Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Facebook Inc (FB), Capital One Financial Corp. (COF): Here’s What This Huge Long-Term Winner Is Buying

LONE PINE CAPITALEvery quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today, let’s look at Lone Pine Capital, founded by Steve Mandel in 1997. Prior to that, Mandel was a managing director at Tiger Management. Lone Pine is one of the biggest hedge fund companies, and reportedly beat the S&P 500 for 11 years in a row. Like many value investors, Mandel is known to dig deep into companies, aiming to buy undervalued ones.

The company’s reportable stock portfolio totaled $15.9 billion in value as of Dec. 31, 2012.

Interesting developments
So what does Lone Pine Capital’s latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Facebook Inc (NASDAQ:FB) and Capital One Financial Corp. (NYSE:COF). Other new holdings of interest include Intuitive Surgical, Inc. (NASDAQ:ISRG). Facebook Inc (NASDAQ:FB) is compelling to many, with its hundreds of millions of users and its top ranking in mobile app reach. But it’s not without risks, such as a seemingly rich valuation and concerns about the influential younger generation gravitating toward other social platforms. In addition, a new study casts doubt on the efficacy of social-media advertising.

Shares of Intuitive Surgical hit a 52-week low recently, partly on reports that robotic surgeries may not be as worthwhile as many think and news of an investigation into its systems’ safety. But with a recent P/E ratio of about 30, a forward P/E of 21, and an expected near-term growth rate of 18% (following an average growth rate of 34% over the past five years), many see it as attractively priced now.

Among holdings in which Lone Pine Capital increased its stake was Priceline.com Inc (NASDAQ:PCLN). Priceline has been experiencing strong growth internationally, and its financial statements offer lots to love, such as its steep and growing free cash flow and net margins near 27%. Its forward P/E ratio of just 15 is attractive, too, considering its sizable growth rate. The company has made a $1.8 billion offer for Kayak Software Corp (NASDAQ:KYAK), and its hotel-booking business has been a very strong performer.

Lone Pine Capital reduced its stake in lots of companies, including Accretive Health, Inc. (NYSE:AH), which has fallen by more than 57% over the past year, in part due to news that it’s delaying releasing its fourth-quarter and year-end earnings reports as it reevaluates its accounting habits. The company specializes in revenue cycle management services for the health-care industry. Right now, it’s heavily shorted, reflecting market skepticism about it.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.