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Philippe Laffont’s Top Tech Stocks: Apple Inc. (AAPL), Avago Technologies Ltd (AVGO), Netflix Inc. (NFLX), Facebook Inc (FB)

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Coatue Management, managed by Philippe Laffont, filed its latest 13F with the U.S. Securities and Exchange Commission recently, disclosing its public equity portfolio as of the filing’s reporting period of March 31. New York City-based Coatue Management is a technology-focused hedge fund that was founded by Laffont in 1999. Prior to Coatue, Mr. Laffont worked for Julian Robertson’s Tiger Management after graduating with an M.S. in Computer Science from MIT. According to the 13F filing, the fund’s public equity portfolio, comprised of more than 50% of tech stocks, is valued at more than $10.50 billion. In this piece, we will take a look at Coatue’s top tech stocks, which include Apple Inc. (NASDAQ:AAPL), Avago Technologies Ltd (NASDAQ:AVGO), Netflix Inc. (NASDAQ:NFLX), Facebook Inc (NASDAQ:FB), and Baidu Inc (ADR) (NASDAQ:BIDU).


We track hedge funds to determine their top small-cap stock picks, which according to our research, have historically managed to generate alpha even though the filings are delayed up to a maximum of 45 days. As part of our backtesting, we used a 60-day delay to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds still outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have been sharing and tracking the performance of these top small-cap stocks since the end of August 2012 and they have returned 144% over the last 32 months, outperforming the S&P 500 ETF by over 84 percentage points (see more details here).

Apple Inc. (NASDAQ:AAPL) remained the top holding of Mr. Laffont, though he sold off some of his position during the first quarter. The investor held 7.69 million shares worth $956.6 million of the iPhone maker as of the end of March, a decrease from the 8.89 million shares the fund held as of the previous reporting period. Apple Inc. (NASDAQ:AAPL) has lost its position both as the most popular tech stock among billionaires and the most popular stock overall among hedge funds we track.  During the first quarter of 2015, the total number of billionaires holding shares in the most-valuable company in the world fell to 16 from 19. Among those billionaire shareholders is Carl Icahn, whose Icahn Capital holds 52.76 million shares of the company. Icahn recently issued an open letter to Apple Inc. (NASDAQ:AAPL)’s CEO Tim Cook to express his beliefs that the company’s shares are undervalued and stated a price target of $240 per share. According to the legendary investor, Apple will post a $12.00 diluted EPS by the end of 2016, and 30% diluted EPS growth in 2017. The company’s stock rose by 48.5% during the past year. Ken Fisher’s Fisher Asset Management also holds 10.81 million shares as of the end of March.

Next up is Avago Technologies Ltd (NASDAQ:AVGO), a $37.99-billion market cap semiconductor device supplier. Laffont’s Coatue cut its position in the company to 6.94 million shares from 8.53 million shares held at the end of 2014, the current position being valued at $881.01 million. On Thursday, Avago Technologies Ltd (NASDAQ:AVGO) announced that it agreed to acquire Broadcom Corporation (NASDAQ:BRCM) for $37 billion in cash and stock. The deal is expected to be closed by the end of the first quarter of 2016. For the second quarter of fiscal year 2015, Avago Technologies Ltd (NASDAQ:AVGO) reported net income of $344 million, or $1.21 per share, up from $158 million, or $0.61 per share, in the same quarter of fiscal year 2014. The company pays a quarterly dividend of $0.38, a yield of 1.03%. During the past calendar year, Avago Technologies Ltd (NASDAQ:AVGO)’s stock gained an impressive 109.88%, compared to the industry average of 30.38%. Other investors that see value in the stock include Daniel S. Och’s OZ Management, which holds 2.46 million shares.

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