We track hundreds of 13F filings from hedge funds such as billionaire Stephen Mandel’s Lone Pine Capital and other notable investors, using the included information to help us develop investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year). 13Fs are also a potential source of initial investment ideas; investors can see what top managers are doing and then perform further research on any intriguing names. Read on for our quick take on Lone Pine’s five largest holdings by market value as of the end of March and compare these picks to those in previous filings.
Mandel and his team reported a position of 1.8 million shares of Priceline.com Inc (NASDAQ:PCLN) at the end of the first quarter of 2013. Blue Ridge Capital, managed by John Griffin, is another of the many Tiger Cub funds which have been major shareholders in the travel reservations website (see Griffin’s stock picks). While Priceline is expensive in terms of its trailing earnings, with a P/E multiple of 28, the company has continued to experience high growth rates even as it has increased in size; specifically, earnings grew by 34% last quarter compared to the first quarter of 2012. Given its further growth potential the stock could be worthy of further research.
Lone Pine trimmed its stake in Google Inc (NASDAQ:GOOG) between January and March, but still owned 1.4 million shares according to the 13F. Our database shows that Google was the second most popular stock among hedge funds in Q1 2013 (check out the rest of our top ten list). Similarly to Priceline, Google’s trailing P/E is somewhat high (at 27) but the company has been growing its business in both its advertising (read: search) and Motorola related business segments. As such, Wall Street analysts are expecting earnings per share to increase going forward; consensus estimates for 2014 imply a forward P/E of 17.