Facebook Inc (FB), Capital One Financial Corp. (COF): Here’s What This Huge Long-Term Winner Is Buying

Page 1 of 2

LONE PINE CAPITALEvery quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today, let’s look at Lone Pine Capital, founded by Steve Mandel in 1997. Prior to that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies, and reportedly beat the S&P 500 for 11 years in a row. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued ones.

The company’s reportable stock portfolio totaled $15.9 billion in value as of Dec. 31, 2012.

Interesting developments
So what does Lone Pine Capital’s latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Facebook Inc (NASDAQ:FB) and Capital One Financial Corp. (NYSE:COF). Other new holdings of interest include Intuitive Surgical, Inc. (NASDAQ:ISRG). Facebook Inc (NASDAQ:FB) is compelling to many, with its hundreds of millions of users and its top ranking in mobile app reach. But it’s not without risks, such as a seemingly rich valuation and concerns about the influential younger generation gravitating toward other social platforms. In addition, a new study casts doubt on the efficacy of social-media advertising.

Shares of Intuitive Surgical hit a 52-week low recently, partly on reports that robotic surgeries may not be as worthwhile as many think and news of an investigation into its systems’ safety. But with a recent P/E ratio of about 30, a forward P/E of 21, and an expected near-term growth rate of 18% (following an average growth rate of 34% over the past five years), many see it as attractively priced now.

Among holdings in which Lone Pine Capital increased its stake was Priceline.com Inc (NASDAQ:PCLN). Priceline has been experiencing strong growth internationally, and its financial statements offer lots to love, such as its steep and growing free cash flow and net margins near 27%. Its forward P/E ratio of just 15 is attractive, too, considering its sizable growth rate. The company has made a $1.8 billion offer for Kayak Software Corp (NASDAQ:KYAK), and its hotel-booking business has been a very strong performer.

Lone Pine Capital reduced its stake in lots of companies, including Accretive Health, Inc. (NYSE:AH), which has fallen by more than 57% over the past year, in part due to news that it’s delaying releasing its fourth-quarter and year-end earnings reports as it reevaluates its accounting habits. The company specializes in revenue cycle management services for the health-care industry. Right now, it’s heavily shorted, reflecting market skepticism about it.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 44 percentage points in 21 months Learn how!

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!