Billionaire Stephen Mandel, one of the many “Tiger Cubs” who worked under Julian Robertson at Tiger Management for a time, founded Lone Pine Capital in 1997. In a quarterly letter to investors dated January 15, Lone Pine Capital revealed that internet-driven investments continued to account for the largest share of the firm’s long portfolio, as “the internet remains the single most important and disruptive economic phenomenon in the world” according to the letter. As stated in the aforementioned letter, the investment firm is shorting companies operating in areas such as advertising, media, retailing, technology, and travel, whose “longstanding economic models” are being dismantled by the rise of the internet. The 13F filing for the March quarter submitted with the SEC by Mr. Mandel’s firm reveals that Lone Pine’s top stock picks are mostly dominated by tech companies that have conquered the online space and continue to benefit from the expansion of the internet. That said, the following article will discuss Mr. Mandel’s top technology picks as of the end of the first quarter.
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#5. JD.Com Inc. (ADR) (NASDAQ:JD)
– Number of shares owned by Lone Pine Capital as of March 31: 22.08 Million
– Value of Lone Pine Capital’s holding as of March 31: $585.10 Million
Lone Pine Capital trimmed its stake in JD.Com Inc. (ADR) (NASDAQ:JD) by 4.92 million American Depository Shares (ADSs) during the first quarter of 2016, to 22.08 million ADSs. The reduced stake was valued at $585.10 million at the end of the quarter and accounted for 2.9% of the fund’s portfolio. JD.Com, China’s largest internet company by revenue, has seen its market capitalization decline by 26% this year. The company’s net revenue for the first quarter was $8.4 billion, which marked a massive year-over-year increase of 47.3%. However, soon after JD.Com released its first quarter earnings report, analysts at MKM Partners cut their price target on the Chinese e-commerce giant to $32 from $34, though they maintained their ‘Buy’ rating on it, saying that “the key issue for the stock is related to profitability”. JD.Com recorded an increase of 55% in gross merchandise volume to $20.1 billion in the first quarter, after recording a year-over-year increase of 99% in the same quarter of 2015. Tiger Global Management, founded by Tiger Cub Chase Coleman, owns 44.01 million ADSs of JD.Com Inc. (ADR) (NASDAQ:JD) as of the end of March.
#4. Priceline Group Inc. (NASDAQ:PCLN)
– Number of shares owned by Lone Pine Capital as of March 31: 791,637
– Value of Lone Pine Capital’s holding as of March 31: $1.02 Billion
Stephen Mandel and his team also reduced their exposure to Priceline Group Inc. (NASDAQ:PCLN) in the first quarter, as Lone Pine cut its stake in the stock by 42,748 shares. The stake of 791,637 shares owned on March 31 was worth $1.02 billion and made up 5.1% of Lone Pine’s portfolio. Priceline Group, which provides customers with a wide range of accommodation reservations through its booking.com, priceline.com and agoda.com brands, has seen its shares advance by 3% in the past 12 months. Priceline has greatly benefited from the increased usage of the internet in recent years, as more consumers search for products and services online, as evidenced by the fact that its shares are up by an impressive 4,103% in the past ten years. The company’s total revenue for the three months that ended March 31 reached $2.15 billion, up from $1.84 billion recorded a year earlier. Lee Ainslie’s Maverick Capital had 262,612 shares of Priceline Group Inc. (NASDAQ:PCLN) in its portfolio at the end of the March quarter.
Three tech giants battle it out for the top spot in Mr. Mandel’s portfolio; see the battle unfold on the next page.