Stephen Mandel’s Lone Pine Capital was active during the fourth quarter bulking up on two stocks with substantial growth opportunities in e-commerce and software as a service (SAAS). The Greenwich CT based hedge fund added Amazon.com Inc. (AMZN) to its portfolio during the fourth quarter while nearly doubling the size of its position in Adobe Systems, Inc. (ADBE). The hedge fund also sold its entire position in Comcast Corp. (CMSCA) during the fourth quarter.
Lone Pine is a Tiger Cub, the name given to a group of hedge funds that origins can be traced back to famed investor Julian Robertson and Tiger Management. According to WhaleWisdom, Lone Pine’s equity portfolio has a market value of $19.155 billion as of December 31, 2017, a decline of roughly 6.8 percent from the third quarter.
Amazon
The hedge fund bought nearly 770,000 shares of Amazon during the quarter, a market value of approximately $900 million, making it the 7th largest holding in the portfolio. It is a bet that has already paid off massively. Since the beginning of 2018, shares of the e-commerce giant have soared by roughly 35 percent, turning a $900 million bet into $300 million profit, and taking the stake to over $1.2 billion. There is little reason to doubt the big gamble in the stock, with the company forecasted to grow in a big way in 2018. Analyst estimates are forecasting Amazon’s earnings to climb by over 86 percent in 2018 to $8.46 per share, while revenue is expected to grow by over 31 percent to $233.49 billion, according to Ycharts.
Adobe
Lone Pine also bought nearly 1.86 million shares of Adobe during the fourth quarter, making it the fourth largest position in the hedge fund’s portfolio. Adobe, a cloud-based SAAS provider, and maker of products like Adobe Acrobat, has surged by over 26 percent in 2018, another big win for Lone Pine. The surging stock has given the hedge fund a profit of over $260 million in 2018. According to Ycharts, analysts are looking for monster growth from Adobe in 2018, with earnings seen rising to $6.28 per share, an increase of 45.7 percent, while revenue is forecasted to grow approximately 20.2 percent to $8.77 billion.
Comcast
The move to close out its position in Comcast is paying off in a big way, with the stock down by over 7.25 percent so far in 2018. The hedge fund sold all of Comcast stock in the fourth quarter, selling off nearly 32.6 million shares, it was the fifth largest holding at the end of the third quarter. Comcast shares fell at the end of January and have yet to recover from the steep stock market sell-off. Further complicating the matter, was the cable and media company’s bid to buy United Kingdom-based Sky TV for $30.9 billion, an attempt to steal the company from away from 21st Century Fox (FOXA) and Walt Disney Co. (DIS)
Lone Pine made a bunch of excellent moves in the fourth quarter that have paid off in a big way in 2018. Will they do it again in the first quarter of 2018? We’ll find out soon enough.