Why These Billionaire Mandel Picks Deserve Your Attention

Billionaire Stephen Mandel is the founder of one of the world’s largest hedge funds in the world – Lone Pine Capital. This fund had a total long 13F portfolio value of approximately $22 billion as per the latest filing with information technology being the biggest focus sector. Stephen Mandel is a “Tiger Cub” having started Lone Pine Capital in 1997 and has a stellar track record of significantly outperforming the broader markets. His fund bought 11 new stocks during the third quarter while completely selling out 9 stocks. Unlike other large hedge funds, Stephen Mandel maintains a fairly concentrated portfolio with around 40 holdings and the top 10 stocks accounting for 44.7% of the total portfolio value. Following Stephen’s stock moves can be extremely rewarding for investors given his market beating performance over the years.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Lone Pine Capital reduced its stake in athletic apparel maker Lululemon Athletica (NASDAQ:LULU) to 1.5% of the portfolio value down from 2.5% during the second quarter. Stephen Mandel was the biggest hedge fund seller of this stock during the third quarter as it pared its holding to $340 million. This still left Lone Pine Capital as one of the biggest owners of the company with a more than 4% equity stake.  Israel Englander’s Millennium Management and Janus Capital were the other large hedge funds which sold a substantial number of Lululemon Athletica (NASDAQ:LULU) shares. Lululemon recently reported very good quarterly results with revenues increasing by 13% year over year and EPS rising to 50 cents per share, up from just 38 cents in the year ago quarter. The company also announced a $100 million buyback authorization. Analysts are in general bullish on the stock with half of the 32 analysts covering the stock rating Lululemon Athletica (NASDAQ:LULU) as a buy. At the end of the third quarter the number of funds that we track owning Lululemon Athletica (NASDAQ:LULU) declined slightly to 26 from 28 in the quarter earlier.

Click next to see more of Mandel’s picks.