Tiger Global’s Trades During Q1 Included Selling Apple Inc. (AAPL), Buying News Corp (NWSA)

Tiger Global Management, which counts billionaire and Tiger Cub Chase Coleman among its investment managers, has filed its 13F for the first quarter of 2013. We track 13Fs from hundreds of hedge funds and other investors, and have found that they can be useful in developing investment strategies; for example, the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year (learn more about our small cap strategy). A more conventional use of 13Fs, of course, is to use them as a guide to what top managers are thinking, potentially helping investors come up with new investment ideas. Read on for a brief discussion of three things which we noticed in Tiger Global’s Q1 filing (which discloses many of its long equity positions as of the end of March) or compare the fund’s picks to previous filings.

Selling tech stocks. Tiger Global, known for being a tech-focused fund, cut its stake in Apple Inc. (NASDAQ:AAPL) by about 75% between January and March, down to 260,000 shares. In addition, the fund sold all of its shares of Yahoo! Inc. (NASDAQ:YHOO) and- at least according to the 13F- Yandex NV (NASDAQ:YNDX), a Russian Internet portal and search engine. We’ve noticed a number of top hedge funds selling Apple Inc. shares during the first quarter of the year, and certainly earnings at the company have been down. If Apple Inc. could manage to maintain its current business it would be cheap at a trailing P/E of 10, but Tiger Global is apparently doubtful that it will do so. Yandex NV has been reporting very strong results- revenue and earnings were up over 30% last quarter compared to the first quarter of 2012- though the market is already pricing in at least somewhat high growth and as a result the stock trades at a little over 30 times trailing earnings. Yahoo! Inc.’s stock price has soared 74% over the last year- in part due to asset sales, in part due to the increased value of its Asian businesses- and so the fund may merely be taking profits there. Billionaire Dan Loeb’s Third Point is a major shareholder in Yahoo (find Loeb’s favorite stocks).

News Corp. A number of hedge funds have been beefing up their stakes in News Corp (NASDAQ:NWSA) ahead of the media and entertainment company’s pending breakup, and Tiger Global was no exception as it closed March with 9 million shares of the stock in its portfolio. News Corp is coming off a fiscal quarter in which its revenue rose by 14% compared to the same period in the previous fiscal year, with earnings up at a higher (though unsustainably so) rate. With earnings multiples in the teens, the stock seems priced about right for its current business; however, there is the potential for the split of the company to unlock shareholder value as management of the resulting companies becomes more able to focus on their own operations. Hedge funds often like to invest in spinouts under a similar logic (read more about investing in spinouts).

Liberty Media. The fund reported ownership of 5.5 million shares of Liberty Media Corp (NASDAQ:LMCA), making the $15 billion market cap company Tiger Global’s new largest holding. Liberty Media Corp owns baseball’s Atlanta Braves and has ownership stakes in a number of other companies including DirecTV (NASDAQ:DTV). The company completed its spinout of Starz in January of this year, and recently acquired a large stake in Charter Communications; in doing so, it agreed to limit its ownership of Charter to less than 35% for the next few years and won four seats on the company’s Board of Directors.

We think that investors should be considering News Corp ahead of its breakup, as there is quite a bit of potential for value creation there and the business seems to have significant tailwinds behind it as is. Even with Tiger Global dumping Yandex NV and Apple Inc., there is enough interesting about either stock- the rapid growth of earnings at Yandex, and Apple Inc. facing quite low expectations in the market- that these companies are at least worth checking out in our view even if they do no turn out to be good picks at this time.