Apple Inc, Google and eBay Are Among Billionaire Stephen Mandel’s Top Stock Picks

Apple Inc. (NASDAQ:AAPL) is still billionaire Stephen Mandel’s top stock pick. Stephen Mandel founded Lone Pine Capital in 1997 and has successfully grown the fund from a humble $8 million to today’s mega fund with $20 billion in assets under management.  It’s evident that Mandel remains confident in his hedge fund’s portfolio—nine out of the funds top ten holdings increased quarter-over-quarter. Nine out of the funds top ten holdings, including among others Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), The Gap Inc. (NYSE:GPS), Monsanto Company (NYSE:MON), Priceline.com Inc (NASDAQ:PCLN), and newly purchased eBay Inc (NASDAQ:EBAY), account for 40.54% of the portfolio’s value. Relative to the S&P, the portfolio is over weighted in the services sector and under weighted in the non-discretionary, energy, and financial sectors.

LONE PINE CAPITAL

It may be too early for Mandel and various other Tiger “cubs,” whose hedge funds were seeded by billionaire Julian Robertson, to book a profit on what they believed was a soaring growth stock for 2012. Most believe that Lone Pine’s success stems from Mandel’s philosophy of “bottom-up” investing that dismisses macroeconomic effects, and views the fundamentals of a business with a magnifying glass. Sound companies with exposure in European countries, like Priceline.com Inc, seem to fit Mandel’s bill. While many would prefer an elective root canal over just the thought of investing in consumer discretionary stocks with exposure in Europe, Mandel continues to reinvest in stocks like Priceline.

Many investors headed for the hills and sold their shares of Priceline (NASDAQ:PCLN) when the online travel agent witnessed deceleration in booking volume and revenue growth in the second quarter. After Priceline’s 2Q were released, shares plummeted $117.50 to $562.32. Sticking to his investing strategy, Mandel didn’t sell a single PCLN share, instead he wagered another $26.56 million and purchased 47,100 shares.  The deceleration in PCLN’s revenue and booking volume stemmed mainly from heavy exposure in European economies amid a deepening recession. Gross bookings were still within management’s low end of guidance and grew a 26.8% year-over-year; this marked a drastic slowdown from 69% in the prior year’s quarter. Revenues grew 20.3% to $1.3 billion, down from 43.7% in the same quarter last year.  Questions remain surrounding Europe’s outlook, but instead of beating himself up over questions only time will tell, Mandel is most likely focusing on stock fundamentals. Priceline still improved their year-over-year operating profits and EBITDA by solid 41% and 42%.

Lone Pine liquidated its casino exposure by liquidating both casino companies Wynn (NASDAQ:WYNN) and Las Vegas Sands Corp (NYSE:LVS). Mandel had $314 million interest in LSV and $69 million interest in WYNN, a total of 2.25% of his portfolio. Both casinos fundamentals are weakening in China, Singapore, and the Las Vegas gaming markets. About 85 percent of LSV’s gaming revenue is derived from the wealthy “whale” gamblers in China. These high rollers mimicked the country’s economic slowdown. The economic slowdown and allegations of LVS illegally attempting to accelerate apartment sales in China were enough to make Long Pine Capital tap out of this company.

In Lone Pine’s 13F filed for the period through June 30, eBay Inc was the largest addition to the portfolio, equal to $584 million, or 3.68 percent of the portfolio. The online auction service has one of the most efficient capital models in e-commerce and has developed a sustainable competitive advantage by having two segments that are both gaining market share. The leading auction business has seen fluctuating growth in recent years caused by an uncertain future for the world economy, but PayPal, an online payment system, has consistently grown and now boasts more accounts than Discover and American Express, though it is facing increasing competition from Google Wallet and Apple’s upcoming service for iOS6.

Mandel tends to move his portfolio around frequently. In 2006 he had 3 million Apple Inc. (NASDAQ:AAPL) shares with a market value of $255 million. Between April and June of 2007, he sold 1.5 million shares leaving $105 million in market value in his portfolio. When shares reached $150 he sold another quarter million shares and only had 1.25 million shares remaining. Shares continued to rise, reaching $200 and Mandel then sold another 600,000 shares. When shares dropped in 2008, Mandel surprised many by adding roughly 2.3 million shares to his portfolio. Mandel continued to adjust the amount of shares he kept in his portfolio. The 13F just released shows that Mandel owns just over 1.4 million shares of Apple Inc. (NASDAQ:AAPL), comprising of 5.24% of his portfolio. This is his largest single holding.

Mandel has a unique style of investing that involves heavy fundamental analysis, blindness to macro-events, and constant maneuvering of his holdings. This mythology has worked wonders for Lone Pine and often can help his followers view stocks in a perspective that is commonly overlook.

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

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!