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 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

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!