In this article we take a look at Tesla Inc (TSLA) and 9 Other Consumer Discretionary Stocks That Have Wowed Billionaire Philippe Laffont. Click to skip ahead for a quick look at Tesla Inc (TSLA) and 4 Other Consumer Discretionary Stocks That Have Wowed Billionaire Philippe Laffont.
Philippe Laffont’s Coatue Management is a New York-based hedge fund that was founded in 1999 by brothers Philippe and Thomas Laffont. In addition to its New York base of operations, Coatue also has offices in Hong Kong, San Francisco, and Shanghai, and is in the process of opening a branch in London.
Philippe Laffont, whose personal wealth is estimated at $6.5 billion by Forbes and which has tripled in the last year alone, runs the tech-focused investment firm, which manages about $25 billion in assets. Laffont graduated from MIT with a computer science degree in 1989 and became hooked on investing in the early 1990’s before eventually landing at Julian Robertson’s Tiger Management.
The “Tiger Cub”, as Tiger Management’s former employees who eventually launched their own funds are known, raised $45 million in 1999 to get Coatue Management off the ground and the fund hasn’t looked back since. Laffont has become adept at investing in early stage tech companies well before their IPOs, doing so with the likes of Snap, Lyft, and Instacart.
Beyond his broader investments in tech, Laffont subscribes to the idea of investing in themes, several of which are notable when perusing his fund’s 13F portfolio. The most notable is his love for electric vehicle stocks. Other themes include China, AI, and facial recognition.
At the end of Q1, Coatue Management’s 13F portfolio was valued at $13.7 billion, a far cry from its $22.6 billion valuation at the end of 2022. Laffont unloaded dozens of stocks from his portfolio during Q1, while adding just a dozen new ones in their place. Coatue’s 13F portfolio contained just 58 long positions in it as a result, with the vast majority of its capital (64%) invested in the fund’s top 10 stock picks.
In this article we’ll take a look at 10 consumer discretionary stocks, many of which have strong technological bases, that the billionaire money manager loves.
The following data is gathered from Coatue Management‘s latest 13F filing with the SEC. We follow hedge funds like Coatue Management because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.
All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2022 reporting period.
Tesla Inc (TSLA) and 9 Other Consumer Discretionary Stocks That Have Wowed Billionaire Philippe Laffont
10. Lucid Group, Inc. (NASDAQ:LCID)
Value of Coatue Management‘s 13F Position: $75.4 million
Number of Hedge Fund Shareholders: 16
Uber Technologies, Inc. (NYSE:UBER), Tesla, Inc. (NASDAQ:TSLA), and Rivian Automotive, Inc. (NASDAQ:RIVN) are among the other stocks that feature prominently in Coatue’s 13F portfolio. Needless to say, Coatue Management is a big believer in electric vehicle stocks, so it’s not at all surprising to see Phillippe Laffont’s fund take another stake in Lucid Group, Inc. (NASDAQ:LCID). Coatue bought just under 3 million shares of LCID during Q1, retaking a stake in the company after selling out of its former stake of 2.81 million shares in Q4.
Lucid Group, Inc. (NASDAQ:LCID) went public last July through an SPAC merger and delivered its first electric vehicles to customers just a few months later, in October. The California company delivered just 360 vehicles during the first quarter, yet managed $57.7 million in revenue and lost just $0.05 per share. Lucid reported delivering another 300 vehicles in April and anticipates delivering close to 10,000 vehicles this year, a figure that Morgan Stanley considers aggressive.
Lucid Group, Inc. (NASDAQ:LCID), which manufactures high-end electric sports cars, announced a price hike of up to $15,000 across its vehicles back in May. In addition to its 30,000 reservations for its Lucid Air, which will cost $155,000 following the price hike (though the company will honor the price of its reservations), the company also has a deal with Saudi Arabia to deliver up to 100,000 vehicles over the next decade.
9. XPeng Inc. (NYSE:XPEV)
Value of Coatue Management‘s 13F Position: $77.9 million
Number of Hedge Fund Shareholders: 26
Speaking of EV stocks, Coatue Management also owns a sizable stake in Chinese EV maker XPeng Inc. (NYSE:XPEV), holding 2.82 million shares of the company as of March 31. One of the 10 Auto Companies that Sold the Most EVs in 2021, XPend got off to an even stronger start in 2022, growing EV deliveries by 115% year-over-year in January to just under 13,000 units.
The pace continued to pick up throughout Q1, as XPeng Inc. (NYSE:XPEV) grew vehicle deliveries by 159% year-over-year during the quarter. As with Lucid Group above, XPeng also launched price increases across its vehicles in late March, raising their sticker price by between RMB 10,000 and RMB 20,000. The company was anticipating May orders returning to pre-price-raise levels, excluding some cities that have endured massive Covid lockdowns.
In addition to its P7 model becoming the first battery EV model among emerging Chinese automakers to hit 100,000 units of production volume, XPeng Inc. (NYSE:XPEV) is also nearing the launch of its flagship G9 SUV model. Housing an industry-leading 800-volt powertrain, Xpeng expects its SUV to become a blockbuster in its category, with the first deliveries expected to be made in Q3.
8. Bath & Body Works, Inc. (NYSE:BBWI)
Value of Coatue Management‘s 13F Position: $154 million
Number of Hedge Fund Shareholders: 57
Coatue Management maintained its 3.12 million share position in Bath & Body Works, Inc. (NYSE:BBWI) during Q1. Hedge funds are overweight BBWI, owning about 36% of the company’s common stock. Shares of the specialty retailer, which sells bathing and personal care products, have been battered in 2022, losing over 60% of their value.
It’s been a sharp turnaround for Bath & Body Works, Inc. (NYSE:BBWI) shares, which were among the top performers on the market last year. In 2022, they stand among the worst performers on the S&P 500, as inflation and recession fears mingle with company specific concerns like the ongoing investments needed in the wake of the Victoria’s Secret spinoff.
Bath & Body Works, Inc. (NYSE:BBWI) was recently initiated with an ‘Overweight’ rating by Piper Sandler, alongside a $58 price target. Analyst Korinne Wolfmeyer likes the company’s “repeat business model” and how well it performed during the pandemic. She’s also bullish on the company’s planned expansions into hair and skin care products, two beauty categories that she says are seeing strong uptake.
7. JD.com, Inc. (NYSE:JD)
Value of Coatue Management‘s 13F Position: $215 million
Number of Hedge Fund Shareholders: 59
Coatue Management slashed its JD.com, Inc. (NYSE:JD) position by 49% to 3.71 million shares during Q1. The Chinese e-commerce titan nonetheless ranks among the top 20 long positions held by Laffont’s fund as of March 31, as well as its favorite Chinese stock. Other Tiger Cubs that love JD.com include Chase Coleman’s Tiger Global and Andreas Halvorsen’s Viking Global.
The second-largest ecommerce company in China, JD.com, Inc. (NYSE:JD) grew sales by 28% last year and has continued to improve its operational efficiency. Its ecommerce margin expanded to 3.1% in 2021 compared to just 0.9% in 2016. That’s allowed its non-GAAP net income to balloon to 17.2 billion yuan last year from just 1 billion yuan in 2016.
While JD.com, Inc. (NYSE:JD)’s growth rate continued to slow in Q1 of this year, falling to 18% year-over-year, it does have some faster-growing divisions like JD Logistics and JD Health which should prevent the overall company’s growth from falling too rapidly. JD shares are also dirt cheap right now given the uncertainty of investing in Chinese stocks, trading at a P/S of just 0.7x, less than half its five-year average.
6. Peloton Interactive, Inc. (NASDAQ:PTON)
Value of Coatue Management‘s 13F Position: $228 million
Number of Hedge Fund Shareholders: 44
Closing out the first half of the list of consumer discretionary stocks that have wowed Philippe Laffont is Peloton Interactive, Inc. (NASDAQ:PTON). Laffont supercharged his fund’s stake in the home workout equipment manufacturer during Q1, taking advantage of the extreme weakness in the stock to grow Coatue’s holding by 1,873% to 8.61 million shares. Peloton shares have fallen off a cliff over the last year, losing 94% of their value.
Peloton Interactive, Inc. (NASDAQ:PTON) has made a number of strategic blunders that have only exacerbated the woes surrounding the flagging demand for the company’s connected home workout machines. One of the biggest was mistaking the pandemic boom for its products as representing a new normal. The company rapidly scaled production and overinvested in its business, which came back to haunt it when sales started drying up.
The company also made several other gaffes, including flip-flopping on price cuts multiple times and disgruntling investors by raising more capital just two weeks after the company claimed it wouldn’t need to. Those and other blunders led to the eventual resignation of the company’s co-founder and longtime CEO in early 2022, though he’s remaining on as executive chairman, which hasn’t necessarily given the company the fresh leadership start that it needed.
Horos Asset Management made a case for why Peloton Interactive, Inc. (NASDAQ:PTON) shares have cratered so sharply in the last year, saying it didn’t understand the company’s valuation in its Q1 2022 investor letter:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Peloton Interactive is the other company whose valuations we did not understand and whose share price has also declined drastically in the last year and a half.”
Uber Technologies, Inc. (NYSE:UBER), Tesla, Inc. (NASDAQ:TSLA), and Rivian Automotive, Inc. (NASDAQ:RIVN) are among a crowded list of vehicle-related stocks that Philippe Laffont loves. Check out his conviction in them by following the link below.
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Disclosure: None. Tesla Inc (TSLA) and 9 Other Consumer Discretionary Stocks That Have Wowed Billionaire Philippe Laffont is originally published at Insider Monkey.