In this article, we will discuss the top 10 stock picks of Julian Robertson’s Tiger Management. If you want to skip our discussion on Robertson’s illustrious career and legacy, go directly to the 5 Stock Picks of Julian Robertson’s Tiger Management.
Julian Robertson was a pioneer in the hedge fund industry as he co-founded one of the earliest hedge funds, Tiger Management, in 1980. The billionaire hedge fund owner and philanthropist passed away at the age of 90 due to cardiac complications on August 23.
Born in Salisbury, North Carolina, Robertson had a knack for stock picking from a young age and developed astute investment strategies. He served for two years in the Navy following his graduation from the University of North Carolina in Chapel Hill. Robertson entered the world of finance in 1957 after joining the securities firm Kinder Peabody. He rose through the ranks and became the CEO of Webster Management, the investment advisory arm of Kinder Peabody, in 1978. After serving as the CEO for a year only, he took a break from the world of investing and traveled to New Zealand to write a novel. Robertson came back with a renewed focus and started his hedge fund in 1980.
Building a Legacy
Tiger Management held assets of more than $22 billion in the late 1990s and gave an average annual return of 32% to its investors. Robertson brought in analysts and trained them in picking the right stocks for his hedge fund. Several of them went on to start their hedge funds and became part of one of the biggest alumni groups in the hedge fund industry. Andreas Halvorsen, Stephen Mandel, Lee Ainslie, and Chase Coleman are currently some of the leading billionaire hedge fund managers in the industry who started their careers with Robertson. The extensiveness of the alumni network can be gauged by the fact that by 2008, around 36 former employees of Tiger Management had founded their hedge funds and were managing more than $100 billion in assets together, according to Sebastian Mallaby’s book “More Money Than God.” Robertson gave seed money to several of these funds.
Robertson had a peculiar way of running his hedge fund. He preferred analysts with top mental and physical abilities as he picked out competitive college athletes and arranged hikes for them as a team-building activity. Furthermore, a trainer was present on the office premises to motivate the staff towards exercise. Another of Robertson’s qualities was to know when to step away from an investment or accept responsibility for miscalculated bets. This trait was seen in 2000 when he decided to close six of his Tiger funds after recording heavy losses in 1999 and 2000 due to an incorrect bet on the yen. In a letter to investors, Robertson said:
“There is no point in subjecting our investors to risk in a market which I frankly do not understand.”
Philanthropic Pursuits
Robertson was not only known for training a generation of hedge fund managers known as “Tiger Cubs” but also for his charitable pursuits. He donated around $2 billion towards educational and medical causes during his lifetime. Robertson was also a member of the Giving Pledge initiative, which comprises the richest individuals in the world like Bill Gates and Warren Buffett. According to his spokesperson, Fraser Seitel, the billionaire shared that he would be happy to be remembered for charitable causes. When Robertson stepped back from actively managing his hedge fund, he famously said in 2013, “I didn’t want my obituary to read, ‘He died getting a quote on the yen at 2 a.m.'”
According to Forbes, Robertson’s net worth stood at $4.8 billion in 2022 as compared to $4.5 billion last year. The rise in his wealth can be attributed to allocating 40% of his portfolio towards buying put options on the Invesco QQQ Trust (NASDAQGM:QQQ). The index fund tracks the performance of the NASDAQ Composite Index, which has observed a decline of over 21% since the start of the year. The decline would have certainly booked healthy returns on the holdings of the billionaire’s put options. Furthermore, Robertson’s Tiger Management also held a stake in popular companies like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Blackstone Inc. (NYSE:BX) as of the second quarter of 2022.
Our Methodology
These stocks have been picked from the second quarter portfolio of Julian Roberson’s Tiger Management. We have ranked these companies according to the stake held in them by the hedge fund as of Q2 2022.
10. Nemaura Medical Inc. (NASDAQ:NMRD)
Number of Hedge Fund Holders: 1
Julian Robertson’s Tiger Management’s Holdings: $964,000
Percentage of Julian Robertson’s Tiger Management’s Portfolio: 0.42%
Nemaura Medical Inc. (NASDAQ:NMRD) is a New York-based organization founded in 2011. The company is working on developing a single medical platform technology that employs non-invasive systems to measure different blood markers from the skin’s surface.
In a research note issued to investors on August 19, Yi Chen at H.C Wainwright gave Nemaura Medical Inc. (NASDAQ:NMRD) stock a target price of $8 and maintained a Buy rating on the stock. The target price provides a potential upside of over 272% from the closing price as of August 24.
Nemaura Medical Inc. (NASDAQ:NMRD) posted its Q1 FY23 results on August 15. The company did not report any revenue as opposed to H.C. Wainwright’s forecast of $500,000. Meanwhile, the adjusted loss per share of 17 cents was in line with the consensus forecast.
9. Uber Technologies, Inc. (NYSE:UBER)
Number of Hedge Fund Holders: 144
Julian Robertson’s Tiger Management’s Holdings: $1,227,000
Percentage of Julian Robertson’s Tiger Management’s Portfolio: 0.54%
Uber Technologies, Inc. (NYSE:UBER) is a San Francisco, California-based ride-hailing company that has also ventured into the delivery of food and other items. The company intends to operate a fully-electric and zero-emission platform by 2040. Julian Robertson’s Tiger Management initiated a stake in Uber Technologies, Inc. (NYSE:UBER) in Q2 2020 with 34,600 shares. The hedge fund has since increased its holding in the company to 59,976 shares as of Q2 2022.
Deepak Mathivanan at Wolfe Research termed Uber Technologies, Inc. (NYSE:UBER) stock as a top idea in the mobility segment for the second half of 2022. The analyst gave the stock an Outperform rating with a target price of $37 in a note issued to investors on August 23.
Analysts think that Uber Technologies, Inc. (NYSE:UBER) has a “significant runway” to report growth in profitability and free cash flows during the second half of this year and 2023. The company is also working on margin expansion through cost savings.
Here’s what ClearBridge Investments said about Uber Technologies, Inc. (NYSE:UBER) in its Q3 2021 investor letter:
“We have also been looking for multiyear secular trends outside of the IT and Internet sectors to help us maintain a portfolio that can perform well in markets with varied sector or factor leadership. In particular, electrification of the global economy and the transition to electric vehicles (EVs) are areas where we continue to add exposure. We are investing in the brains behind EVs through NXP in the control center and Aptiv for safety features. Global rideshare leader Uber will also be a key player in the transition from internal combustion engines to EVs.”
8. European Wax Center, Inc. (NASDAQ:EWCZ)
Number of Hedge Fund Holders: 17
Julian Robertson’s Tiger Management’s Holdings: $6,440,000
Percentage of Julian Robertson’s Tiger Management’s Portfolio: 2.83%
European Wax Center, Inc. (NASDAQ:EWCZ) is a Plano, Texas-based operator of a waxing services chain that became public in August 2021. The company has over 900 locations and is working on consolidating a fragmented industry.
Analysts think there was very little focus on the personal care industry in the public market before the IPO of European Wax Center, Inc. (NASDAQ:EWCZ). The stock offers an attractive entry point to investors looking for a simple business model that can yield substantial returns.
European Wax Center, Inc. (NASDAQ:EWCZ) reported strong Q2 2022 results. The company’s total revenue observed an increase of 11% YoY while the systemwide sales grew by 6%. Furthermore, European Wax Center, Inc. (NASDAQ:EWCZ) opened 19 new centers during Q2, bringing the total number of centers to 893 at the end of the second quarter.
European Wax Center, Inc. (NASDAQ:EWCZ) is also working on boosting its franchising business. Nearly 30% of the company’s locations are franchised, but European Wax Center, Inc. (NASDAQ:EWCZ) intends to have a more balanced mix down the line.
7. Flywire Corporation (NASDAQ:FLYW)
Number of Hedge Fund Holders: 24
Julian Robertson’s Tiger Management’s Holdings: $6,787,000
Percentage of Julian Robertson’s Tiger Management’s Portfolio: 2.99%
Flywire Corporation (NASDAQ:FLYW) is a Boston, Massachusetts-based global payments enablement and software corporation.
On July 14, Will Nance at Goldman Sachs upgraded Flywire Corporation (NASDAQ:FLYW) stock from a Neutral to a Buy rating and increased the target price from $26 to $30. The analyst believes that Flywire Corporation (NASDAQ:FLYW) offers “defensive vertical exposure” because of the company’s operations in the secondary and post-secondary education segment through its receivables solutions for the industry.
Furthermore, the acquisition of UK-based education software provider WPM will give Flywire Corporation (NASDAQ:FLYW) a platform to cross-sell its offerings. Flywire Corporation (NASDAQ:FLYW) also offers significant upside in terms of growth in organic sales through pricing and volume.
During Q2 2022, Adage Capital Management increased its stake in Flywire Corporation (NASDAQ:FLYW) by 80%.
6. Archaea Energy Inc. (NYSE:LFG)
Number of Hedge Fund Holders: 32
Julian Robertson’s Tiger Management’s Holdings: $6,942,000
Percentage of Julian Robertson’s Tiger Management’s Portfolio: 3.05%
Archaea Energy Inc. (NYSE:LFG) is a Houston, Texas-based renewable natural gas (RNG) producer.
The recent development between Russia and Ukraine, causing a natural gas shortage and rocketing prices across Europe, has given a strong narrative on the outlook of the commodity, which plays in favor of Archaea Energy Inc. (NYSE:LFG). The company has a backlog of 88 high-quality RNG development projects in the pipeline.
Theresa Chan at Barclays initiated coverage on Archaea Energy Inc. (NYSE:LFG) stock with an Overweight rating and a target price of $26 in a research note issued on June 17. The analyst believes that Archaea Energy Inc. (NYSE:LFG) stock offers a vast growth opportunity in the waste-to-energy space due to long-term contracts with reliable counterparties.
Of the 895 hedge funds in Insider Monkey’s database as of Q2 2022, 32 funds held a stake in Archaea Energy Inc. (NYSE:LFG).
In addition to Archaea Energy Inc. (NYSE:LFG), companies like Alphabet Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), and Blackstone Inc. (NYSE:BX) are also amongst the top 10 stock picks of Julian Robertson’s Tiger Management.
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Disclose. None. Top 10 Stock Picks of Late Julian Robertson’s Tiger Management is originally published on Insider Monkey.
