Why Tiger Global Traded Groupon Inc (GRPN) For Priceline.com Inc (PCLN)

Tiger Global, whose co-founders and managers include billionaire and Tiger Cub Chase Coleman, recently filed its 13F for the second quarter of 2013. We have been going through these 13Fs for a variety of purposes. First, we’ve found that it’s possible to use these filings to develop profitable investment strategies: the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy) and our own portfolio based on this finding outperformed the S&P 500 by 33 percentage points in the last 11 months. It can also be useful to look at filings from individual managers to see what they are trading and if any of their investment ideas seem interesting. Read on for our thoughts on some trades we noticed in Tiger Global’s 13F for the end of June or see a history of the fund’s stock picks.

Liking the News Corp breakup. At the end of June, Tiger Global’s new top pick was News Corp (NASDAQ:NWSA); the media and entertainment company has since split into “New” News Corp (NASDAQ:NWSA) and Twenty-First Century Fox Inc (NASDAQ:FOXA). Many hedge funds like to invest in spinout opportunities because management becomes better able to focus on core operations (learn more about investing in spinouts) and some market watchers had applied a similar logic to the breakup of News Corp (NASDAQ:NWSA). Currently Twenty-First Century Fox Inc (NASDAQ:FOXA), which focuses on the production of news and entertainment content as well as filmed entertainment (News Corp retains ownership of publishing assets, including the Wall Street Journal and New York Post) is valued at 16 times forward earnings estimates, in line with other media and entertainment stocks. As such improved operations would be an upside for the company. News Corp features lower earnings compared to the current valuation, and in that case investors might want to wait for a better picture of how it is performing as an independent company.

TIGER GLOBAL MANAGEMENT LLCRedeeming Groupon. The investment team had moved heavily into Groupon Inc (NASDAQ:GRPN) in the first quarter of the year, but then sold most of its shares between April and June. This looks like a profit-taking move for Tiger Global, as the daily deals company popped 45% during the quarter as CEO Andrew Mason- who many shareholders had not considered professional enough to run the company- departed. the valuation at Groupon Inc (NASDAQ:GRPN) is still quite speculative, with analysts expecting adjusted earnings per share to double next year and yet with the forward P/E still being rather high at 36. Recent results show only moderate revenue growth.

Priceline. Priceline.com Inc (NASDAQ:PCLN) has been a favorite of many Tiger Cub funds, and during Q2 Tiger Global increased its holdings of the online travel services company from about 380,000 shares to about 470,000- making it the fund’s third largest 13F holding by market value. In the second quarter of 2013, Priceline.com Inc (NASDAQ:PCLN) recorded increases of about 25% in both sales and net income. While markets have already priced in quite a bit of future growth at a trailing P/E of 31, this sustained high growth rate is impressive. Billionaire- and Tiger Cub- Stephen Mandel’s Lone Pine Capital had over $1 billion invested in Priceline.com Inc (NASDAQ:PCLN) at the end of March (find Mandel’s favorite stocks), and other funds with a significant stake included John Griffin’s Blue Ridge Capital and Philippe Laffont’s Coatue Management.

We’d be interested in looking into Priceline.com Inc (NASDAQ:PCLN); we’d be wary due to the high valuation, but signs that the company has the potential to continue its high growth rates would be interesting. We agree with Tiger Global’s decision to sell Groupon Inc (NASDAQ:GRPN), and actually don’t think it makes sense as a long position at all at this time. As for the pieces of the former News Corp, we’d consider Twenty-First Century Fox Inc (NASDAQ:FOXA) an interesting prospect: its valuation is in line with that of industry peers, it owns some good assets, and there is potential for more efficient management and therefore higher margins. We would keep an eye out for further results from the company.

Disclosure: I own no shares of any stocks mentioned in this article.

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

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

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

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!