In this article we will take a look at the best tech and dividend stocks to buy according to billionaire Chase Coleman. You can skip our detailed analysis of Chase Coleman’s history, investment philosophy, and hedge fund performance, and go directly to the 5 Best Tech and Dividend Stocks to Buy According to Billionaire Chase Coleman.
Chase Coleman’s journey into financial management and investment started after he graduated in 1997 and was hired by Tiger Management founder and legendary investor Julian Robertson. After closing his hedge fund in 2000, Robertson gave Coleman $25 million, which was the foundation Tiger Global. The fund since grown into a huge, successful investment firm that manages a portfolio worth $39.03 billion.
Tiger Global Investments invests in public equity through publicly-listed companies and private equity. The hedge fund has averaged a 21% annual return for the last 20 years. In Q4 2020 the fund returned 25.56% to its investors.
Best Tech Stocks in Coleman’s Portfolio
Some notable stock picks of Chase Coleman based on his hedge fund’s Q4’20 portfolio include Facebook, Inc. (NASDAQ: FB) and Uber Technologies, Inc. (NYSE: UBER). The tiger cub also has a $4.5 billion stake in Chinese internet giant JD.com, Inc. (NASDAQ: JD).
Coleman is also bullish on Salesforce.com, inc. (NYSE: CRM), Microsoft Corporation (NASDAQ: MSFT), and Adobe Inc. (NASDAQ: ADBE).
Microsoft Corporation (NASDAQ: MSFT) shares have returned 35% over the last 12 months. MSFT is currently trading in the red after media reports suggested the U.S. officials are still considering ending the $10 billion JEDI cloud contract it awarded to Microsoft (NASDAQ:MSFT) in 2019. The contract was challenged by Amazon (NASDAQ:AMZN). Last month, Amazon (NASDAQ:AMZN) cheered a major legal win after a federal judge rejected motions by the Defense Department and Microsoft Corp. to dismiss Amazon (NASDAQ:AMZN)’s complaints against the contract. Still, Microsoft has plenty of growth catalysts, including its foray into gaming, content and strong growth in Azure. Microsoft (NASDAQ:MSFT) recently gave an upbeat guidance for fiscal fourth quarter. The company expects its Productivity and Business revenue to total $13.8 billion – $14.05 billion, compared to the consensus estimate of $13.63 billion. MSFT is one of the best tech stocks to buy according to Chase Colman.
Adobe Inc. (NASDAQ: ADBE), in which Coleman has an $83 million stake, is also one of the best tech stocks to buy. The company remains popular with digital content creators thanks to its impressive portfolio of solutions. Some widely used examples include the popular Adobe Photoshop and Lightroom. Latest developments highlight Adobe Inc. (NASDAQ: ADBE)’s desire to venture into other opportunities. Adobe shares are up over 30% in the last 12 months. Adobe (NASDAQ:ADBE) is trending after the company posted a record Q1 revenue at $3.91 billion, up 27% from the previous year and beating the estimates by $150 million. Digital media sales in the period jumped 32% on a year-over-year basis to $2.86 billion. Because of its long-term growth potential, Adobe is one of the best tech stocks to buy now according to Chase Colman’s portfolio.
Another technology stocks in Coleman’s portfolio is Salesforce (NYSE: CRM). The stock is up about 17% in the last 12 months. Coleman owns 2,288,700 shares of the company as of the end of the fourth quarter, worth $509.30 million. Bank of America recently named Salesforce (NYSE: CRM) among its top software picks. The firm believes that Salesforce has a “long runway” of organic growth fueled by “front office digital transformation” in the enterprise world. The firm has a Buy rating for Salesforce (NYSE: CRM) with a $275 price target. Long-term growth potential makes CRM one of the best tech stocks to buy now.
But Coleman prefers to diversify his portfolio and has several stocks that pay decent dividends. In this article we will take a look at some of the best tech and dividend stocks that Coleman is piling into based on his Q4 portfolio.
Coleman is an exception in an industry that is reeling from losses. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Let’s discuss the best tech and dividend stocks to buy according to billionaire Chase Coleman. Some of these stocks are pure tech plays. Some tech stocks offer decent dividend yields. We also included some non-tech stocks in Coleman’s portfolio that are good dividend investments.
Best Tech and Dividend Stocks
10. Mastercard Incorporated (NYSE: MA)
Dividend Yield: 0.46%
No. of hedge Fund Holders: 154
Mastercard Incorporated (NYSE: MA) has strongly positioned itself as one of the leading payments providers across the globe. Its scale of operations and profitability easily makes it one of the best tech and dividend stocks in Coleman’s portfolio. The Mastercard New Payments Index recently revealed that 93% of consumers favor new payment methods such as cryptocurrencies, biometrics, and even QR codes.
Mastercard ranks 10th in the list of best tech and dividend stocks to buy according to Chase Coleman.
In January, Bernstein initiated a coverage on Mastercard Incorporated (NYSE: MA) and rated the stock as “Outperform” and gave price target of $380.
In its Q4 2020 investor letter, Bretton Fund spoke about Visa Inc. (NYSE:V) and Mastercard Inc (NYSE:MA) stocks. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa Inc. (NYSE:V) and Mastercard Incorporated (NYSE: MA) make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
9. Visa Inc. (NYSE: V)
Dividend Yield: 0.55%
No. of hedge Fund Holders: 166
Visa Inc. (NYSE:V) is a global payments provider that facilitates electronic transactions worldwide through its Visa-branded cards. The company recently announced a partnership with Airbnb, Inc. (NASDAQ: ABNB) that aims to make it easier for Airbnb hosts to receive funds faster. The feature will only be available in specific markets, and it will leverage the card payment company’s push payments platform called Visa Direct, which transacts in real-time. Visa Direct will allow eligible Airbnb, Inc. (NASDAQ: ABNB) hosts to move their money conveniently from Airbnb to their bank accounts.
Visa ranks 9th in the list of best tech and dividend stocks to buy according to Chase Coleman.
Visa Inc. (NYSE:V) revealed that it generated $5.7 billion revenue in the first quarter of its fiscal year 2021 after a 6% decline from the previous quarter. The company’s net income for the same quarterly period was $3.1 billion or $1.42 per share.
Wedgewood Partners, in their Q1 2021 investor letter, mentioned Visa Inc. (NYSE: V). Here is what Wedgewood Partners has to say about Visa Inc. in its letter:
“Visa payment volume recovered along with consumer spending habits, finishing up +5% during the December quarter; but it skewed heavily toward online purchases, particularly with debit. Historically, Visa Inc. (NYSE:V) has had a meaningful portion of its volume derived from higher-yielding credit card spending related to cross-border travel and entertainment (T&E). As many countries maintain closed borders, Visa Inc. (NYSE:V)’s cross-border T&E segment has stayed depressed. However, we expect this business will rebound as borders inevitably reopen to COVID-19 vaccinated populations. In the meantime, we trimmed Visa to help fund a reestablished position in Booking Holdings, which should disproportionately benefit from the aforementioned reopening as well.”
8. Intuit Inc. (NASDAQ: INTU)
Dividend Yield: 0.57%
No. of hedge Fund Holders: 68
Intuit Inc. (NASDAQ: INTU) is a finance software developer based in the U.S. The stock ranks 8th in the list of best tech and dividend stocks to buy according to Chase Coleman.
Some of the company’s latest developments include the integration of ProConnectwith Practice Ignition. The latter is a payment management software, while the former is a professional tax preparation software. The partnership will facilitate the automation of administrative tasks to facilitate better workflow, especially for tax professionals. Intuit ranks 8th in our list of best tech and dividend stocks to buy according to Chase Coleman.
Like Microsoft Corporation (NASDAQ: MSFT), Salesforce (NYSE: CRM) and Adobe Inc. (NASDAQ: ADBE), Intuit is one of the best tech plays with organic growth potential.
In its Q3 2020 investor letter, L1 Capital International Fund highlighted a few stocks and Intuit Inc. (NASDAQ:INTU) is one of them. Here is what L1 Capital International Fund said:
“Intuit epitomises the consistency, predictability and longevity of growth we seek in high quality businesses.
Intuit currently operates through 2 main divisions:
- Software for financial and business management as well as integrated payroll solutions, merchant payment processing solutions, and financing for small businesses in the US and key global markets; and
- Do‑it‑yourself and assisted income tax preparation software products and services sold in the U.S. and Canada.
Intuit also provides personal financial software and services through its Mint and Turbo products and has announced the acquisition of Credit Karma for US$7.1 billion which will significantly expand its personal finance capabilities, creating a third leg to Intuit’s growth stool.
Intuit’s tax capabilities also include software and services for professional accountants in the United States and Canada.
Intuit has made 5 “big bets” which extend across its divisions and drive its operating strategy and growth profile:
- Utilisation of Artificial Intelligence (AI) and customer insight (based on unique data) to make products simpler and to increase the speed of product enhancements – many of Intuit’s products are “do it for myself” applications and AI can facilitate self‑help and ease of use.
- Connecting people to experts – QuickBooks Live, TurboTax Live and Mint Live enable customers to speak to independent experts to solve their issues, increasing the number of customers, engagement levels, and revenue per customer.
- Facilitating “smart money decisions” by connecting customers with financial offerings that save them money – there are now 22 million registered users of Turbo and this division will be significantly expanded through Credit Karma’s over 100 million members (37 million monthly active users) once the acquisition completes.
- Becoming “the source of truth for a business”, not just “the source of truth for your books” – Intuit aims to assist small business customers get paid fast, manage capital, pay employees and grow in an omnichannel world. Intuit has unique capabilities through the integrated QuickBooks software, Payroll, Payments and QuickBooks Cash bank account, facilitating payments ($65 billion charge volume) and optimising cashflow management.
- Disrupt the market for accounting software for businesses with 10 to 100 employees – QuickBooks’ traditional strength lies with smaller businesses but QuickBooks Advanced expands the product’s capabilities to fully service larger businesses at a very competitive price point, albeit multiples of the standard QuickBooks price.
These “big bets” support consistent, predictable growth in all of Intuit’s key businesses:[Read the complete letter here]
7. Microsoft Corporation (NASDAQ: MSFT)
Dividend Yield: 0.89%
No. of hedge Fund Holders: 154
Microsoft Corporation (NASDAQ: MSFT) ranks 7th in our list of the best tech and dividend stocks to buy according to Chase Colman.
Some of the latest developments involving Microsoft Corporation (NASDAQ: MSFT) include its latest partnership program with the Malaysian government. It plans to invest $1 billion in the country in the next five years. The partnership will involve creating the region’s first data center with the help of some government agencies. Microsoft’s investment in Malaysia also aims to help millions of citizens to gain digital skills by 2023.
Microsoft Corporation (NASDAQ: MSFT) is currently engaged in a tug of war regarding the $10 billion JEDI contract it won from the US Department of Defense. The contract was challenged by Amazon (NASDAQ:AMZN).
Baron Opportunity Fund, in their Q1 2021 investor letter, mentioned Microsoft Corporation (NASDAQ: MSFT) and analyzed the company Azure business, the competitor of Amazon (NASDAQ:AMZN) AWS. Here is what Baron Opportunity Fund has to say about Microsoft Corporation in its letter:
“Microsoft Corporation is a cloud-software Titan, and also discussed further in the Review and Outlook section above and the Top Purchases section below. Microsoft Corporation (NASDAQ: MSFT) was a top contributor in the period because it trades at reasonable FCF and earnings valuations, has cloud and digital transformation tailwinds at its back, and reported an excellent December quarter, beating Street expectations by a wide margin. Microsoft’s results were strong across the board, with accelerating trends in Azure cloud computing and solid growth in its overall commercial cloud businesses. Azure accelerated to 48% constant-currency (“cc”) revenue growth from 47% the quarter before, and commercial cloud grew 32% cc, ahead of Street estimates at 26%. Microsoft’s profitability was also a significant beat, with operating income coming it at $17.9 billion, almost $3 billion ahead of Street estimates. Microsoft’s March quarter guidance also outstripped Street projections, with revenue growth of 16.5% versus the Street at 10.6%, and operating income over $1 billion ahead. CEO Satya Nadella began the earnings call with this proclamation: “What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry. Digital capability is key to both resilience and growth … Microsoft Corporation (NASDAQ: MSFT) is powering this shift with the world’s largest and most comprehensive cloud platform … I’m energized by our increasing momentum and the expanding opportunity fueled by the structural change brought about by the rapid adoption of digital technology.””
6. Farmland Partners Inc. (NYSE: FPI)
Dividend Yield: 1.48%
No. of hedge Fund Holders: 8
Farmland Partners Inc. (NYSE: FPI) is a real estate firm that invests in high-quality farmland across the U.S with the goal of using that land to produce food, fuel, and animal feed in line with global demand. Some of the company’s highlights in 2020 include finalizing three acquisitions collectively valued at $1.4 million. It also sold off seven assets collectively worth $20.5 million, and the disposal generated a $3.2 million total gain with an IRR of roughly 11%.
FPI ranks 6th in our list of best dividend stocks to buy according to Chase Coleman. This holding also shows that Coleman isn’t just relying on major tech stocks like Facebook, Inc. (NASDAQ: FB) and Uber Technologies, Inc. (NYSE: UBER), JD.com, Inc. (NASDAQ: JD), etc..
Farmland Partners Inc. (NYSE: FPI) board of directors declared a quarterly dividend of $0.05 per share in February 2021 for the quarter ended December 31, 2020.
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Disclosure: None. Best Tech and Dividend Stocks to Buy According to Billionaire Chase Coleman is originally published on Insider Monkey.
