Billionaire Stephen Mandel‘s Lone Pine Capital didn’t suffer the same fate in 2015 as most of its large hedge funds peers. While the firm didn’t generate astonishing returns during the year, its flagship Cypress fund and other smaller funds managed to safeguard investors’ money and close the year in green with high single-digit returns. However, it seems that the fund is having some trouble staying in the green amid an increase in volatility this year. Insider Monkey’s analysis of the fund’s 13F holdings in companies worth at least $1 billion shows that the 40 long positions held by the fund generated a weighted average loss of 3.9% during the first quarter. In this post, we are going to focus on Lone Pine Capital’s five largest holding going into 2016 and dissect how they performed individually in the first quarter.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
#5 Dollar Tree, Inc. (NASDAQ:DLTR)
– Shares Owned by Lone Pine Capital (as of December 31): 13.2 million
– Value of Holding (as of December 31): $1.01 billion
Lone Pine Capital initiated a stake in Dollar Tree, Inc. (NASDAQ:DLTR) during the third quarter and boosted it by 157% during the fourth quarter. With ownership of 4.18 million shares of the company, Charles Akre‘s Akre Capital Management trailed Lone Pine Capital as the largest shareholder of Dollar Tree, Inc. (NASDAQ:DLTR) at the end of December among funds covered by us. Shares of Dollar Tree traded in the $74-$82 for the most part of the first quarter, but managed to end the quarter with gains of 6.78%. For its fiscal 2015 fourth quarter, the company reported EPS of $1.01 on revenue of $5.37 billion versus analysts’ expectation of EPS of $1.07 on revenue of $5.41 billion. Despite the weaker than expected numbers, some analysts appreciated the progress made by the company in integrating its business with Family Dollar, which it had acquired last year. On March 25, analysts at Credit Suisse reiterated their ‘Underperform’ rating and $70 price target on the stock.