Summary
- The investor curbed his positions in Snowflake, JD.com, Carvana, ServiceNow
NOW and Microsoft
MSFT .
- Several of the stocks are among his top holdings.
Chase Coleman (Trades, Portfolio), founder of Tiger Global Management and one of the late Julian Robertson (Trades, Portfolio)’s former “tiger cubs,” disclosed his second-quarter equity portfolio earlier this month.
As an early investor in Meta Platforms Inc.’s (META, Financial) Facebook and Spotify Technology SA (SPOT, Financial), the guru’s New York-based hedge fund is known for focusing on small-cap stocks and technology startups. He also searches for value opportunities among early-stage venture, late-stage venture, post-initial public offering and secondary market equities.
Keeping these considerations in mind, the 13F filing for the three months ended June 30 showed Coleman entered four new positions, sold out of 19 stocks and added to or trimmed a slew of other existing investments. His five largest trades for the quarter were reductions of the Snowflake Inc. (SNOW, Financial), JD.com Inc. (JD, Financial), Carvana Co. (CVNA, Financial), ServiceNow Inc. (NOW, Financial) and Microsoft Corp. (MSFT, Financial) holdings.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Snowflake
Impacting the equity portfolio by -4.05%, Coleman curbed the Snowflake (SNOW, Financial) stake by 68.88%, selling 4.71 million shares. The stock traded for an average price of $159.54 per share during the quarter.
He now holds 2.13 million shares total, representing his 10th-largest holding at 2.48% of the equity portfolio. It was previously his sixth-largest holding. GuruFocus estimates Coleman has lost 41.05% on the investment since establishing it in the third quarter of 2020.
Coleman’s holding history of Snowflake.
The Bozeman, Montana-based tech company, which offers cloud-based data storage and analytics services, has a $47.78 billion market cap; its shares were trading around $149.57 on Monday with a price-book ratio of 8.74 and a price-sales ratio of 32.62.
Since its initial public offering in September 2020, the stock has tumbled over 40%.
The stock has declined since its initial public offering.
GuruFocus rated Snowflake’s financial strength 8 out of 10 on the back of a comfortable level of interest coverage and a robust Altman Z-Score of 18.76, indicating it is in good standing.
The company is being weighed down, however, by negative margins and returns on equity, assets and capital that underperform a majority of competitors.
Of the gurus invested in Snowflake, Warren Buffett (Trades, Portfolio) has the largest stake with 1.93% of its outstanding shares. Frank Sands (Trades, Portfolio), Baillie Gifford (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Spiros Segalas (Trades, Portfolio) and Chuck Akre (Trades, Portfolio)’s firm also have significant positions in the stock.
JD.com
With an impact of -3.96% on the equity portfolio, the investor trimmed the JD.com (JD, Financial) position by 37.42%, shedding 18.25 million shares. Shares traded for an average price of $57.70 each during the quarter.
Coleman now holds a total of 30.53 million shares, which account for 16.44% of the equity portfolio and is his largest holding. GuruFocus data shows he has gained approximately 34.18% on the investment over its lifetime.
Coleman’s holding history of JD.com.
The Chinese e-commerce company has a market cap of $87.02 billion; its shares were trading around $55.79 on Monday with a price-book ratio of 2.67 and a price-sales ratio of 0.74.
The GF Value Line
The GF Value Line suggests the stock is significantly undervalued.
JD.com’s financial strength was rated 7 out of 10 by GuruFocus. In addition to adequate interest coverage, the high Altman Z-Score of 3.29 indicates the company is in good standing. The weighted average cost of capital, however, overshadows the return on invested capital, suggesting it is struggling to create value while growing.
The company’s profitability did not fare as well, scoring a 5 out of 10 rating due to margins and returns that are underperforming versus industry peers. JD.com also has a moderate Piotroski F-Score of 4 out of 9, meaning conditions are typical for a stable company. The predictability rank of one out of five stars, however, is on watch. According to GuruFocus research, companies with this rank return an average of 1.1% annually over a 10-year period.
With a 1.95% stake, Coleman remains JD.com’s largest guru shareholder. Other guru investors with large holdings include Dodge & Cox, Chris Davis (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Philippe Laffont (Trades, Portfolio).
Carvana
The guru slashed the Carvana (CVNA, Financial) holding by 98.68%, divesting of 8.42 million shares. The transaction had an impact of -3.77% on the equity portfolio. During the quarter, the stock traded for an average per-share price of $53.66.
He now holds 112,370 shares total, giving it 0.02% space in the equity portfolio. It was previously Coleman’s eighth-largest holding. GuruFocus says he has lost approximately 45% on the investment since establishing it in the first quarter of 2019.
Coleman’s holding history of Carvana.
The company headquartered in Tempe, Arizona, which operates an online platform for buying and selling used cars and is known for its multi-story car vending machines, has a $4.01 billion market cap; its shares were trading around $37.85 on Monday with a price-book ratio of 7.44 and a price-sales ratio of 0.23.
According to the GF Value Line, the stock, while undervalued, is a possible value trap currently. As a result, potential investors should conduct thorough research before making a decision.
The GF Value Line suggests the stock is a possible value trap.
Carvana’s financial strength and profitability were both rated 3 out of 10 by GuruFocus. As a result of the company issuing new long-term debt over the past several years, it has weak interest coverage. The Altman Z-Score of 1.61 also warns it could be at risk of bankruptcy since assets are building up at a faster rate than revenue is growing and the Sloan ratio is indicative of poor earnings quality. Further, the WACC eclipses the ROIC, so the company is struggling to create value.
While the operating margin is expanding, the company’s returns are negative and underperform a majority of competitors. Carvana also has a low Piotroski F-Score of 1, indicating business conditions are in poor shape. It has also recorded losses in operating income in recent years.
Baillie Gifford (Trades, Portfolio) is Carvana’s largest guru shareholder with a 10.31% stake. Steven Cohen (Trades, Portfolio), Simons’ firm, Lee Ainslie (Trades, Portfolio), Bill Gates (Trades, Portfolio)’ foundation, Laffont and Paul Tudor Jones (Trades, Portfolio) also own the stock.
ServiceNow
Coleman shaved 54.35% off the ServiceNow (NOW, Financial) stake, selling 1.33 million shares. The transaction impacted the equity portfolio by -2.78%. The stock traded for an average price of $477.87 per share during the quarter.
The guru now holds a total of 1.12 million shares, which make up 4.45% of the equity portfolio and is the seventh-largest holding. He has gained approximately 15.64% on the investment so far according to GuruFocus.
Coleman’s holding history of ServiceNow.
The Santa Clara, California-based software company, which operates a cloud computing platform to help customers manage digital workflows and enterprise operations, has a market cap of $92.42 billion; its shares were trading around $457.52 on Monday with a price-earnings ratio of 502.78, a price-book ratio of 22.04 and a price-sales ratio of 14.09.
Based on the GF Value Line, the stock appears to be significantly undervalued currently.
The GF Value Line suggests the stock is significantly undervalued.
GuruFocus rated ServiceNow’s financial strength 7 out of 10. In addition to adequate interest coverage, the company has a high Altman Z-Score of 9.10, indicating it is in good standing even though assets are building up at a faster rate than revenue is growing. The WACC also exceeds the ROIC, meaning the company is struggling to create value.
The company’s profitability did not fare as well with a 4 out of 10 rating even though its margins and returns outperform over half of industry peers. ServiceNow also has a moderate Piotroski F-Score of 5 and a one-star predictability rank.
Of the gurus invested in ServiceNow, Frank Sands (Trades, Portfolio) has the largest stake with 1.34% of its outstanding shares. Fisher and Steve Mandel (Trades, Portfolio) also have notable positions in the stock.
Microsoft
The investor whittled down the Microsoft (MSFT, Financial) stake by 29.46%, or 2.15 million shares. The transaction had an impact of -2.49% on the equity portfolio. During the quarter, shares traded for an average price of $271.99 each.
Coleman now holds 5.16 million shares, reflecting 11.11% of the equity portfolio and its second-largest position. GuruFocus estimates he has gained 142.99% on the long-held investment.
Coleman’s holding history of Microsoft.
The software company, which is headquartered in Redmond, Washington, has a $2.07 trillion market cap; its shares were trading around $277.79 on Monday with a price-earnings ratio of 28.79, a price-book ratio of 12.43 and a price-sales ratio of 10.53.
The GF Value Line suggests the stock is fairly valued currently.
The GF Value Line suggests the stock is fairly valued.
Microsoft’s financial strength was rated 8 out of 10 by GuruFocus, driven by sufficient interest coverage and a high Altman Z-Score of 8.35. The ROIC also outshines the WACC, so value creation is occurring.
The company’s profitability scored a 10 out of 10 rating on the back of an expanding operating margin, strong returns that top a majority of competitors and a high Piotroski F-Score of 7, indicating conditions are healthy. Consistent earnings and revenue growth contributed to Microsoft’s 3.5-star predictability rank. GuruFocus found companies with this rank return, on average, 9.3% annually.
With a 0.38% stake, Fisher is the company’s largest guru shareholder. Other top guru investors include PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Baillie Gifford (Trades, Portfolio), Segalas, Al Gore (Trades, Portfolio), Simons’ firm, Mandel, Jeremy Grantham (Trades, Portfolio) and Andreas Halvorsen (Trades, Portfolio).
Additional trades and portfolio composition
During the quarter, the guru entered small positions in Alphabet Inc. (GOOGL, Financial), Samsara Inc. (IOT
A majority of the guru’s $11.93 billion equity portfolio, which is composed of 73 stocks, is invested in the technology and consumer cyclical sectors.
Overview of Coleman’s equity portfolio by sector.
Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.
Source: https://www.forbes.com/sites/gurufocus/2022/08/26/chase-colemans-tiger-global-carves-up-top-tech-retail-holdings/