Cognizant Technology Solutions Corp (CTSH), Mead Johnson Nutrition CO (MJN): Billionaire Stephen Mandel Likes These Bulls

Page 1 of 2

Earlier in August, billionaire and Tiger Cub Stephen Mandel’s Lone Pine Capital filed its 13F for the second quarter of 2013 with the SEC, disclosing many of its long equity positions as of the end of June. While the primary reason why we track 13F filings is as part of our work developing investment strategies- for example, the most popular small cap stocks among hedge funds tend to outperform the S&P 500 by 18 percentage points per year, with a model portfolio following this strategy beating the market by 33 percentage points in the last 11 months (learn more about our small cap strategy)- they’re also useful as a source of investment ideas.

For example, we also track insider purchasing activity having noticed that there tends to be a small outperformance effect for stocks bought by insiders (read our analysis of studies on insider trading). Using these databases we can look for stocks which Lone Pine owned according to its most recent filing and which at least one insider has purchased in the last three months. Here are four of the fund’s holdings satisfying this criteria (or see the full list of Mandel’s picks over time):

LONE PINE CAPITALOne of Lone Pine’s top picks was Cognizant Technology Solutions Corp (NASDAQ:CTSH), an IT consulting and outsourcing company; one of the company’s Board members was buying the stock in June. The company’s revenue and earnings each rose close to 20% last quarter compared to the second quarter of 2012. The trailing P/E is 19, but certainly if Cognizant can continue these decent numbers it may prove a good “growth at a reasonable price” stock. Maverick Capital, managed by fellow Tiger Cub Lee Ainslie, increased its stake in the company to a total of 7.4 million shares during Q2 (check out more stocks Ainslie has been buying).

Mandel and his team reported a position of 7.4 million shares in Mead Johnson Nutrition CO (NYSE:MJN), which provides infant formula and other children’s nutrition products. Investors have bid up the stock price to 26 times trailing earnings on speculation that China will relax its one-child policy (China is a critical market for the company). In addition, food companies generally trade at high multiples in the current environment. Renaissance Technologies, founded by billionaire Jim Simons, trimmed its holdings but still owned 1.3 million shares according to its own 13F (find Renaissance’s favorite stocks).

Page 1 of 2
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 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!