- The two investors are known for their focus on technology.
- They both have positions at Microsoft
in the first quarter.
Legendary investor Julian Robertson (Trades, Portfolio) is not only known for his leadership in Tiger Management, but also for getting a group of protégés under his wing. These student investors, many of whom have opened up their own practices, are known as “tiger cubs.”
Since they are influenced by the same guru, it is not surprising 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), head of Joho Capital. Both gurus are known for their investments in tech stocks and online media.
According to Aggregated Portfolio, a Premium GuruFocus feature based on 13F filings, the two value investors both have positions in Microsoft Corp. (MSFT, Financial), Uber Technologies Inc. (UBER, Financial) and ServiceNow Inc. (NOW, Financial) in the three months ended March 31.
Investors should be aware that 13F offerings do not provide a complete picture of a company’s holdings because the reports only include its positions on U.S. stocks and U.S. deposit receipts, but may still they also provide valuable information. Further, the reports only reflect trades and holdings at the most recent portfolio filing date, which may or may not be held by the reporting company today or even when this article was published.
While Coleman held his stake in Microsoft (MSFT, Financial) by 13.79% in the first quarter, Karr left his 618,000-share position unchanged. Together, the gurus have a combined equity portfolio weight of 35.66% in the stock.
The Redmond, Washington -based software company founded by Bill Gates (Trades, Portfolio) has a $ 2.02 trillion market cap; its shares traded around $ 273.59 on Monday with a price-earnings ratio of 28.19, a price-book ratio of 12.40 and a price-sales ratio of 10.60.
The GF Value Line
GuruFocus rated Microsoft’s financial strength 8 out of 10 behind adequate interest coverage and a solid Altman Z-Score of 8.63, suggesting that it is in good shape even as assets grow in faster rate than revenue growth. The return on invested capital far exceeds the weighted average cost of capital, indicating that good value occurs as the company grows.
The company’s profitability has improved with a 10 to 10 rating, driven by a growing operating margin, strong equity earnings, assets and capital that outperform most competitors and a high Piotroski F- Score 8 out of 9, which means business conditions are healthy. Having recorded consistent revenue and revenue growth, Microsoft also has a predictability rank of 2.5 out of five stars. According to GuruFocus research, companies with this ranking return an average of 7.3% annually over 10 years.
GuruFocus said Coleman has earned approximately 141.72% on his investment since the fourth quarter of 2016. Karr has earned approximately 112.48% since the first quarter of 2019.
Of the gurus invested in Microsoft, Ken Fisher (Trades, Portfolio) has the largest stake with 0.37% of its remaining shares. PRIMECAP Management (Trades, Portfolio), Dodge & Cox, Baillie Gifford (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Steve Mandel (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio) )), First Eagle Investment (Trades, Portfolio), Mairs and Power (Trades, Portfolio) and Hotchkis & Wiley, among others, also have significant positions in the stock.
In the first quarter, Coleman reduced his Uber (UBER, Financial) stake by 93.1%, while Karr did not change his holdings at 26,950 shares. Gurus have a combined equity portfolio weight of 0.31% in the stock.
The San Francisco-based ridesharing company, which also offers food and package delivery services, has a market cap of $ 47.42 billion; its shares traded at approximately $ 24.87 on Monday with a book-price ratio of 5.31 and a price-sales ratio of 2.19.
According to the GF Value Line, the stock, while undervalued, is a possible value trap at present. Consequently, potential investors should conduct thorough research before making a decision.
Uber’s strength and profitability are both rated 4 out of 10 by GuruFocus. As a result of issuing approximately $ 2.9 billion in new long-term debt over the past three years, the company has poor interest coverage. The low Altman Z -Score of -0.05 also warns that it may be at risk of bankruptcy if it does not improve its liquidity.
The company is also weighed down by negative margins and returns that do not perform most of its peers in the industry. Uber has a low Piotroski F-Score of 3, indicating that its operating conditions are not good. The company has also recorded operating income losses as well as declines in revenue per share over the past few years.
GuruFocus estimates that Coleman has gained 4.67% of its investment since the second quarter of 2019, while Karr has lost nearly 53.45% since the first quarter of 2021.
At 1.22% stake, Fisher is Uber’s largest shareholder. Other top guru investors include Frank Sands (Trades, Portfolio), Segalas, Halvorsen, Philippe Laffont (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Larry Robbins (Trades, Portfolio), Lee Ainslie (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio) and David Tepper (Trades, Portfolio).
Coleman raised its ServiceNow (NOW, Financial) stake by 10.82% in the quarter. Karr left his 6,202-share holding untouched. The two gurus have a combined equity portfolio weight of 5.60% in the stock.
The Santa Clara, California -based software company, which operates a cloud computing platform to help customers manage digital workflows and enterprise operations, has a $ 98.72 billion market cap; its shares traded at approximately $ 496.10 on Monday with a price-earnings ratio of 447.71, a price-book ratio of 24.64 and a price-sales ratio of 15.99.
Based on the GF Value Line, the stock looks somewhat undervalued at the moment.
GuruFocus rated ServiceNow’s financial strength of 7 out of 10. In addition to adequate interest coverage, the company has a high Altman Z-Score of 9.19, indicating that it is in good standing even though the assets grow at a faster rate than income growth. WACC also goes beyond ROIC, suggesting that the company is struggling to create value.
The company’s profitability isn’t great, earning a 4 out of 10 rating behind margins and returning that to more than half of its competitors. ServiceNow has an average Piotroski F-Score of 5, indicating that operations are typical for a stable company, as well as a one-star predictability ranking. GuruFocus data found that companies with this ranking return an average of 1.1% annually.
GuruFocus data shows that Coleman has gained 20.96% on his investment since the third quarter of 2017, while Karr has recorded a return of 14.76% since the fourth quarter of 2020.
Sands has the largest stake in ServiceNow with 1.36% of its remaining shares. Coleman, Mandel and Fisher also have prominent positions in the stock.
Coleman’s $ 26.64 billion equity portfolio, consisting of 88 stocks, is primarily invested in the technology and consumer cyclical sectors. The guru’s New York -based hedge fund is known for focusing on small -cap stocks and technology startups.
Like his fellow tiger cub, Karr’s $ 701 million equity portfolio, consisting of 19 stocks, is a substantial investment in technology, consumer cyclical, core materials and industry sectors. His company, which is now operated as a family office, focuses on a concentrated number of investments and specializes in online media stocks.
I/we do not have positions in any of the stocks mentioned, and have no plans to purchase any new positions in the stocks mentioned within the next 72 hours.