5 Stocks These Tech-Driven Tiger Cubs Both Have

Summary

  • Both gurus own Adobe

    ADBE
    , Dynatrace, Uber

    UBER
    , Microsoft and ServiceNow.

Legendary investor Julien robertson (Trades, Portfolio) is not only known for his leadership of Tiger Management, but also for having taken under his wing a group of proteges. These student investors, many of whom subsequently opened their own firms, are called “little tigers”.

Since they’ve been influenced by the same teacher, it’s no surprise that some of these guru fund managers have similar investing styles and even invest in some of the same stocks. An example of this is Chase coleman (Trades, Portfolio), who now heads Tiger Global Management, and Robert karr (Trades, Portfolio), director of Joho Capital. Both gurus are known for their investments in technology and online media stocks.

According to the Aggregate Portfolio, a Premium feature of GuruFocus, the two value investors both have positions in Adobe Inc. (ADBE, Financial), Dynatrace Inc.

DT
(DT, Financial), Uber Technologies Inc. (UBER, Financial), Microsoft Corp

MSFT
. (MSFT, Financial) and ServiceNow Inc

NOW
. (NOW, Financial) in the second quarter.

Adobe

The two gurus left their holdings in Adobe (ADBE, Financial) unchanged. Coleman owns 737,500 shares, while Karr owns 5,610. The weighting of the combined equity portfolio is 1.27%.

The San Jose, California-based software company has a market cap of $ 274.77 billion; its shares were trading around $ 578.75 on Tuesday with a price-to-earnings ratio of 47.76, a price-to-pound ratio of 19.07 and a price-to-sell ratio of 18.42.

The GF value line

VALUE
suggests that the stock is currently slightly overvalued based on its historical ratios, past performance and future earnings projections.

GuruFocus rated Adobe’s financial strength at 7 out of 10, thanks to a comfortable level of interest coverage and a strong Altman Z-Score of 16.55, implying it is in good standing. Return on invested capital also dwarfs the weighted average cost of capital, indicating that value is created as the business grows.

The company’s profitability was rated 9 out of 10 thanks to an expanding operating margin, strong returns on equity, assets and capital that outperform the majority of its competitors and a high Piotroski F-Score 8 out of 9, indicating that conditions are healthy. . Adobe also has a predictability rank of one in five stars. According to GuruFocus, companies with this rank are reporting an average of 1.1% per year over a 10-year period.

According to GuruFocus, Coleman has gained around 27.81% on his investment since Q2 2018, while Karr has gained 19.61% since the stake was created in Q4 2020.

PRIMECAP management (Trades, Portfolio) is the company’s largest shareholder guru with 1.54% of the shares outstanding. Other great investor gurus include Ken fisher (professions, portfolio), Steve mandel (professions, portfolio), Spiros Segalas (Trades, Portfolio), Pioneer Investments, Chuck akre (trades, portfolio) and Jeremy grantham (trades, portfolio).

Dynatrace

Karr increased his stake in Dynatrace (DT, Financial) by 50.91% to 1.1 million shares during the quarter, while Coleman left his stake unchanged at 500,000 shares. They have a combined equity portfolio weighting of 9.25% in the share.

The Waltham, Massachusetts-based company, which operates a software intelligence platform, has a market cap of $ 20.49 billion; its shares were trading around $ 72.83 on Tuesday with a price-to-earnings ratio of 280.96, a price-to-book ratio of 17.92 and a price-to-sell ratio of 27.72.

According to the chart Peter Lynch, the stock is overvalued.

Dynatrace’s financial strength has been rated 6 out of 10 by GuruFocus. In addition to adequate interest coverage, the company has a high Altman Z-Score of 11.75. The WACC, however, overshadows the ROIC, indicating that it may struggle to create value.

The company’s profitability has not performed as well, scoring a 2 out of 10 despite strong margins and returns surpassing more than half of its industry peers. Dynatrace also has a high Piotroski F-Score of 8.

GuruFocus data shows Coleman has gained around 222.73% on his investment since the third quarter of 2019, while Karr has generated a return of 47.37% since the fourth quarter of 2020.

Among the gurus invested in Dynatrace, Ron baron (Trades, Portfolio) holds the largest stake with 0.57% of the outstanding shares. Steven cohen (professions, portfolio), Jim simons (businesses, portfolio) ‘Renaissance Technologies, Paul Tudor Jones (professions, portfolio), Ray dalio (Trades, Portfolio), Pioneer Investments, Louis moore bacon (trades, portfolio) and Caxton Associates (Trades, Portfolio) also hold the share.

Uber Technologies

In the second quarter, Coleman reduced its Uber (UBER, financial) position by 0.35%, while Karr left its position unchanged at 20,950 shares. The Gurus have a combined stock portfolio weighting of 2.08% in the stock.

The San Francisco-based rideshare company, which also offers food and parcel delivery services, has a market cap of $ 87.7 billion; its shares were trading around $ 46.66 on Tuesday with a price-to-book ratio of 6.17 and a price-to-sell ratio of 7.06.

Based on the median price-to-sell ratio chart, the stock is currently overvalued.

GuruFocus rated Uber’s financial strength at 4 out of 10. Due to approximately $ 3.3 billion in new long-term debt issuance over the past three years, the company has low interest coverage. . The low Altman Z-Score of 1.78 also warns of the risk of bankruptcy if it does not improve its liquidity.

The company’s profitability did not perform as well, scoring a 1 out of 10 due to negative margins and returns that underperform the majority of its competitors. Uber has a low Piotroski F-Score of 2, which indicates that the operating conditions are in poor condition. The company has also experienced losses in operating profit as well as declines in earnings per share in recent years.

GuruFocus estimates that Coleman has gained 19.65% on his investment since the second quarter of 2019, while Karr has lost around 16.3% since the first quarter of the year.

With a 1.77% stake, Frank sands (Trades, Portfolio) is Uber’s largest guru shareholder. Other major investor gurus include Segalas, Philippe Laffont (professions, portfolio), Cohen, Daniel loeb (professions, portfolio), Lee ainslie (trades, portfolio) and David tepper (trades, portfolio).

Microsoft

While Coleman reduced its stake in Microsoft (MSFT, Financial) by 4.31% in the second quarter, Karr left its position of 743,200 shares unchanged. Together, the gurus have a combined equity portfolio weighting of 35.23%.

Based in Redmond, Washington, the software company founded by Bill Gates (Trades, Portfolio) has a market capitalization of $ 2.21 trillion; its shares were trading around $ 293.97 on Tuesday with a price-to-earnings ratio of 36.61, a price-to-book ratio of 15.6 and a price-to-sell ratio of 13.33.

The GF value line suggests that the stock is currently significantly overvalued.

UrofocMicrosoft’s financial strength was rated 6 out of 10 by GuruFocus thanks to a good cash-to-debt ratio of 1.92 and sufficient interest coverage. The company has a strong Altman Z-Score of 8.73, which suggests that it is in good shape even as assets are accumulating at a faster rate as revenue grows. ROIC also exceeds WACC, indicating good value creation.

The company’s profitability was rated 9 out of 10, thanks to an expanding operating margin, strong returns that outperform the majority of its industry peers, and a high Piotroski F-Score of 8. Having recorded a consistent profit and revenue growth, Microsoft also has a 2.5-star predictability ranking. GuruFocus claims that companies with this rank are earning 7.3% on average per year.

According to GuruFocus, Coleman has gained around 141.47% on its investment since Q4 2016. Karr has gained around 120.97% since Q1 2019.

Fisher is the company’s largest guru shareholder with a 0.33% stake. Other gurus with large positions in the stock include Pioneer Investments, PRIMECAP management (businesses, portfolio), Dodge & Cox, Baillie Gifford (professions, portfolio), Segalas, Mandel, Andreas Halvorsen (trades, portfolio) and Grantham.

Service now

During the quarter, Coleman increased its stake in ServiceNow (NOW, Financial) by 2.33%. Karr left his 6,690 shares untouched. The two gurus have a combined equity portfolio weighting of 2.78% in the stock.

The Santa Clara, California-based software company, which operates a cloud computing platform to help customers manage digital workflows and business operations, has a market capitalization of $ 124.19 billion ; its shares were trading around $ 629.51 on Tuesday with a price-to-earnings ratio of 746.33, a price-to-pound ratio of 37.92 and a price-to-sell ratio of 24.49.

According to the GF Value Line, the stock is currently slightly overvalued.

GuruFocus has rated ServiceNow’s financial strength at 6 out of 10. In addition to adequate interest coverage, the company has a high Altman Z-Score of 13.05, indicating that it is in good standing even though the assets are in good standing. accumulate at a faster rate as incomes increase. WACC also leads ROIC, suggesting the company is struggling to create value.

The company’s profitability was rated 3 out of 10, as its margins and returns surpass more than half of its competitors. ServiceNow also has a low Piotroski F-Score of 3 and a predictability rating of one star.

Among the gurus invested in ServiceNow, Sands holds the largest stake with 1.43% of the shares outstanding. Other major guru shareholders are Mandel and Halvorsen.

Portfolio composition

Coleman’s $ 53.16 billion equity portfolio of 142 stocks is heavily invested in the tech and consumer discretionary sectors. The New York-based guru’s hedge fund is known to focus on small-cap stocks and tech startups.

Like his fellow tiger, Karr’s $ 704 million stock portfolio of 22 stocks is heavily invested in the tech and consumer discretionary sectors. His business, which is now run as a family office, focuses on a concentrated number of investments and specializes in online media stocks.


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