Julian Robertson‘s Tiger Management has considerably increased the market value of its portfolio during the last quarter (nearly 35%). The fund initiated 16 new positions and increased its stake in another 25 companies, according to the latest 13F filing with the SEC. This puts the market value of the portfolio at $509.75 million, up from $377.26 million at the end of the third quarter. Noteworthy positions of the fund as of this filing include Alibaba Group Holding Ltd (NYSE:BABA) Amazon.com, Inc. (NASDAQ:AMZN) Netflix, Inc. (NASDAQ:NFLX) and Gilead Sciences, Inc. (NASDAQ:GILD).
Julian Robertson had quite a roller coaster ride during his stock picking years. After he founded one of the first hedge funds, Tiger Management in 1980, Robertson returned 31.7% per year after fees between 1980 and 1998, beating the S&P 500’s 12.7% annual return by a mile. The fund’s terrible performance in 1999 and 2000, owing partly to management’s failure to cash in on the boom in technology stocks at that time, and partly due to the plummeting stock price of US Airways Group Inc (LCC), made Robertson close down the fund.
The new face of Tiger Management makes investments in hedge funds that its former employees, called Tiger Cubs, have opened up over the years, as well as other hedge funds which are ready to give Robertson a stake in the company in return for managing part of his wealth. Tiger Management is primarily focused on funding start ups and also providing seed capital to emerging companies, especially in the technology sector. The fund’s investments in the technology sector constitute about 25.5% of its total portfolio value.
Alibaba Group Holding Ltd (NYSE:BABA) continues to be the largest holding in Tiger’s portfolio, accounting for about 11.65% of the fund’s invested component. However, the new position is a 53% decrease from that which was disclosed in the previous filing, and is now valued at $59.37 million. This must at least in a way provide some relief for the fund as the e-commerce giant is down nearly 15% from the start of this year.
The Chinese e-commerce juggernaut has met its worrisome fate on Wall Street after its third quarter earnings report showed a revenue miss. Alibaba posted $4.22 billion worth of revenue, which wasn’t close enough to the $4.45 billion figure that analysts had expected it to deliver. While slower Chinese growth is a factor opposing the company’s thus far lightning growth, an increase in active users and also better monetization opportunities from a growing base of mobile users will in all likelihood help Alibaba Group Holding Ltd (NYSE:BABA) post better figures in the future.
Among the new positions that Robertson has initiated, the most noteworthy is the stake in Amazon.com, Inc. (NASDAQ:AMZN). Tiger Management is betting on the stock to slide and has purchased 160,000 put options, which constitute about 9.74% of the portfolio value at $49.66 million, should the options be executed.
Amazon’s stock is up nearly 21% year-to-date in the wake of its fourth quarter earnings report in January that was viewed in a very positive light by investors. After all, it reported a 15% expansion of the company’s top line, and also an improvement in the company’s gross margin, which stood at 29.5% for the quarter. However, EBIDTA margin remained flat at 6.7%. This all resulted in Amazon reporting an EPS loss of $0.52 for the entire year. Considering the retardation in the company’s profitability, Robertson’s bet might pay off in the future, and may also be helped along by the government’s recent drone rules which have all but shot down Amazon’s hopes to deliver packages through those means in the near future.
Netflix, Inc. (NASDAQ:NFLX) is another stock that the fund initiated a position in last quarter. The stock is up a staggering 39% since the start of this year. Valued at $24.39 million, Tiger Management’s stake constitutes 4.78% of the fund’s portfolio value.
After a disappointing third quarter report, Netflix, Inc. (NASDAQ:NFLX) has come back strongly in the fourth quarter and international user growth is back on track. A big proponent of the stock is Carl Icahn of Icahn Capital LP, who has a significant stakes in the company amounting to $482.33 million according to his recent filing with the SEC.
Gilead Sciences, Inc. (NASDAQ:GILD) is another one of Robertson’s significant holdings. The fund increased its stake in the biopharmaceutical company by 20% and added another 90,000 shares. The position is now worth $50.33 million and forms 9.87% of the portfolio value. Shares of the company are up nearly 9.6% since the start of this year. The company’s hepatitis C treatments have gained considerable traction and also enabled it to beat the estimates in its fourth quarter earnings report.
