Coatue Management was founded in 1999 by Philippe Laffont, a former understudy of Julian Robertson at Tiger Management. The fund invests mainly in public and private equities from the technology sectors and boasts returns of 443% between 2001 and March 2016. According to regulatory filings, the fund’s equity portfolio carried a market value of $8.15 billion at the end of the third quarter, with 61% of that value being invested in tech stocks and 30% in consumer discretionary stocks.
At Insider Monkey, we estimate a fund manager’s stock picking ability by measuring the performance of a fund’s investments in companies with a market cap in excess of $1 billion. According to this metric, Coatue Management’s stock picks generated an 11.76% return during the third quarter from 52 positions that qualify under those guidelines. In this article we’ll take a close look at four of the fund’s top bets heading into the fourth quarter: Activision Blizzard, Inc. (NASDAQ:ATVI), Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX), and Alphabet Inc (NASDAQ:GOOG).
Activision Blizzard, Inc. (NASDAQ:ATVI) was Coatue Management’s top equity position at the end of the second quarter but, come the end of September, the fund’s management decided to lock in some profits, reducing their position by 16% to 11.6 million shares. According to the fund’s latest 13F filing, this position was worth $513 million at the end of September. Over the course of the third quarter, Activision Blizzard, Inc. (NASDAQ:ATVI) registered an 11.8% advance.
The stock was in the portfolios of 68 hedge funds at the end of the second quarter of 2016, up from 52 hedge funds registered at the end of the previous quarter. The largest stake in Activision Blizzard, Inc. (NASDAQ:ATVI) among them was held by OZ Management, which reported holding $562.4 million worth of stock as of the end of June, with Coatue Management holding the second-most valuable position. Other investors bullish on the company included Egerton Capital Limited, Lone Pine Capital, and Citadel Investment Group.
Coatue Management’s new top dog is Facebook Inc (NASDAQ:FB). During the third quarter, Philippe Laffont and his team boosted their investment in the company by 48% to 6.29 million shares worth some $806.5 million. During the third quarter, Facebook Inc (NASDAQ:FB) registered a positive return of 12.2%.
At the end of the second quarter, Facebook was the second-most popular stock among the funds followed by Insider Monkey. 148 of those hedge funds reported a long position in it as of the end of June, down by 10% from the previous quarter. The largest of those 148 stakes in Facebook Inc (NASDAQ:FB) was held by Viking Global, which reported holding $2.3 billion worth of stock as of June 30. It was followed by Lone Pine Capital with a $1.25 billion position. Other investors bullish on the company included Arrowstreet Capital, Egerton Capital Limited, and Lansdowne Partners.
We’ll check out two more of the fund’s stock picks on the next page.