Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Philippe Laffont’ Coatue Management Slashes Equity Portfolio by $1 Billion; Several Top Picks Scaled Back

Page 1 of 2

Coatue Management is a New York City-based hedge fund sponsor founded by Philippe Laffont in 1999. The firm focuses on tech stocks and, to a lesser extent, on consumer discretionary companies. Prior to Coatue, Mr. Laffont worked for Julian Robertson’s Tiger Management, after graduating with an M.S. in Computer Science from MIT.

A few weeks ago, Coatue filed its latest 13F, disclosing its long equity stakes as of the end of the second quarter. Its equity portfolio value fell by almost $1 billion, to $7.01 billion during the second quarter and in this article, we will take a closer look at some of the stakes the fund scaled back on over the April to June period.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

COATUE MANAGEMENT

Adobe Systems Incorporated (NASDAQ:ADBE)

– Shares held by Coatue as of June 30: 1.69 million

– Value of Coatue’s stake as of June 30: $162.55 million

Over the second quarter of 2016, Coatue trimmed its exposure to Adobe Systems Incorporated (NASDAQ:ADBE) by 56%, as the stock traded in the $90 to $100 territory. Also reducing its exposure to the software company was Gabriel Plotkin’s Melvin Capital Management, which disclosed ownership of around 500,000 shares following a 20% reduction in its stake over the period. Opposite was the case of Aaron Cowen’s Suvretta Capital Management, which boosted its participation by 6% to 1.96 million shares. Adobe Systems Incorporated (NASDAQ:ADBE)’s stock has managed to gain over 5% since the beginning of the year. Even though the stock is trading at roughly 56 times its trailing twelve-month earnings, it still looks cheaper than many of its software peers, which trade, on average, at around 77 times earnings. However, it is also trading at a price-to-sales ratio of almost 10x, nearly double compared to the average of its industry peers.

Follow Adobe Systems Inc (NASDAQ:ADBE)
Trade (NASDAQ:ADBE) Now!

Amazon.com, Inc. (NASDAQ:AMZN)

– Shares held by Coatue as of June 30: 308,134

– Value of Coatue’s stake as of June 30: $220.5 million

Amazon.com, Inc. (NASDAQ:AMZN) was another stock, in which Coatue cut its stake by 46% during the second quarter. The company remained the third most popular among the funds that we track, only trailing Facebook and Alphabet, with 145 funds holding shares of the eCommerce giant at the end of June, compared to 133 funds a quarter earlier. Other big supporters included Andreas Halvorsen’s Viking Global, which held 3.27 million shares at the end of June, following a 5% reduction in its exposure, and Ken Fisher’s Fisher Asset Management, which disclosed ownership of 1.98 million shares, down by 21% over the quarter. However, the decrease in hedge funds’ exposure to Amazon.com, Inc. (NASDAQ:AMZN) should not be interpreted as a bearish sign. Since the stock gained more than 19% over the second quarter, many of these sales could be simple profit taking. Moreover, since the period ended, the stock has managed to surge an extra 6.3%. On Tuesday, shares tumbled after the company announced it was offering Prime subscribers free access to the Audible digital audio service, and adding more “skills” to its Alexa system.

Follow Amazon Com Inc (NASDAQ:AMZN)
Trade (NASDAQ:AMZN) Now!

Page 1 of 2
Loading Comments...