Billionaire Julian Robertson’s 5 Favorite Mid Cap Stocks

TIGER MANAGEMENTLegendary investor Julian Robertson of Tiger Management retired some time ago, but his enormous success running the fund- not to mention his ability to produce several successful “Tiger Cub” managers to carry on his legacy- makes him a good investor to follow. We have already processed Robertson’s 13F filing for the third quarter, a document which discloses many of his long equity positions as of the end of September (see our list of Robertson’s holdings and read our analysis of his activity during the quarter). One of the reasons why it’s good to follow top investors like Robertson is because they not only invest in big names but also have positions in smaller, often lesser-known companies and so can essentially serve as a screen of this broader universe of stocks. Here are Robertson’s five largest holdings with market capitalizations between $2 billion and $10 billion:

Robertson increased his stake in Ocwen Financial Corporation (NYSE:OCN) by 68% to a total of about 760,000 shares. The mortgage loan servicing company’s stock price has more than doubled in the last year, and it’s interesting to see Robertson adding shares. Revenue in the third quarter was almost twice what it was in the third quarter of 2011, and earnings grew about 150%. At 37 times trailing earnings- but only 8 times forward earnings estimates- Wall Street analysts expect very high growth next year as well. We’d be a little hesitant to depend that much on continued growth.

A position of about 250,000 shares was initiated in Charter Communications, Inc. (NASDAQ:CHTR), a cable, Internet, and phone provider. Charter is expected to report a loss for the current fiscal year, but then turn profitable in 2013 (though the implied forward earnings multiple is greater than 100). Revenue growth has been very limited. As a result we think that we’d pass when it comes to this recommendation.

Verisign, Inc. (NASDAQ:VRSN) was another of Robertson’s favorite mid-cap stocks with a position of about 320,000 shares. Verisign is best known for providing Internet registry services for .com domain names. It carries a trailing P/E multiple of 25, which seems high, but at least has been delivering strong growth with net income up 32% last quarter from its level a year ago. Billionaire- and Tiger Cub- Stephen Mandel initiated a position of 9.4 million shares during the second quarter (find more of Stephen Mandel’s stock picks). It could be a “growth at a reasonable price” stock, but we’d have to see strong evidence that it can continue growing the bottom line.

Robertson kept his holdings of Cablevision Systems Corporation (NYSE:CVC), which is primarily another cable/Internet/phone company but also owns several media properties, constant at about 550,000 shares. Cablevision is highly levered, and as at Charter the company has not seen much revenue growth. Its trailing P/E is 21, and so to be considered a good value it would need to see at least moderate earnings growth over the next several years. We wouldn’t buy it on a value basis, though we’d note the dividend yield is above 4% for any interested income investors.

Tripadvisor Inc (NASDAQ:TRIP) was another new stock in Robertson’s portfolio- his Tiger Cubs, we’ve noted, have been bullish on travel related websites for some time. The most recent data shows that 17% of Tripadvisor’s outstanding shares are held short, so the billionaire is going against a number of traders here. The travel reviews site reported earnings growth of 9% last quarter versus a year earlier, as revenue was up by about twice as much but margins fell. Its earnings multiples are high- in the 20s- so it’s not a screaming buy. In fact, we think that it would probably be better to own the bigger players in the industry (such as Priceline).

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 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

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

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

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How 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

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!