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 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!