Ralph Lauren, Gap, and More: Billionaire Stephen Mandel’s Favorite Retail Stocks

Page 1 of 2

LONE PINE CAPITALStephen Mandel founded Lone Pine Capital in 1997 after leaving legendary investor Julian Robertson’s Tiger Management. This makes Mandel one of the “Tiger Cub” hedge fund managers, and because his performance over the last 15 years has generally been good he has become a billionaire. When we reviewed the fund’s recent 13F (see the list of Mandel’s stock picks) we noticed a number of retail stocks in Lone Pine’s portfolio. Specifically, five of the twenty largest positions- each over $350 million at that time- were retailers. Here are Lone Pine’s five largest retail holdings by market value according to the 13F:

Lone Pine owned 4.3 million shares of Ralph Lauren Corp (NYSE:RL) at the end of the quarter. The stock is a bit expensive in value terms, trading at 21 times trailing earnings, and in its most recent quarter revenue and earnings were both down from a year earlier. Fellow Tiger Cub John Griffin’s Blue Ridge Capital increased its own stake in Ralph Lauren by 75% between July and September (check out Griffin’s favorite stocks). Analyst expectations are that earnings will improve in 2013, bringing the forward P/E multiple to 16, but we still think that we would avoid the stock.

Another retailer among Lone Pine’s top ten picks was The Gap Inc. (NYSE:GPS), with the fund still owning over 16 million shares despite being a seller during the quarter. Gap’s stock has had a great year, up 71% from this point in 2011, but because net income has also skyrocketed the earnings look fairly good: Gap carries trailing and forward P/Es of 15 and 12, respectively. We are a bit concerned that revenue growth has lagged- which suggests that earnings growth might not be sustainable- but the company only needs modestly higher numbers to justify its valuation. ESL Investments, managed by billionaire Eddie Lampert, also sold shares but Gap was still its third largest holding at over 19 million shares (find more of Lampert’s favorite stocks).

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

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

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

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!