Below are Maplelane Capital’s top 5 stock holdings. If you want to read our detailed discussion about Maplelane’s performance, its biggest stock holdings and the losses it incurred due to the GameStop saga, go directly to Maplelane’s Top 10 Stock Holdings.
5. Alphabet (NASDAQ: GOOG)
Maplelane Capital’s strategy of buying Alphabet (NASDAQ: GOOG) stock generated gains for the hedge fund. Shares of Google surged almost 20% in the last six months, thanks to growth in online advertising revenue and stabilizing economic trends.
Giverny Capital Asset Management LLC, which has generated a net return of 15.39% for the Q4, stated in an investors’ letter that Alphabet is fairly priced. Here’s what Giverny Capital Asset Management stated:
“Alphabet is our largest holding. We’re biased, but we’d argue that Alphabet is reasonably priced. It earns significant profit from travel related searches, which are way down this year. Travel spending figures to roar back at some point, possibly soon. Alphabet also spends extravagant amounts on R&D and capital spending as it finances younger ventures. Those other businesses, which include YouTube, Waymo selfdriving cars and cloud computing centers, plus research in artificial intelligence, should eventually generate meaningful returns for shareholders. Or at worst, they will consume less investment over time. If Alphabet simply exercises discipline over investment spending for a few years as travel advertising rebounds and the core search business grows, the resulting free cash flow should generate satisfactory returns for owners.”
4. JD.com (NASDAQ: JD)
JD remains one of Maplelane Capital’s top 10 stock holdings even though the hedge fund sold 42% of its stake in the company during the September quarter to take advantage of the stunning share price rally. JD accounts for about 3.19% of the hedge fund’s overall portfolio. Shares of Chinese e-commerce platform rallied almost 126% in the last twelve months.
Argosy Investors, which generated 29.8% in select accounts for 2020, has commented on few stocks including JD.com in an investor letter. Here is what Argosy Investors stated:
“JD.com has been making conscious decisions to break its business up into its component parts, which in our opinion helps surface the value of each business. JD’s enterprise value is about USD $120 billion today. JD spun off its JD Health business worth USD $28 billion (like Teladoc in the US), may spin off its JD Cloud business (similar to AWS in the US), has sold shares in its JD Logistics business and is shooting for a valuation of USD$40 billion in 2021 via an IPO, and JD Digits which provides supply chain and consumer loans was expected to be valued at nearly USD $30 billion before Ant Financial was prevented by the Chinese government from completing its IPO. The combined values of these business segments within JD is about $98 billion, leaving $22 billion for JD’s core retail business (and its cloud business) which is on track for over USD $100 billion in sales this year and growing over 20% per year. Assuming a 5% long-term margin for JD Retail, that segment is generating USD $5 billion of operating profit (EBIT). Given their strong market position, investors could value JD’s retail business alone at 20x EBIT, valuing JD retail at $100 billion. By comparison, Amazon was valued at over $175 billion during the year in which it earned USD $100 billion in revenue, so we continue to believe JD is being undervalued, despite a more competitive environment with Alibaba in China than Amazon faces in the US.”
3. Fiserv, Inc. (NASDAQ: FISV)
Maplelane Capital took advantage of the underperformance of Fiserv, Inc. (NASDAQ: FISV) shares during 2020. The hedge fund has created a big position in the second quarter and added to its existing position during the third quarter.
Oakmark Fund’s Portfolio Manager Bill Nygren explained Fiserv deserves to be included in his value picks. Here is what Bill Nygren stated:
“If you look out just a couple of years and give them full credit for the synergies that they expect in expense savings that they record from the First Data acquisition, that multiple falls from about 20x down to 16x. And then further, there’s a business inside of Fiserv that accounts for less than 5% of its revenues: Clover.” Nygren mentioned that financial firm Square Inc., trades in the public market for more than all of Fiserv’s market cap but Clover, which has a lot of similarities to the business of Square, actually processes more volume.”
2. Amazon.com (NASDAQ: AMZN)
The largest e-commerce giant Amazon.com (NASDAQ: AMZN) is the second-largest stock holding of Maplelane Capital. It is the long-running investment of the New York-based hedge fund and the firm has added to its existing position during the September quarter.
L1 Capital International Fund has presented a bullish case for Amazon in an investors’ letter. Here is what L1 Capital stated:
“Several investments in the technology sector were trimmed on valuation grounds with the proceeds used to increase our investment in Amazon. Amazon’s successful flywheel business model and Amazon Web Services are well known. However, we believe the current share price under‑appreciates:
– The consistency and longevity of Amazon’s growth potential in its key businesses;
– The importance of additional revenue streams such as advertising which are high margin and growing rapidly; and
– The strengthening barriers to competition and competitive advantages arising from Amazon’s stepped‑up investment in logistics and other infrastructure.”
1. Alibaba Group Holding Limited (NYSE: BABA)
Alibaba Group Holding Limited (NYSE: BABA) tops the list of Maplelane’s top 10 stock holdings. The hedge fund has reduced stake in the company by 12% in the September quarter, but the Chinese e-commerce platform is still the largest stock holding of its portfolio – accounting for 7.11% of the overall portfolio.
Aikya Investment Management Ltd, which returned 21% for the Q4 of 2020, is optimistic about Alibaba’s cash flow growth. Here is what Aikya Investment Management stated in an investors’ letter:
“Our long-term predictions suggest Alibaba can generate $60 billion of free cash flow in 2030. Working on the assumption that Alibaba will be a much more mature business in 2030, we would expect our investment to at least generate a 5% free cash flow yield. This implies Alibaba should be worth $1.2 trillion in 2030, and if we then factor inappropriate adjustments to the share count for share-based compensation then we would expect to earn a 3% return in dollars from today’s share price.”
Please also see Billionaire David Tepper’s Top 10 Stock Holdings and 10 Cheap Stocks Billionaire Leon Cooperman Is Buying
