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.

Groupon Inc (GRPN) and More: Tiger Global Management’s Small Cap Picks

Colfax Corp (NYSE:CFX) was another of Tiger Global’s small cap picks; according to the 13F, it initiated a 3.5 million shares position between January and March. The diversified machinery company trades at 29 times forward earnings estimates, indicating that markets are expecting high earnings growth here as well. Given the industry, it’s not that surprising that Colfax carries a beta of 1.9; this shows that the stock price tends to react strongly to moves in broader market indices. Sales numbers, at least, have not been that strong recently and we think that we would avoid the stock.

Tiger Global disclosed ownership of 1.3 million shares of $3.4 billion market cap 3-D printing related company Stratasys, Ltd. (NASDAQ:SSYS). Sales more than doubled in its most recent quarter compared to the same period in the previous year, and many market participants are very optimistic about 3-D printing. Though we are a bit concerned that specific companies in the business might be overhyped, the fund’s participation here is somewhat notable. Analyst consensus for 2014 implies a forward earnings multiple of 35, so once again the current valuation already assumes high growth for at least some time.

Talk about catching a falling knife: J.C. Penney Company, Inc. (NYSE:JCP), which is down 31% in the last year and over 40% in the last two years, rounds out our list of Tiger Global’s top five small cap picks. The retailer experienced a 16% decline in revenue last quarter (fiscal Q1) compared to the first quarter of its last fiscal year, and has been unprofitable for some time; free cash flows are also highly negative. According to the most recent data, about a third of the float is held short. J.C. Penney looks like a highly risky investment- we’re highly skeptical that its turnaround efforts will be successful.

Disclosure: I own no shares of any stocks mentioned in this article.

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.
Loading...