Tiger Global Management was founded by Charles “Chase” Coleman III in 2001 with $25 million seed money from billionaire Julian Robertson. According to the latest 13F filings, Tiger Global manages a portfolio worth over $5 billion. Tiger Global got huge fame after impressive returns due to its early investments in famous internet companies like Facebook Inc (NASDAQ: FB), LinkedIn Corp (NYSE:LNKD), Zynga Inc (NASDAQ:ZNGA), Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX).
Tiger Global mainly focuses on tech and internet companies. The fund was got off to a bad start in 2016, and reported double digit losses. Last year, Feroz Dewan, a 12-year veteran of Tiger Global, and known to be one of the top brains behind the firm’s performance, left the firm to start his own investment company.
In this article, we will examine the latest 13F filings to see some stocks on which Tiger Global turned bearish.
Through extensive research, we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas. In our backtests, a portfolio of the 15 most popular small-cap stocks generated monthly alpha of 81 basis points, versus 0.7 percentage points posted by hedge funds’ top large- and mega-cap picks (see more details here).
Apple Inc. (NASDAQ:AAPL)
– Shares Owned by Tiger Global Management (as of June 30): 1.38 million
– Value of Tiger Global Management’s Holding (as of June 30): $131.91 million
Tiger Global sold over 4.27 million shares of Apple Inc. (NASDAQ:AAPL) in the second quarter, cutting its position in the company by 75%. The stock is up by 0.99% so far this year. Just recently, EU’s top competition regulator ordered the government of Ireland on Tuesday to recover a whopping $14.6 billion in unpaid taxes from Apple. Apple’s CEO Tim Cook slammed the ruling in an open letter to customers, claiming the EU’s decision had “no basis” in fact or law. Apart from Coleman, David Einhorn and George Soros sold their stakes in Apple in the second quarter, while legendary investor Warren Buffett’s fund increased its position by 55%. Apple Inc. (NASDAQ:AAPL) expects fiscal fourth quarter revenue between $45.5 billion and 47.5 billion, versus the consensus of $45.71 billion. Of the 749 funds tracked by Insider Monkey, 116 were long Apple Inc. (NASDAQ:AAPL) at the end of the second quarter, significantly down from 152 funds a quarter earlier.
TAL Education Group (ADR) (NYSE:XRS)
– Shares Owned by Tiger Global Management (as of June 30): 602,500
– Value of Tiger Global Management’s Holding (as of June 30): $37.39 million
Tiger Global Management unloaded 64% of its stake in the Beijing-based tutoring company during the second quarter, selling over 1.11 million shares. Last month, TAL Education Group (NYSE:XRS) reported fiscal first quarter EPS of $0.27, worse than the consensus estimate of $0.29, while revenue in the period came in at $195.1 million, well above the estimated $184.06 million. For the second quarter 2017, the company expects revenue to come in at $247.9 million to $251.3 million, when analysts expect $248.0 million. The stock has gained over 30% since the start of 2016. Wang Chen’s Serenity Capital had 1.01 million shares at the end of the second quarter. Overall, 15 hedge funds tracked by Insider Monkey held stakes in TAL Education Group (ADR) (NYSE:XRS) at the end of the June quarter.
On the next page, we will continue our discussion of stocks on which Coleman turned bearish in the second quarter.
Pure Storage Inc (NYSE:PSTG)
– Shares Owned by Tiger Global Management (as of June 30): 1 million
– Value of Tiger Global Management’s Holding (as of June 30): $10.9 million
Tiger Global sold over 4.24 million shares of Pure Storage Inc (NYSE:PSTG) in the second quarter, unloading 80% of the company’s shares from its portfolio. Last week, the California-based data storage company reported second-quarter adjusted loss of $0.16 per share, better than the average analyst estimate of $0.23, while revenue of $163.2 million was above analysts’ forecasts of $155.14 million. For the fiscal 2017 third quarter, Pure Storage Inc (NYSE:PSTG) sees its revenue in the range of $187 million to $195 million, versus the consensus estimate of $190.7 million. The stock has lost over 24% in value so far this year. From our system, 14 funds were positioned in Pure Storage Inc (NYSE:PSTG) at the end of the second quarter. The total value of these positions is about $101.75 million
Square Inc (NYSE:SQ)
– Shares Owned by Tiger Global Management (as of June 30): 1.18 million
– Value of Tiger Global Management’s Holding (as of June 30): $10.699 million
Tiger Global turned bearish on the San Francisco-based payment processing company during the second quarter, selling around 81% of its stake, and ending the quarter with 1.18 million shares of the company, which account for 0.21% of the fund’s total portfolio. BTIG recently downgraded Square Inc (NYSE:SQ) to ‘Neutral’ from ‘Buy’. The company posted a second-quarter loss of $0.08 per share, narrower than the excepted $0.11, while revenue of $439 million was above the forecasts of $406.93 million. Out of the total funds tracked by Insider Monkey, 16 funds owned $107.23 million worth of Square Inc (NYSE:SQ) shares heading into the third quarter.
Netflix, Inc. (NASDAQ:NFLX)
Tiger Global dumped all 17.99 million shares of Netflix, Inc. (NASDAQ:NFLX) it held at the end of March, closing its position in the media streaming company. William Blair & Company has recently upgraded Netflix, Inc. (NASDAQ:NFLX) to ‘Outperform’ from ‘Market Perform’, adding that Netflix has a 50% upside potential. Last month, Netflix Inc (NASDAQ:NFLX) said that it had added 1.7 million new streaming customers in the three months ended June 30, significantly lower than the estimates of 2.5 million. For the third quarter, Netflix expects to add another 2 million new subscribers, also well below analysts’ expectations of 2.54 million. With ownership of 10.20 million shares, Karthik Sarma’s SRS Investment is one of the 54 funds in our database that have stakes in Netflix, Inc. (NASDAQ:NFLX) as of the end of the second quarter.