In this article, we discuss 10 stocks under $25 to buy according to billionaire Philippe Laffont.
Coatue Management, a technology-themed investment management company, was founded by Philippe Laffont in 1999. Philippe Laffont is an American billionaire hedge fund manager and venture capitalist, with a Bachelor’s in computer science from MIT.
Laffont currently serves as the portfolio manager of Coatue Management, and oversees a 13F portfolio worth $24.5 billion as of Q3 2021. His hedge fund’s investment activity is largely concentrated in the healthcare, information technology, consumer discretionary, communications, and finance sectors, with the top ten holdings making up 45.48% of the total portfolio.
Philippe Laffont began his career in 1992 with McKinsey & Company as an analyst, staying with the firm till 1994. For the next two years, he worked as an independent consultant, before joining Julian Robertson’s Tiger Management in 1996 as a research analyst. Laffont is one of the so-called Tiger Cubs who ventured out on their own, successfully establishing their own hedge funds.
As per the 13F filings from September, Coatue Management purchased 13 new stocks, reduced holdings in 37 equities, sold out of 13 companies, and bought additional stakes in 11 securities. The hedge fund’s top buys for the third quarter included JD.com, Inc. (NASDAQ:JD), Microsoft Corporation (NASDAQ:MSFT), and Confluent, Inc. (NASDAQ:CFLT). Whereas, Coatue Management reduced holdings in Amazon.com, Inc. (NASDAQ:AMZN), Block, Inc. (NYSE:SQ), and PayPal Holdings, Inc. (NASDAQ:PYPL). Laffont’s portfolio also consists of value stocks and affordably priced equities, in addition to expensive blue chip stocks.
The most notable stocks from Philippe Laffont’s Q3 portfolio include Tesla, Inc. (NASDAQ:TSLA), Meta Platforms, Inc. (NASDAQ:FB), and Netflix, Inc. (NASDAQ:NFLX).
Philippe Laffont of Coatue Management
Our Methodology
We used the third quarter portfolio of Philippe Laffont’s Q3 portfolio to select the billionaire’s top 10 stocks priced under $25, ranking the companies according to Laffont’s stake value in each holding.
The analyst ratings, Q3 earnings, and the hedge fund sentiment around each stock is also discussed to provide readers with some additional context regarding their investment decisions.
Stocks Under $25 to Buy According to Billionaire Philippe Laffont
10. RLX Technology Inc. (NYSE:RLX)
Coatue Management’s Stake Value: $64,210,000
Percentage of Coatue Management’s 13F Portfolio: 0.26%
Number of Hedge Fund Holders: 11
Share Price as of January 12: $3.82
RLX Technology Inc. (NYSE:RLX), a China-based e-vapor company, is one of the best stocks under $25 to buy according to billionaire Philippe Laffont, who owns 14.2 million shares of RLX Technology Inc. as of the third quarter, worth $64.2 million, representing 0.26% of his total Q3 investments.
RLX Technology Inc., on December 3, posted its Q3 results. The company announced earnings per diluted average share of $0.05. Revenue over the period totaled $260.2 million, down 34% year-over-year, owing to the COVID-19 restrictions in China, which had a negative impact on sales and channel inventory management.
On December 8, RLX Technology Inc. announced that its board of directors has authorized a share repurchase program under which the company may repurchase up to $500 million of its shares over a period until December 31, 2023.
11 hedge funds monitored by Insider Monkey were bullish on RLX Technology Inc. in the third quarter, with total stakes valued at $251.8 million. Wildcat Capital Management is the largest RLX Technology Inc. stakeholder as of September, increasing its stake in the company by 2762%, holding a $107.7 million position.
Citi analyst Lydia Ling on December 6 lowered the price target on RLX Technology Inc. to $11.50 from $15.10 and kept a Buy rating on the shares post the Q3 results.
In addition to Tesla, Inc., Meta Platforms, Inc., and Netflix, Inc., RLX Technology Inc. is a top stock pick of billionaire Philippe Laffont.
9. Stitch Fix, Inc. (NASDAQ:SFIX)
Coatue Management’s Stake Value: $64,867,000
Percentage of Coatue Management’s 13F Portfolio: 0.26%
Number of Hedge Fund Holders: 30
Share Price as of January 12: $18.33
Stitch Fix, Inc. (NASDAQ:SFIX) is a California-based digital styling service which uses different algorithms to customize clothes according to an individual’s style, budget, and personal preferences. The company serves customers in the United States and the United Kingdom.
Philippe Laffont, as of September 2021, owns 1.62 million Stitch Fix, Inc. shares, worth $64.8 million, accounting for 0.26% of the billionaire’s total 13F portfolio.
On December 7, Stitch Fix, Inc. posted its financial results for Q1 2022. The company reported a loss per share of $0.02, beating estimates by $0.11. Revenue for the quarter jumped 18.52% year-over-year to $581.24 million, exceeding estimates by $10.76 million.
JPMorgan analyst Cory Carpenter lowered the price target on Stitch Fix, Inc. to $20 from $25 and kept a Neutral rating on the shares on December 15. In 2022, the analyst expects the internet group to be in a stronger position than pre-pandemic levels due to increased digitization of the economy, and he prefers e-commerce and subscription based names over online advertising.
A total of 30 hedge funds reported owning stakes worth $600.6 million in Stitch Fix, Inc. during Q3 2021, as compared to 35 funds in the preceding quarter, holding stakes in the company amounting to $702.7 million.
Slate Path Capital, the leading Stitch Fix, Inc. stakeholder, boosted its position in the company by 18% in the third quarter, holding 2.98 million shares worth $119.1 million.
Here is what Baron Funds has to say about Stitch Fix, Inc. in its Q3 2021 investor letter:
“Weakness in Consumer Discretionary was largely due to share price declines in online personal styling service Stitch Fix, Inc. Stitch Fix’s shares fell in the aftermath of poorly communicated changes to its stylist employment program.”
8. Nikola Corporation (NASDAQ:NKLA)
Coatue Management’s Stake Value: $81,084,000
Percentage of Coatue Management’s 13F Portfolio: 0.32%
Number of Hedge Fund Holders: 15
Share Price as of January 12: $10.70
Nikola Corporation (NASDAQ:NKLA), an Arizona-based manufacturer of electric vehicles, is one of the top stocks under $25 to buy according to billionaire Philippe Laffont. Laffont’s Coatue Management owns 7.59 million Nikola Corporation shares, worth over $81 million, representing 0.32% of the firm’s Q3 investments.
In the third quarter earnings report published on November 4, Nikola Corporation posted a loss per share of $0.22, beating estimates by $0.04.
Wedbush analyst Daniel Ives raised the price target on Nikola Corporation to $15 from $10 and kept a Neutral rating on the shares on November 8. The analyst observed that Nikola Corporation has taken important steps towards regaining its Wall Street credibility as the company’s Arizona factory build-out, key partnerships, and settling the SEC issues are “all positives in the eyes of the Street.”
Jeff Ubben’s Inclusive Capital is the biggest Nikola Corporation stakeholder as of the third quarter, with 10.2 million shares worth $109.6 million. Overall, the Q3 database of Insider Monkey suggests that 15 hedge funds were bullish on the stock.
7. Oscar Health, Inc. (NYSE:OSCR)
Coatue Management’s Stake Value: $107,702,000
Percentage of Coatue Management’s 13F Portfolio: 0.43%
Number of Hedge Fund Holders: 17
Share Price as of January 12: $7.26
Oscar Health, Inc. (NYSE:OSCR) is an American health insurance company from New York, priced at $7.26 as of January 12, which made it to our list of the best stocks under $25 to buy according to billionaire Philippe Laffont. Coatue Management owns 6.1 million Oscar Health, Inc. shares in the third quarter, valued at $107.7 million, representing 0.43% of the firm’s total investments.
Publishing its Q3 results on November 10, Oscar Health, Inc. posted a loss per share of $1.02, missing estimates by $0.37. The quarterly revenue equaled $668.38 million, outperforming estimates by $27.38 million.
The Q3 database of Insider Monkey reported that 17 hedge funds were long Oscar Health, Inc., up from 16 funds in the prior quarter. Joshua Kushner’s Thrive Capital is the largest Oscar Health, Inc. stakeholder, boosting its stake in the company by 15% in the third quarter, holding 37.6 million shares worth $654.1 million.
6. KE Holdings Inc. (NYSE:BEKE)
Coatue Management’s Stake Value: $125,830,000
Percentage of Coatue Management’s 13F Portfolio: 0.51%
Number of Hedge Fund Holders: 26
Share Price as of January 12: $22.74
KE Holdings Inc. (NYSE:BEKE) is a Chinese company assisting with housing transactions online and on-premises, making the process easier for home buyers. Coatue Management recently acquired KE Holdings Inc., purchasing 6.89 million shares of the company in Q3 2021, worth $125.8 million, representing 0.51% of the firm’s total 13F portfolio.
JPMorgan analyst Alex Yao upgraded KE Holdings Inc. to Overweight from Neutral with a price target of $30, up from $21 on November 9.
On November 8, KE Holdings Inc. posted its Q3 results, reporting a loss per share of $0.12, missing estimates by $0.07. The $2.83 billion revenue dropped 9.29% year-over-year, but exceeded estimates by $442.26 million.
According to the hedge funds tracked by Insider Monkey in the third quarter, 26 funds were long KE Holdings Inc., and Lone Pine Capital was the leading company stakeholder, with a $551.4 million position in the company as of September.
KE Holdings Inc. is a notable stock pick of billionaire Philippe Laffont, just like Tesla, Inc., Meta Platforms, Inc., and Netflix, Inc..
Here is what Tao Value has to say about KE Holdings Inc. in its Q3 2021 investor letter:
“As witnessed in the past quarter, the government intervention in the Chinese private sector is elevated to an unprecedented level. Given this background, I thoroughly reviewed all our Chinese holdings and made a few changes. We exited KE holdings (ticker: BEKE), for high potential regulatory risk and the passing of the visionary founder & CEO Zuo Hui (who was a core tenet of our original thesis).”
5. Blend Labs, Inc. (NYSE:BLND)
Coatue Management’s Stake Value: $146,919,000
Percentage of Coatue Management’s 13F Portfolio: 0.59%
Number of Hedge Fund Holders: 19
Share Price as of January 12: $7.32
Blend Labs, Inc. (NYSE:BLND) is one of the best stocks under $25 to buy according to Philippe Laffont, with his hedge fund acquiring an approximately $147 million position in the company as of Q3 2021, which represents 0.59% of the billionaire’s total investments. Blend Labs, Inc. is a financial services company that uses a cloud-based platform to assist customers with mortgages, home equity loans, lines of credit, vehicle loans, personal loans, credit cards, and deposit accounts.
On November 10, Blend Labs, Inc. reported its financial results for the third quarter, posting a loss per share of $0.13, missing estimates by $0.02. Revenue over the period totaled $89.57 million, outperforming estimates by $3.35 million.
Wells Fargo analyst Michael Turrin lowered the firm’s price target on Blend Labs, Inc. on December 13 to $15 from $20 to reflect multiple compression across the software space. The analyst kept an Overweight rating on the stock.
A total of 19 hedge funds in the third quarter database of elite funds maintained by Insider Monkey reported owning stakes worth $487.7 million in Blend Labs, Inc..
4. Dingdong (Cayman) Limited (NYSE:DDL)
Coatue Management’s Stake Value: $160,968,000
Percentage of Coatue Management’s 13F Portfolio: 0.65%
Number of Hedge Fund Holders: 5
Share Price as of January 12: $11.55
Billionaire Philippe Laffont, via Coatue Management, boosted his stake in Dingdong (Cayman) Limited (NYSE:DDL) by 3505% in the third quarter, holding over 7 million shares worth $160.9 million. The stock represents 0.65% of the fund’s total Q3 investments. On November 19. JPMorgan analyst Andre Chang initiated coverage of Dingdong (Cayman) Limited with an Underweight rating and a $21 price target.
Dingdong (Cayman) Limited is a Chinese e-commerce company, delivering household necessities and groceries to customers on a daily basis. The company reported Q3 results on November 15, posting a loss per share of $0.95, beating estimates by $0.02.
Dingdong (Cayman) Limited announced on December 20 that its board of directors has authorized a share repurchase program under which the company may repurchase up to $30 million of its shares until December 19, 2022.
5 hedge funds in the database of Insider Monkey were bullish on Dingdong (Cayman) Limited as of September 2021, and one of the leading shareholders of the company is Tiger Global Management, with a $24.8 million stake.
3. Agora, Inc. (NASDAQ:API)
Coatue Management’s Stake Value: $277,315,000
Percentage of Coatue Management’s 13F Portfolio: 1.12%
Number of Hedge Fund Holders: 11
Share Price as of January 12: $15.34
Agora, Inc. (NASDAQ:API) represents 1.12% of Coatue Management’s total third quarter investments, with the hedge fund owning 9.5 million shares of the company worth $277.3 million. Agora, Inc. is a software company offering on-demand real-time engagement services via video, voice, and messages.
Agora, Inc. reported its Q3 results on November 15, announcing a loss per share of $0.10, missing estimates by $0.01. The quarterly revenue equaled $45.04 million, up 46% year-over-year, exceeding estimates by $5.38 million.
API Needham analyst Vincent Yu lowered the price target on Agora, Inc. to $27 from $40 but kept a Buy rating on the shares on November 24. Agora, Inc.’s Q3 revenue and gross margins were better than expected, and its social entertainment in China’s domestic market and virtual event services in overseas markets are expected to become its growth drivers.
11 hedge funds in the database of Insider Monkey were bullish on Agora, Inc. in Q3 2021, with stakes totaling $354.6 million, as compared to 17 funds holding stakes worth $564 million in Agora, Inc. in the preceding quarter.
Here is what Tao Value has to say about Agora, Inc. in its Q3 2021 investor letter:
“As witnessed in the past quarter, the government intervention in the Chinese private sector is elevated to an unprecedented level. Given this background, I thoroughly reviewed all our Chinese holdings and made a few changes. We exited Agora (ticker: API) as we estimated that it has 25+% of evaporating revenue tied to online education use cases, but the management seemed to be evasive about the potential impact.”
2. DiDi Global Inc. (NYSE:DIDI)
Coatue Management’s Stake Value: $301,190,000
Percentage of Coatue Management’s 13F Portfolio: 1.22%
Number of Hedge Fund Holders: 15
Share Price as of January 12: $4.99
Priced at $4.99 as of January 12, DiDi Global Inc. (NYSE:DIDI) is one of the best stocks to buy under $25 according to billionaire Philippe Laffont. DiDi Global Inc. is a Chinese company offering vehicles-for-hire, providing cab rides, food delivery, package delivery, freight moving, and bicycle sharing services via an application that operates in Asia Pacific, Latin America, Africa, Central Asia, and Russia.
Philippe Laffont, via Coatue Management, owns 40.4 million DiDi Global Inc. shares, worth $301.1 million, accounting for 1.22% of the firm’s Q3 investments.
A total of 15 hedge funds were long DiDi Global Inc. as of September 2021, holding stakes amounting to $701.6 million. One of the leading DiDi Global Inc. stakeholders is Third Point, with a $99.4 million position in the company.
Chinese regulators called on top executives of DiDi Global Inc. on November 26 to establish a plan to delist from the New York Stock Exchange over data security concerns. The regulators offered alternatives to DiDi Global Inc. including privatization or a share float in Hong Kong after a delisting from the United States.
1. Marqeta, Inc. (NASDAQ:MQ)
Coatue Management’s Stake Value: $612,409,000
Percentage of Coatue Management’s 13F Portfolio: 2.49%
Number of Hedge Fund Holders: 20
Share Price as of January 12: $15.03
Marqeta, Inc. (NASDAQ:MQ) is one of the best stocks priced under $25 to buy according to Philippe Laffont, with the billionaire’s fund elevating its stake in the company by 847% in the third quarter. Coatue Management owns 28.4 million Marqeta, Inc. shares, worth $612.4 million, representing 2.49% of the firm’s total Q3 investments.
Marqeta, Inc. is a financial technology company offering digital payment solutions including prepaid, debit, and credit cards, and a modern card issuing platform.
Announcing its financial results for the third quarter on November 10, Marqeta, Inc. reported a loss per share of $0.08, beating estimates by $0.05. Revenue for the period came in at $131.5 million, exceeding estimates by $12.29 million.
Loop Capital analyst Hal Goetsch on December 20 initiated coverage of Marqeta, Inc. with a Hold rating and a $19 price target. The analyst stated that although Marqeta, Inc. has “a robust growth outlook” tied to the success and growth of some of its “lighthouse customers” such as Block, Inc. (NYSE:SQ), Affirm Holdings, Inc. (NASDAQ:AFRM), and DoorDash, Inc. (NYSE:DASH), the company’s customer concentration warrants a Hold rating at the existing valuation.
Echo Street Capital Management is one of the leading Marqeta, Inc. stakeholders as of Q3 2021, with 4.41 million shares worth $97.6 million. Overall, 20 hedge funds were bullish on the stock as per Insider Monkey’s Q3 data.
Here is what Artisan Mid-Cap Fund has to say about Marqeta, Inc. in its Q3 2021 investor letter:
“Marqeta is a digital payment software company with a focus on providing fintechs and merchants the infrastructure to build and process configurable payment cards. The company’s superior API technology allows it to easily connect to customers’ internal systems, enabling quicker product development and introduction. Marqeta’s growth over the years has been largely attributed to its partnership with Square’s Cash App—more than 70% of revenues—but we believe recent client wins (Google Pay) and the continued emergence of innovative digital payment services who need Marqeta’s technology infrastructure make for a compelling profit cycle ahead. With shares pulling back during the quarter, we initiated a small GardenSM position.”
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This article is originally published at Insider Monkey.
