Apple Inc. (AAPL) Is Tiger Cub Philippe Laffont’s Top Stock

Philippe Laffont’s Coatue Management is considered one of the “Tiger Cub” hedge funds as Laffont worked for several years at legendary investor Julian Robertson’s Tiger Management. Coatue was founded in 1999 and our records show that the fund tends to be overweight technology and services stocks. We have gone through the fund’s 13F for the third quarter of 2012, which discloses many of its long equity positions as of the end of September. Read on for our quick take on Laffont’s top picks and compare them to previous filings.

COATUE MANAGEMENT

Coatue’s top pick was the most popular stock among hedge funds for the third quarter of 2012- Apple Inc. (NASDAQ:AAPL). See the full rankings of the most popular stocks. The fund reported a position of 1.4  million shares. We think that Coatue and the other funds in the industry have this one right as a recent pullback in Apple Inc. (NASDAQ:AAPL)’s stock price has left it trading at only 13 times trailing earnings. Analyst consensus is for strong growth over the next several years, giving Apple Inc. (NASDAQ:AAPL) plenty of room to underperform those expectations but still prove undervalued at the current price.

Equinix Inc (NASDAQ:EQIX) was another of Coatue’s top picks with the fund leaving its position of 4.2 million shares in the data center and connectivity services company unchanged over the course of the quarter. The growth company’s earnings were up 42% in the third quarter of 2012 from a year earlier, with both higher revenue and stronger margins contributing to improvement on the bottom line. However, an even better performance in the stock market has left the stock’s forward P/E multiple higher than 50. High growth would have to consider for a substantial period of time to make it a good value.

Laffont and his team increased their stake in Internet, TV, and phone company Virgin Media Inc. (NASDAQ:VMED) by 10% to a total of 16.1 million shares. This puts it in stark opposition to a number of short sellers, as the most recent data shows that 17% of Virgin Media’s shares outstanding are held short. With revenue only up slightly over the last year, according to the most recent 10-Q, we’d be wary of getting long the stock.

Coatue also bought shares of Liberty Global Inc. (NASDAQ:LBTYA), reporting a position of 6.5 million shares at the end of September. Liberty Global is another Internet, TV, and phone stock and it is focused on Europe (compare this with Virgin Media, which is primarily a British company). It’s not as popular a short seller target that Virgin is, even though the stock trades at quite high multiples in relation to its trailing and forward earnings and its sales growth has been mediocre. It too looks like a stock to avoid rather than take a position on.

Priceline.com Inc (NASDAQ:PCLN) rounded out Coatue’s top five picks on the long side. Priceline- which recently bought Kayak to even further cement its market leadership in the travel website space- now has a market cap of about $31 billion, which places it at 24 times trailing earnings. As such it’s another stock priced for growth, though its earnings growth rate has been quite high. Wall Street analysts expect growth in net income to continue, resulting in a forward P/E multiple of 17 and a five-year PEG ratio of 1. It’s not as clear a buy to us as Apple is, and there’s some concern that the acquisition of Kayak will destroy shareholder value, but we’d still consider it a “growth at a reasonable price” stock at this time. Our database of 13F filings shows that top holders of Priceline are essentially a who’s who of Tiger Cubs, with billionaire Stephen Mandel’s Lone Pine Capital having the largest position at 1.4 million shares (see more stock picks from Lone Pine Capital).

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!