Coatue Management recently released its portfolio updates for the fourth quarter of 2020, which ended on December 31st.
Coatue Management was founded in 1999 and is headquartered in New York. The company is a privately owned, employee-owned hedge fund sponsor. It launches and manages various hedge funds for clients and is perhaps best known for its tech-driven hedge funds. The company invests primarily in publicly traded US and non-US stocks, but also has short positions and investments in private equity and hedging markets. Chief Investment Officer Philippe Laffont (Trades, Portfolio), who founded the company after leaving Tiger Management, takes a top-down approach to stock selection and focuses on the information technology sector.
Based on the investment criteria, the company's top purchases for the quarter were DoorDash Inc. (NYSE: DASH), Sunrun Inc. (NASDAQ: RUN), Uber Technologies Inc. (NYSE: UBER), and XPeng Inc. (NYSE: XPEV )).
With the Dash
The company created a new stake in DoorDash (NYSE: DASH) valued at 8,750,705 shares, which added 4.67% to its stock portfolio. The shares traded at an average price of $ 159.61 for the quarter.
DoorDash is a grocery delivery service that connects customers with local restaurants. The company was founded in Palo Alto, California in 2012 and has since had the largest share of the third-party food delivery market in the United States
On February 22nd, DoorDash shares were trading at approximately $ 178.07 and a market cap of $ 56.57 billion. Since going public on December 9th, the stock has lost 2%.
The company has a financial strength rating of 5 out of 10. After its hugely successful IPO, DoorDash's cash-debt ratio is 4.16, which is more than 52% of its peers in the industry. The operating margin of -69.60% and the net margin of -75.37% show that the company is far from being profitable.
Sunrun
Following Sunrun's acquisition of Vivint Solar Inc. (VSLR), in which the company also owned shares, the company saw its Sunrun investment (NASDAQ: RUN) increase by 10,431,994 shares, or 126.28%, to a total of 18,692. 965 shares. As a result, Sunrun saw its equity portfolio rise by 2.71%. During the quarter, Sunrun stock traded at an average price of $ 61.80.
Sunrun, based in San Francisco, is a solar module and battery storage company. It provides solar panels, batteries, installation, education, and other solar systems and services under rental and purchase agreements for homeowners in 23 states.
On February 22nd, Sunrun's shares were trading at approximately $ 63.39 and a market capitalization of $ 12.52 billion. According to the GuruFocus Value Chart, the stock is significantly overvalued.
The company has a financial strength rating of 2 out of 10 and a profitability rating of 3 out of 10. The Altman Z-Score of 1.73 and the Piotroski F-Score of 2 out of 9 indicate poor business activity. The three-year sales growth rate is 15.1%, while the three-year Ebitda growth rate is 29.9%.
About Technologies
The company increased its stake in Uber Technologies (NYSE: UBER) by 9,333,658 shares, or 78.88%, on a total investment of 21,166,062 shares. Trading affected the stock portfolio by 1.78%. The shares traded at an average price of $ 44.94 for the quarter.
Uber is known as the world's largest ridesharing company. It also offers grocery deliveries, electric bikes and scooters, and has various technology projects. The company is based in San Francisco and operates in 63 countries worldwide.
On February 22nd, shares of Uber were trading at around $ 55.31 with a market cap of $ 102.41 billion. Since going public on May 9, 2019, the stock has risen 31%.
The company has a financial strength rating of 4 out of 10 and a profitability rating of 1 out of 10. The Altman Z-Score of 2.05 and the Piotroski F-Score of 3 out of 9 put the company in the gray area in financial terms. The operating margin of -40.26% and the net margin of -56.04% show that the company is not yet profitable.
XPeng
The company created a new stake of 10,379,425 shares in XPeng (NYSE: XPEV), which added 1.66% to its stock portfolio. During the quarter, stocks traded at an average price of $ 37.02.
On February 22nd, XPeng shares were trading around $ 38 with a market cap of $ 27.10 billion. Since the company's IPO in late August, the stock has gained 79%.
XPeng, also known as Xiaopeng Motors or XMotors.ai, is a Chinese electric vehicle manufacturer headquartered in Guangzhou in China and Mountain View in California in the United States. It builds intelligent electric cars with “Internet DNA” that are geared towards younger generations.
The company has a financial strength rating of 5 out of 10. After going public, the cash-debt ratio is high at 7.63. The operating margin of -116.86% and the net margin of -80.24% show that the company is not yet profitable.
Portfolio overview
At the end of the quarter, the equity portfolio consisted of holdings in 76 stocks valued at $ 26.73 billion. The company made 17 new purchases, sold 14 shares, and trimmed or trimmed several other positions for 23% revenue for the period.
The top positions were The Walt Disney Co. (NYSE: DIS) with 7.49% of the equity portfolio, PayPal Holdings Inc. (NASDAQ: PYPL) with 6% and Tesla Inc. (NASDAQ: TSLA) with 5.68%. In terms of sector weighting, the company received the most investments in technology, communications services and cyclical consumers.
Disclosure: The author has no shares in any of the stocks mentioned. The mention of stocks in this article does not constitute investment advice at any point in time. Portfolio updates reflect only common stock positions as per regulatory filings for the quarter in question and may not include changes made after the end of the quarter.
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