Apple Inc (AAPL) is Among Billionaire Mandel’s and Andreas Halvorsen’s Favorite Stocks

LONE PINE CAPITALApple Inc (NASDAQ:AAPL), Priceline.com Inc (NASDAQ:PCLN), and Visa Inc (NYSE:V) are among billionaire Stephen Mandel’s and Andreas Halvorsen’s favorite stocks. Two of the most successful Tiger Cubs are Andreas Halvorsen of Viking Global and Stephen Mandel of Lone Pine Capital. Viking Global, between 2005 and 2010, returned a remarkable 119%; Lone Pine manages about $17 billion, and Mandel has become a billionaire based on the strength of his investment prowess (read more about Mandel and Halvorsen). Both hedge funds released their 13F filings for the second quarter of 2012 earlier this month and we thought it might be interesting to look through the filings and pick out some stocks that both funds thought were good buys. We identified three stocks that were in both funds’ top holdings:

Viking Global’s top stock pick for the second quarter was the same as the third largest position that Lone Pine owned: Priceline.com Inc (NASDAQ:PCLN). The online travel company has offered excellent growth: it is up 21% this year, it has nearly doubled from its level two years ago, and it is up an impressive 620% from five years ago. Past performance is no guarantee of future returns, but we can see why both Halvorsen and Mandel think that this appreciation in share price is likely to continue. In its most recent quarter earnings rose 37% compared to the same period in 2011, roughly half of which was driven by revenue (up 20%) and the rest by higher margins. The trailing P/E is 24, which is not high enough to cover the earnings expectations generated by Wall Street analysts: their projections imply a forward earnings multiple of 16 and a five-year PEG of 0.9. Both funds increased their Priceline holdings in the second quarter: Viking Global by 69% and Lone Pine by 4%. Billionaires Chase Coleman and Ken Fisher are also among fund managers with large Priceline.com Inc (NASDAQ:PCLN) positions (see Ken Fisher’s new stock picks).

Viking and Lone Pine also increased their holdings of Apple Inc (NASDAQ:AAPL), and the stock now occupies the #5 and #1 spots in each fund’s portfolio, respectively, according to their 13Fs. In this case Lone Pine increased its position by 13% while Viking Global, which had previously only had a moderate position in the stock relative to the fund’s size, brought its position up to about 980,000 shares. On a quantitative basis Apple Inc (NASDAQ:AAPL) is a great stock: it trades at a trailing P/E of 16 and has been growing its revenue and earnings at a strong clip. Given analyst expectations, the forward P/E is 13. It also has a strong market position and a dedicated fan base. The only question is whether or not such a large company can continue to deliver similar growth rates even as competition on smartphones and tablets intensifies. Apple topped our list of the ten most popular stocks among hedge funds in the second quarter of 2012. Billionaire David Einhorn is also very bullish about Apple Inc (NASDAQ:AAPL) which is the top stock in Greenlight Capital’s portfolio (see David Einhorn’s top picks).

Both funds had large positions in Visa (NYSE:V), though there was a divergence in the movements each manager made in the stock. Visa fell out of Lone Pine’s top ten holdings due to selling, though the fund still owned 3.3 million shares; Viking Global, as it did with Apple, added heavily to a previously moderate position in Visa and now the credit card issuer is that fund’s third largest stock holding at 4.9 million shares. Fellow credit card company Mastercard (NYSE:MA) is another top Viking holding. This suggests that Halvorsen and his team are getting particularly bullish on credit card companies, as mentor Julian Robertson recommended last fall. Visa trades at a forward P/E of 18 and a five-year PEG of 1.1, so even with its 61% rally over the last year sell-side analysts think the stock could have further to rise. Visa also expresses a (perhaps surprisingly) moderate relationship with the overall market at a beta of 0.8; as Robertson explains, the credit card issuers do not bear much credit risk. Warren Buffett’s Berkshire has a position in Visa as well but it was reduced by 27% over the second quarter (see Warren Buffett’s new bullish bets).

All three of these consensus picks by two of the top Tiger Cubs are growth machines. Between the three, we like Priceline.com Inc (NASDAQ:PCLN) the best: it has very high growth and doesn’t have as many big names lining up to compete with it as Apple Inc (NASDAQ:AAPL) does. The multiples are fairly low considering the growth rate and we’re further encouraged by the strong positions both funds are taking in the stock.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations 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!