High-ranking investment managers often show similar interest in stock investments with common positions in multiple companies. This is especially common among the Tiger cubs who worked together in the past and continue to share their best ideas with each other. When we took at a look at the stock picks of billionaire Lee Ainslie our algorithms indicated that there is a huge overlap between his picks and the picks of Stephen Mandel’s Lone Pine Capital. In our analysis, we discovered 19 common positions among these investment managers with big names such as Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Facebook Inc (NASDAQ:FB). In addition to these stocks, Priceline Group Inc (NASDAQ:PCLN), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Baidu Inc (ADR) (NASDAQ:BIDU), and Adobe Systems Incorporated (NASDAQ:ADBE) are some more common investments of these fund managers that we are going to discuss in this post.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 144% and beating the market by more than 84 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
Let’s start with Facebook Inc. (NASDAQ:FB) even though there are other bigger positions. Facebook is the third most popular stock among hedge funds and recently saw its price target lifted to $120 by Gene Munster. What is interesting about Facebook is that there are several other Tiger cubs with very large positions in the stock. Mandel is the biggest holder of the stock among the funds we track, followed by another Tiger cun Philippe Laffont. Billionaire John Griffin, John Thaler, Rob Citrone, and Roberto Mignone are among other Tiger cubs with Facebook positions. Julian Robertson doesn’t manage a huge portfolio any more but he still manages a small one. He allocated 4.4% of his 13F to Facebook as well. Overall, our hedge fund sentiment indicator tells us that Facebook is a buy.
Priceline Group Inc (NASDAQ:PCLN) is the largest stock investment of Maverick Capital, which owns 355,951 shares valued at $414.38 million. The online travel company comes at number two in the equity portfolio of Lone Pine Capital with 1.33 million shares valued at $1.55 billion. Priceline Group Inc (NASDAQ:PCLN) has been on an acquisition spree during the last one year with as many as 5 deals including major deals such as OpenTable Inc. for $2.6 billion and investing $500 million in Ctrip, Chinese hospitality service company. The online travel organizer is gearing up to compete with other players including Google Inc (NASDAQ:GOOGL) and Expedia Inc (NASDAQ:EXPE). Ken Griffin’s Citadel Investment Group and Eric W. Mandelblatt’s Soroban Capital Partners hold large positions in Priceline Group Inc (NASDAQ:PCLN).
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Valeant Pharmaceuticals Intl Inc (NYSE:VRX) comes next in the list of common stock picks of Lee Ainslie and Stephen Mandel. Lone Pine Capital has shown eminent interest in the pharmaceutical company with 5.57 million shares valued at $1.11 billion. The current position of Maverick Capital in Valeant Pharmaceuticals Intl Inc (NYSE:VRX) includes 1.26 million shares with market value of $253.41 million. The shares of the medical device manufacturer have skyrocketed in 2015 with year-to-date growth of 62.22%. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is trying to increase its market presence in emerging markets with a proposed acquisition of Egyptian pharmaceutical firm Amoun Pharmaceutical Co. Prior to Amoun, the Canadian drug-maker acquired Salix Pharmaceuticals Ltd. for $1.1 billion and it is continuously looking for potential acquisition targets. Bill Ackman’s Pershing Square and Valueact Capital are among the primary stockholders of the Canadian pharmaceutical company.
