On Tuesday Feb
. 25th, Chase Coleman and Feroz Dewan’s Tiger Global Management Llc
reported a substantial decrease in its position at TAL Education Group (ADR) (NYSE:XRS).
Over the past 15 days, the fund sold 2 million shares of the company for prices ranging from $23.99 per share to $24.99 per share. After the reported transactions, the fund holds 2.95 million class A shares, compared to 4.95 million, before these moves. Tiger's activist stake amasses 4.3% of TAL Education's Class A stock.
Through its latest move, Tiger Global reduced its position on
TAL Education Group (ADR) (NYSE:
XRS) -a Chinese K-12 after-school tutoring service provider with a market cap slightly under $2 billion- by more than 40%. However, the sale should not be seen as a bearish signal from the fund, but rather like an attractive opportunity to make some profit. The company's stock has jumped by about 175% over the past year, on the back of industry leading fundamentals and a cheap valuation. Moreover, trading at 40 times the company´s earnings, this stock might look slightly overvalued, but it is, in fact, cheap compared to the industry average of 103x P/E.
Finally, I would like to highlight that, despite the recent activity, Tiger Global continues to be the largest hedge-fund shareholder at TAL Education Group
XRS). Nonetheless, other major funds, including Robert Karr
’s Joho Capital, Christopher Lyle
’s Scge Management and Jim Simons
’ Renaissance Technologies, also hold millionaire stakes in the company. In fact, these last two funds last declared having upped their bets on TAL Education Group (ADR) (NYSE:
Tiger Global Management is a fundamentally-oriented services-focused hedge fund with assets under management of approximately $8 billion. It tends to seek for ten-year investment opportunities, mainly in the global Internet and technology sectors. Managed by Chase Coleman and Feroz Dewan, two “youngsters,” it has returned 71% after fees in 2007. In fact, by the end of 2007 Tiger Global's annualized return since inception was around 44%. Although 2008 and 2009 were tough years, Chase Coleman and his team are back on track, having returned 45% in 2011, 23% in 2012, and 14% in 2013.
A few days ago, we analyzed Tiger Global’s main holdings
and latest moves. The fund had already reduced its stakes in two of its major holdings: Motorola Solutions Inc
and Groupon Inc (NASDAQ:GRPN
). It diminished its bets by 20% and 36%, respectively. On the opposite, it had reported increasing its participation in Priceline.com Inc (NASDAQ:PCLN
), Twenty-First Century Fox Inc (NASDAQ:FOXA
) and Dollar General Corp. (NYSE:DG
Disclosure: Javier Hasse holds no position in any stocks mentioned
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