Google Inc (GOOG), Starbucks (SBUX): This Billionaire’s Big Selloffs

Page 1 of 2

CHILTON INVESTMENT COMPANYRichard Chilton started Chilton Investment Company in 1992 following stints at Merrill Lynch and Allen & Company. Chilton focuses on a value-oriented, fundamental research approach to equity selection. Chilton makes investment decisions based on a wider than normal long-term outlook. In reviewing his 13F filings, we found five stocks that Chilton was getting out of completely during the third quarter. It would appear that these stocks do not fit into Chilton’s long-term investment framework (check out Chilton’s newest picks).

Google Inc (NASDAQ:GOOG) has an issue with revenue diversification, and was a selloff for Chilton last quarter. The search giant is heavily reliant on search revenues. Google previously launched its very own mobile phone – the Nexus One – but soon after stopped selling it directly. Google does have promising opportunities, including YouTube and the digital wallet, but these remain a small part of the company’s top line.

Another headwind facing Google is the migration to mobile search. Although this is a fundamental shift that Google will not be able to ignore, it is cannibalistic to its PC-focused search business. With a P/E that is well above other tech peers at 22x, compared to Apple (11x) and Microsoft (14x), it could be Chilton sees better value and growth opportunities in Google’s competitors. Billionaire Ken Fisher – founder of Fisher Asset Management and Forbes columnist – is still one of Google’s top supporters (check out Fisher’s other picks).

Starbucks Corporation (NASDAQ:SBUX) has been performing well of late, with top line growth last quarter and margin expansion to boot. Revenues were up 11% last quarter on a year over year basis, and management boosted their outlook, and expected net store addition plans for next year. Up 15% year to date, Starbucks is trading at the high end of the industry at 30x earnings, though its historical average is closer to 25x. Still, this valuation leads us to be cautious, especially given continued weakness and poor sales in Europe. Billionaire Ken Griffin – founder of Citadel Investment Group – was one of Starbucks’ big investors last quarter (check out Griffin’s newest picks).

Beam Inc (NYSE:BEAM) saw its sales up 8% in 2011 and another 8% is expected by the end of 2012.  Beam has an impressive product portfolio with a range of brands, from stable names such as Jim Beam and Maker’s Mark to higher growth brands like Knob Creek and Effen Vodka. Beam trades at the high end of the industry on a P/E (27x) and P/S (3.9x) basis, being up 20% year to date. We see the industry as having positive prospects with a rise in consumer spending, but remain cautious that this stock’s valuation is high. Billionaire Bill Ackman is Beam’s largest fund shareholder with over 20 million shares (check out Ackman’s latest picks).

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 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

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

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How 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

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!