Chase Coleman’s top five purchases

The founder of Tiger Global Management and one of Julian Robertson’s former “tiger cubs” Chase Coleman (trading, portfolio) disclosed his third-quarter portfolio earlier this week .

As an early investor in Facebook (NASDAQ: FB) and Spotify Technology SA (NYSE: SPOT), the New York-based hedge fund is known for focusing on small stocks and technology startups. He also searches for value opportunities in early-stage venture capital, late-stage venture capital, post-initial public offerings and secondary market stocks.

With these considerations in mind, Coleman entered 20 new positions during the quarter, sold three stocks, and added or subtracted many other stocks. His five largest transactions this quarter included increased bets on Pinduoduo Inc. (NASDAQ: PDD), ServiceNow Inc. (NYSE: NOW) and CrowdStrike Holdings Inc. (NASDAQ: CRWD), and Snowflake Inc. (NYSE: SNOW) and GSX Techedu Inc. (New York Stock Exchange: GSX).

Pinduoduo

Coleman’s impact on the stock portfolio was 1.7%, which expanded Pinduoduo’s shares by 133.13% and purchased 8.15 million shares. The average trading price of the stock during the quarter was $85.82 per share.

He now owns 14.3 million shares in total, accounting for 2.97% of the stock portfolio. It is now his tenth largest position. GuruFocus estimates that since its establishment in the third quarter of 2018, he has received 114.67% of the investment.

The Chinese company operates an online market with a market capitalization of US$162.95 billion; its stock traded at approximately US$138.02 on Tuesday, with a P/E ratio of 39.03 and a P/S ratio of 25.62.

The price chart shows that the stock’s trading price is higher than its median price ratio and its median selling price, which indicates that the stock is overvalued.

GuruFocus rated Pinduoduo’s financial strength at 10 (out of 10) against the backdrop of a high cash-to-debt ratio of 5.15 and a high Altman Z-Score of 9.96 (its good reputation).

The company’s profitability is not satisfactory, earning 1 out of 10 points. Despite being suppressed by unfavorable profits and lower returns than most competitors, Pinduoduo’s Piotroski F-Score is 6, which is a medium level, which means that business conditions are stable.

Coleman is the company’s largest master shareholder, owning 1.19% of the shares. Other stock-owned experts include Jim Simons (trading, portfolio)’s Renaissance Technologies, Ken Fisher (trading, portfolio), Ray Dalio (trading, portfolio), Ron Baron (trading, portfolio) and Caxton Associates (trading, portfolio).

Current service

The expert had a 1.04% impact on the stock portfolio, thereby increasing his stake in ServiceNow by 105.93% and purchasing 765,900 shares. The average trading price of the stock during the quarter was $446.12.

Coleman currently holds a total of 1.48 million shares, accounting for 2.03% of the equity portfolio. GuruFocus data shows that since its establishment in the third quarter of 2017, he has received about 46.05% of the investment.

The Santa Clara, California-based software company has a market value of $98.93 billion; its stock traded at about $507.42 on Tuesday, with a price-to-earnings ratio of 143.66, a price-to-book ratio of 37, and a market-sales ratio of 24.09.

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

Driven by adequate interest coverage and a strong Altman Z score of 12.45, GuruFocus rated ServiceNow’s financial strength as 6 out of 10. Since the rate of asset accumulation is faster than the rate of revenue growth, the company’s efficiency may decline. The return on invested capital exceeds the weighted average cost of capital, indicating that good value has been created.

The company’s profit margin scored 4 out of 10 points on the basis of profit margin, and its return rate exceeded half of its industry peers. ServiceNow’s Piotrsoki F score is also 6.

Among the experts investing in ServiceNow, Frank Sanders (Trades, Portfolio) has the largest share, holding 1.64% of the outstanding shares. Other top shareholders include Steve Mandel (transaction, portfolio), Spiros Segalas (transaction, portfolio), Pioneer Investments (transaction, portfolio), Fisher, David Carlson (transaction, portfolio), Baron, Joel Greenblatt (transaction, investment) Portfolio), Dalio, Mario Gabelli (industry, portfolio), Paul Tudor Jones (industry, portfolio), Louis Moore Bacon (industry, portfolio), First Pacific Advisors (industry, portfolio), Caxton Associates (industry, investment Portfolio) and Lee Ainslie (industry, portfolio)).

Crowd strike

Investors bought 2.5 million shares and increased their holdings of CrowdStrike shares by 49.48%. The impact of the transaction on the stock portfolio was 0.96%. During the quarter, the average trading price of the stock was $116.52 per share.

Coleman currently holds 7.5 million shares, accounting for _ of the stock portfolio. According to GuruFocus, he has received approximately 46.19% of the investment since its establishment in the second quarter of 2019.

The cybersecurity company is headquartered in Sunnyvale, California, with a market capitalization of $29.41 billion; its stock traded at approximately $133.96 on Tuesday, with a price-earnings ratio of 37.13 and a price-to-sales ratio of 43.26.

According to the price chart, the stock seems to be overvalued because its trading price is higher than the median price and price-to-sale ratio.

GuruFocus rated CrowdStrike’s financial strength as 7 out of 10. In addition to its high cash-to-debt ratio, the company is backed by a strong Altman Z score of 21.12. However, the Sloan ratio shows that the quality of its earnings is poor.

The company was also overwhelmed by negative profit margins and returns, the latter underperforming most competitors.

Coleman owns 3.43% of the outstanding shares and is the largest master shareholder of CrowdStrike. Philippe Laffont (trading, portfolio), Segalas, Simons, Pioneer, Baron, Bacon, Steven Cohen (trading, portfolio), PRIMECAP Management (trading, portfolio), Robertson, Jones, Greenblatt and First Pacific also have stock positions.

snowflake

Coleman invested in 1.25 million Snowflake shares and allocated 0.88% of his stock portfolio to them. The average trading price of the stock during the quarter was $238.10 per share.

The San Mateo, California-based company operates a cloud-based data warehouse platform with a market capitalization of US$68.49 billion; its stock traded at approximately US$245.93 on Tuesday, with a market-to-book ratio of 90.37 and a market-sales ratio of 200.43.

Since the initial public offering in September, the stock has fallen nearly 5%.

GuruFocus rated Snowflake’s financial strength as 5 out of 10. Although the company’s interest coverage ratio is modest, its Sloan ratio shows that its earnings quality is poor.

Buffett (transaction, portfolio) is Snow’s largest grand master shareholder, owning 2.21% of the shares. Other top master investors include Laffont, Sands, Mandel, Andreas Halvorsen (trading, portfolio), Baron, Pioneer, Jones, Cohen, Robert Karr (trading, portfolio) and Bacon.

GSX Techedu

The master acquired 3.02 million shares of GSX Techedu, which represented 0.77% of the stock portfolio. During the quarter, the average price of stock transactions was $88.55 per share.

This Chinese company provides technology-driven education services and has a market value of $16.93 billion. Its stock traded at approximately $70.85 on Tuesday, with a P/E ratio of 364.32, a P/B ratio of 77.3, and a P/S ratio of 27.88.

The Peter Lynch chart shows that the stock is overvalued.

GuruFocus rated GSX Techedu’s financial strength as 6 out of 10. Although it has a satisfactory interest coverage ratio and a strong Altman Z-Score of 22.68, the Sloan ratio shows poor earnings quality.

The company’s profitability is also not very good, getting 3 points out of 10. Although the company’s operating profit margins are underperforming compared with its peers, its returns are strong and outperform its competitors.

Coleman is the company’s largest shareholder, owning 1.27% of the shares. Dalio, David Swenson and Caxton Associates (trading, portfolio) also have stock positions.

Other transactions and portfolio composition

Coleman also created other new positions during the quarter, including KE Holdings Inc. (BEKE), Sumo Logic Inc. (SUMO), BigCommerce Holdings Inc. (BIGC), Jamf Holding Corp. (JAMF) and JFrog Ltd. (FROG) .

More than half of the company’s $35.53 billion stock portfolio (including 90 stocks) invests in technology and cyclical consumers.

For the three months ended September 30, Coleman’s five largest shares were JD.com Inc. (NASDAQ: JD), Microsoft Corp. (NASDAQ: MSFT), Sunrun Inc. (NASDAQ: RUN), Facebook and Amazon.com Inc. (NASDAQ: AMZN).

Disclosure: No position.

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