by sufficient interest coverage and a high Altman Z-Score of 4.78, which indicates the company is in good standing.

The company's profitability scored an 8 out of 10 rating. In addition to operating margin expansion, Amazon is supported by returns that outperform more than half of its competitors, a moderate Piotroski F-Score of 4, which indicates operations are stable, consistent earnings and revenue growth and a business predictability rank of 4.5 out of five stars. According to GuruFocus, companies with this rank typically see return an average of 10.6% per annum over a 10-year period.

Of the gurus invested in Amazon, Ken Fisher (Trades, Portfolio) has the largest stake with 0.35% of outstanding shares. Other top guru shareholders include Frank Sands (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Chase Coleman (Trades, Portfolio), Chris Davis (Trades, Portfolio), Warren Buffett (Trades, Portfolio), Steve Mandel (Trades, Portfolio) and Jim Simons (Trades, Portfolio)' Renaissance Technologies.

PayPal

The guru owns a 3.09 million-share stake in PayPal, which represents 1.76% of the equity portfolio. GuruFocus estimates Cohen has gained 5.31% on the investment since the second quarter of 2019.

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Headquartered in San Jose, California, the company, which operates an online payments system, has a market cap of $120.24 billion; its shares were trading around $103.66 on Friday with a price-earnings ratio of 49.52, a price-book ratio of 7.13 and a price-sales ratio of 6.85, which GuruFocus noted are at multiyear lows.

According to the Peter Lynch chart, the stock is overvalued.

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PayPal's financial strength was rated 6 out of 10 by GuruFocus. Although the company has issued approximately $4.7 billion in new long-term debt over the past three years, it is at a manageable level as a result of comfortable interest coverage. The Altman Z-Score of 3.03 also suggests the company is financially stable.

The company's profitability scored an 8 out of 10 rating, driven by operating margin expansion, strong returns that outperform a majority of industry peers and a high Piotroski F-Score of 7, which implies healthy business conditions.

With 0.37% of outstanding shares, Pioneer is the company's largest guru shareholder. Fisher, Mandel, Philippe Laffont (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Coleman, Segalas, Louis Moore Bacon (Trades, Portfolio), David Rolfe (Trades, Portfolio), Simons' firm and several other gurus are also invested in the stock.

Fidelity National

The investor's third-largest position is Fidelity National Information Services. He owns 2.07 million shares, which occupy 1.52% of the equity portfolio. GuruFocus says Cohen has gained an estimated 8.03% on the investment since the first quarter of 2019.

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The Jacksonville, Florida-based software company, which provides financial services technology and outsourcing services, has a $75.12 billion market cap; its shares were trading around $123.34 on Friday with a price-earnings ratio of 128.29, a price-book ratio of 1.53 and a price-sales ratio of 5.17.

Based on the Peter Lynch chart, the stock appears to be overvalued. Although the price-book ratio is near a five-year low, the GuruFocus valuation rank of 1 out of 10 also leans toward overvaluation.

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On the back of $6.8 billion in new long-term debt and poor interest coverage, GuruFocus rated Fidelity's financial strength 4 out of 10. The Altman Z-Score of 1.47 warns the company is in distress and could be at risk of going bankrupt. In addition, it may not be very capital efficient since its return on invested capital is below its weighted average cost of capital.

The company's profitability fared a bit better, scoring a 7 out of 10 rating. Although the operating margin is in decline, it outperforms more than half of its competitors. Fidelity is also supported by a moderate Piotroski F-Score of 6. As a result of a decline in revenue per share over the past three years, its 2.5-star business predictability rank is on watch. GuruFocus says companies with this rank typically return an average of 7.3% per year.

Daniel Loeb (Trades, Portfolio) is the company's largest shareholder with 0.41% of outstanding shares. Other top guru investors include Diamond Hill Capital (Trades, Portfolio), Ron Baron (Trades, Portfolio), Pioneer, Halvorsen, David Carlson (Trades, Portfolio), Larry Robbins (Trades, Portfolio), the MS Global Franchise Fund (Trades, Portfolio), Stanley Druckenmiller (Trades, Portfolio) and Bacon.

Alibaba

Cohen has a 1.2 million-share stake in Alibaba, which accounts for 1.36% of the equity portfolio. According to GuruFocus, he has gained roughly 15% on the investment since the first quarter of 2017.

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The Chinese e-commerce company has a market cap of $511.33 billion; its shares were trading around $192.89 on Friday with a price-earnings ratio of 21.53, a price-book ratio of 5.05 and a price-sales ratio of 7.53.

The Peter Lynch chart suggests the stock is overvalued even though the price-earnings ratio is near a one-year low.

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Alibaba's financial strength was rated 7 out of 10 by GuruFocus, driven by comfortable interest coverage and a robust Altman Z-Score of 6.66.

The company's profitability fared even better with a 9 out of 10 rating. While its margins are in decline, Alibaba is supported by strong returns that outperform a majority of industry peers, a high Piotroski F-Score of 7 and steady earnings and revenue growth. It also has a 2.5-star business predictability rank.

Of the many gurus invested in Alibaba, PRIMECAP has the largest stake with 0.56% of outstanding shares. Other guru shareholders include Fisher, Sands, Mandel, Pioneer, Segalas, Davis, Laffont, Coleman, Dodge & Cox and David Tepper (Trades, Portfolio).

NXP Semiconductors

The guru's fifth-largest holding is a 1.96 million-share stake in NXP Semiconductors, which is allocated to 1.32% of the equity portfolio. GuruFocus estimates Cohen has gained 7.4% on the investment since the third quarter of 2018.

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The semiconductor manufacturer, which is headquartered in the Netherlands, has a $24.9 billion market cap; its shares were trading around $88.99 on Friday with a price-earnings ratio of 104.7, a price-book ratio of 2.62 and a price-sales ratio of2.86, the latter two of which are near one-year lows.

According to the Peter Lynch chart, the stock is overvalued.

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Weighed down by debt and low interest coverage, GuruFocus rated NXP's financial strength 5 out of 10. The Altman Z-Score of 1.93 also warns that the company could be in danger of bankruptcy as its assets are building at a faster rate than revenue is growing. The WACC also outweighs the ROIC, which suggests the company is not capital efficient

The company's profitability fared better, scoring an 8 out of 10 rating. Even though NXP's returns underperform over half of its competitors, its operating margin is performing better than 56% of other companies in the semiconductor industry. It is also supported by a high Piotroski F-Score of 7 and consistent earnings and revenue growth. Regardless, the 3.5-star business predictability rank is on watch. GuruFocus says companies with this rank post an average return of 9.3% per year.

With 0.70% of outstanding shares, Cohen is the company's largest guru shareholder. Pioneer, Charles Brandes (Trades, Portfolio), Fisher, the T Rowe Price Equity Income Fund (Trades, Portfolio), Bacon, Simons' firm, Lee Ainslie (Trades, Portfolio) and several other gurus also have positions in the stock.

Portfolio composition

Cohen's other top holdings as of Dec. 31, 2019 were Dell Technologies Inc. (NYSE:DELL), JD.com Inc. (NASDAQ:JD), Microchip Technology Inc. (NASDAQ:MCHP), Salesforce.com Inc. (NYSE:CRM) and United Technologies Corp. (NYSE:UTX).

The guru's $19.02 billion equity portfolio, which was composed of 917 stocks at quarter's end, was most heavily invested in the technology sector, followed by smaller positions in the consumer cyclical, health care and financial services spaces.

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Disclosure: No positions.

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This article first appeared on GuruFocus.