Apple Inc (NASDAQ:AAPL), Visa (NYSE:V), Priceline (NASDAQ:PCLN), and Yandex (NASDAQ:YNDX) are billionaire Chase Coleman's and Rob Citrone's favorite stocks. Tiger Global Management and Discovery Capital Management are both run by alumni of Julian Robertson's Tiger Management. Chase Coleman and Rob Citrone, along with their respective teams, each hold 13F positions valued in the mid billions and invest heavily in technology and services (see past activity at Discovery and Tiger Global). We went through each fund’s 13F filings and here are some stocks which both Tiger Global and Discovery owned at the end of the second quarter:
Both funds had the same largest holding: Apple Inc (NASDAQ:AAPL). Tiger Global increased its position 14% to 1.4 million shares, while Discovery’s addition of shares brought it close to 2 million. We imagine that both funds have profited handsomely from their Apple stakes, and despite the company’s massive size it still looks like a good value on a quantitative basis. It trades at 15 times forward earnings despite excellent growth opportunities, and only 13 times forward earnings estimates. Apple Inc (NASDAQ:AAPL) also has billions in cash on its balance sheet that it can use to augment its growth or increase its dividend.
Another stock which was in the top ten of each fund’s holdings according to their respective 13Fs was credit card issuer Visa (NYSE:V). Discovery owned 1.8 million shares of the stock and Tiger Global owned 3 million. Visa stock has also had a good year, up 24%, as Robertson’s prediction from last fall that credit card stocks would do well has proven correct. Sell-side analysts believe that at least in Visa’s case there is more growth to come, with the company carrying a forward P/E of 18 and a five-year PEG ratio of 1.1. With a beta of 0.8, the stock is also not particularly sensitive to fluctuations in the broader market.
Priceline (NASDAQ:PCLN) was another top stock pick from both funds. Discovery upped its stake 32% to about 130,000 shares, and Tiger Global reported a position of about 870,000 shares in its portfolio. Priceline is another growth stock, increasing its revenue 20% and its earnings 37% in its most recent quarter compared to the same period a year ago. Yet it trades at the relatively low value of 24 times trailing earnings, which assuming the same growth trajectory as Wall Street analysts gives it a forward P/E of 16 and a five-year PEG ratio of 0.9.
Tiger Global has had Yandex (NASDAQ:YNDX), a $7 billion market cap search engine focused on Russian operations, for some time. It cut its position this quarter but still owned 32 million shares at the end of June. Discovery seems to have agreed that Yandex is a buy, more than tripling its own position in the stock to 3.2 million shares. The stock is down 28% from a year ago, and Russia might not be the best country for an investor to hitch a wagon to, but the business reported a 50% increase in revenue and a 76% increase in earnings in its last quarter compared to a year ago. The company trades at 19 times its estimated earnings for 2013 and a five-year PEG ratio of 0.7.
We’re wary of Yandex but based on the financials it could be a good growth find, and given the interest from two top hedge fund managers we will look at it in more depth and would advise investors to do the same. Visa has been a popular pick but we think it has gotten a bit pricy, and that other credit card companies might be better values at this point. As far as Priceline goes, we generally prefer value investments but note that the company can underperform Street growth targets and still prove undervalued- and, again, we would note the large positions from both of these investors and their teams. Apple Inc (NASDAQ:AAPL)’s incredible growth may slow, but it is nearly in value stock territory as it is and we can see why these funds both have Apple Inc at the top of their portfolios.