Tiger Global Management LLC is a highly secretive hedge fund firm founded by billionaire Charles “Chase” Coleman in 2001. The $20 billion asset manager, which also holds stakes in private firms such as Indian e-commerce firm Flipkart and transportation service Uber Technologies, has recently undergone one of the biggest reorganizations since its foundation, as several partners departed in 2015. Feroz Dewan, the man who had been in charge of the hedge fund business on a day-to-day basis left Tiger Global to start his own asset management firm.
Trustworthy news outlets point out that Tiger Global Management has generated an annualized return of more than 20% since inception, so retail investors would be wise to keep close tabs on the firm’s quarterly moves. The New York-based asset manager earned 6.8% in 2015, while most other hedge fund vehicles lost a great deal of money during that tumultuous year. However, Chase Coleman’s Tiger Global did not perform very well during the first quarter of the year, as the fund lost a troubling 21% in the quarter. The disappointing performance was partially driven by the firm’s largest equity investments in several well-known technology stocks, which are discussed in this article. Now then, let’s have a look at the performance of Tiger Global Management’s five-largest equity holdings during the second quarter of 2016 and see if the fund’s performance appears to have turned the corner.
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#5. Apple Inc. (NASDAQ:AAPL)
– Shares Owned by Tiger Global Management (as of March 31): 5.66 Million
– Value of Tiger Global Management’s Holding (as of March 31): $616.58 Million
– Q2 Return: -11.8%
Tiger Global Management cut its stake in Apple Inc. (NASDAQ:AAPL) by 4.94 million shares during the first three months of 2016, ending the March quarter with 5.66 million shares valued at $616.58 million. The Apple position accounted for 8.9% of the value of the hedge fund’s public equity portfolio at the end of March. The shares of the iPhone maker fell by nearly 12% in the second quarter of 2016 and are down by 6% this year. Earlier this year, iPhone sales declined for the first time since the product’s launch in 2007, which is worrisome given that the iPhone makes up roughly two-thirds of the company’s top line. The Cupertino-based company needs to introduce a new innovative product to inject growth and attract investor optimism, but rumors around Apple’s upcoming iPhone 7 appear to be disappointing both investors and customers. Reportedly, there are minimal external differences between the company’s rumored iPhone 7 and the current iPhone 6S, so iPhone sales may keep falling in the quarters ahead until Apple can deliver an innovation people feel compelled to have. Ken Fisher’s Fisher Asset Management cut its stake in Apple Inc. (NASDAQ:AAPL) by 1 % during the June quarter, to 11.31 million shares.
#4. Amazon.com Inc. (NASDAQ:AMZN)
– Shares Owned by Tiger Global Management (as of March 31): 1.04 Million
– Value of Tiger Global Management’s Holding (as of March 31): $618.72 Million
– Q2 Return: 22.6%
Tiger Global reduced its exposure to Amazon.com Inc. (NASDAQ:AMZN), it’s top holding on December 31, by 67% during the January-to-March period, remaining with 1.04 million shares, with the trimmed stake valued at $618.72 million on March 31. The decision was a costly one, as Amazon shares gained an impressive 22% during the second quarter. Moreover, the stock was the only one in Tiger Global’s top-5 that delivered positive returns during the period.
Back-to-school sales are anticipated to reach $540 billion this year, up from $523 billion recorded in 2015, and research firm Customer Growth Partners estimates that Amazon will account for at least one-quarter of this year’s $17 billion increase in back-to-school sales. Although the increase in back-to-school sales is expected to be below the 4%-plus increases recorded in the past two years, the online retailer will most likely get a decent boost from the sustained shift towards online shopping. Stephen Mandel’s Lone Pine Capital was the owner of 1.99 million shares of Amazon.com Inc. (NASDAQ:AMZN) at the end of March.
The second page of this article will discuss the performance of Tiger Global Management’s three-largest equity holdings during the second quarter.