Philippe Laffont’ Coatue Management Slashes Equity Portfolio by $1 Billion; Several Top Picks Scaled Back

Microsoft Corporation (NASDAQ:MSFT)

– Shares held by Coatue as of June 30: 4.88 million

– Value of Coatue’s stake as of June 30: $250.14 million

Unlike Amazon, Microsoft Corporation (NASDAQ:MSFT) slipped over the second quarter, losing more than 7% of its value. Coatue cut its position in Microsoft by 55% during the same period. Still, its stake remained quite significant, valued at around $250.14 million at the end of June. Among the 130 other funds in our database long this stock, we could highlight First Eagle Investment Management, with 23.45 million shares, valued at roughly $1.2 billion on June 30, and Fisher Asset Management, which held 18.3 million shares of the tech behemoth.  After a volatile year, Microsoft Corporation (NASDAQ:MSFT)’s stock has managed to return just 1.4% since January. However, since the beginning of the third quarter, shares have risen by more than 11%, largely on the back of strong fiscal fourth-quarter results posted in late-July, and, most recently, on the back of news related to its CRM segment. On Monday, the company said it had inked a deal with HP Inc (NYSE:HPQ), to provide it with Microsoft Dynamics, which will add to the suite of Microsoft cloud products HP already uses. “We have chosen Microsoft Dynamics as our CRM solution for our direct selling, partners and services. This brings us a cloud-based solution that delivers a more effective and efficient collaboration engine across our business,” HP’s COO Jon Flaxman explained.

Alphabet Inc (NASDAQ:GOOG)

– Class C Shares held by Coatue as of June 30: 683,810

– Value of Coatue’s stake as of June 30: $475.05 million

Another tech giant that witnessed a drop in Coatue’s exposure over the second quarter was Alphabet Inc (NASDAQ:GOOG). The firm reduced its stake in Class C stock by roughly 28% over the period, to 527,235 shares, and its stake in Class A shares by 4% to 156,575 shares. Still, Alphabet remained the most popular stock among the funds that we track, counting 187 unique hedge fund backers holding almost $30 billion in class A or class C stock on June 30. Among large investors, we can also find Harris Associates, which declared holding 631,571 Class A shares and 2.18 million Class C shares as of the end of June. Shares of Alphabet’s class A stock have had a volatile year, managing to post returns of less than 2.7% year-to-date. Nonetheless, over the third quarter, the stock has gained almost 15%. At current valuations, Alphabet trades at less than 31 times its trailing twelve-months earnings, at a discount of about 40% to its Internet peers. Despite this, margins and returns on equity and assets are among the best in the industry.

Facebook Inc (NASDAQ:FB)

– Shares held by Coatue as of June 30: 4.22 million

– Value of Coatue’s stake as of June 30: $483.27 million

Finally, there’s Facebook Inc (NASDAQ:FB), which saw Laffont’s fund trim its exposure by 26% over the second quarter, as the stock remained mostly flat – despite some ups and downs. Also long the social media behemoth was Alex Snow’s Lansdowne Partners, holding 5.58 million shares of Facebook after a 51% increase in its holding over the second quarter. Since the third quarter started, shares of Facebook Inc (NASDAQ:FB) have gained more than 11%. On Tuesday, shares tumbled amid news that Instagram rolled out a revision that allows users to search for specific wording/phrases and hide potentially offensive ones.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.