Billionaire Julian Robertson’s Top Bullish Picks This Quarter

In the hedge fund universe, billionaire Julian Robertson is one of the most notorious figures, even though he has been retired for more than a decade. He is still widely followed and his opinion on the overall state of the markets and individual stocks is highly valued. Robertson’s Tiger Management still holds a small equity portfolio, worth around $748.40 million. Nearly 60% of the portfolio is represented by Technology and Consumer Discretionary stocks, with Healthcare, Finance, and Transportation stocks amassing smaller portions. In this article, we are going to take a look at Robertson’s top five holdings, as disclosed in its latest 13F filing.

We follow investors like Robertson, because we believe that imitating some of their long positions can help us outperform the market. Hedge funds and other institutional investors usually focus on companies with strong fundamentals and bet on companies that can generate returns over the long-run, which is why they are the perfect investors to emulate. Our strategy involves imitating a portfolio of the 15 most popular small-cap stocks among some 730 investors and it has returned 102% since August 2012, beating the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).

Julian Robertson remained confident in Facebook Inc (NASDAQ:FB)‘s performance, having increased his stake by 7% to 476,900 shares worth $42.87 million during the third quarter. The holding amasses 5.73% of Tiger Management’s equity portfolio value and is the fifth-largest in terms of value. Earlier this year, Robertson mentioned Facebook among his high-growth picks and he hasn’t been proven wrong, as the stock has gained more than 35% since the beginning of the year. Other smart money investors share the same opinion on Facebook, as the company ranked as the fourth-most popular stock among the funds that we track, with 127 of them holding shares of the company. Stephen Mandel, one of Robertson’s former protégés and the manager of Lone Pine Capital, is also betting big on Facebook, owning 10.70 million shares.

In Blackstone Group LP (NYSE:BX), Robertson almost doubled his stake, reporting ownership of 1.38 million shares valued at $43.58 million. The investor acquired shares of the alternative asset management company as its stock slid by 21% in the third quarter amid an overall drop of the market. Blackstone Group LP (NYSE:BX) has significant exposure to stocks and invests some of its capital with large hedge funds such as Bill Ackman’s Pershing Square and Larry Robbins’ Glenview Capital, both of whom lost money in the last couple of months. Nevertheless, Blackstone has a 10% return on equity and is trading at a price/book ratio of 3.6, versus the 2.8 mean for the S&P 500 companies. John W. Rogers’ Ariel Investments is another shareholder of Blackstone Group LP (NYSE:BX), holding 1.15 million shares as of the end of September.

Read on to see which stocks made it to the top of the list of Robertson’s largest holdings.

On the third spot is Delta Air Lines, Inc. (NYSE:DAL), in which Tiger Management inched down its position by 16,400 shares to 1.0 million shares valued at $44.88 million. With lower jet fuel costs driven by lower crude oil prices and a strict cost control policy, Delta Air Lines, Inc. (NYSE:DAL)’s stock is one of the best airline operators to invest in (the company has ranked as the most popular airline among the funds we track for the past several quarters). The stock is trading at around 8.8-times forward earnings and has a dividend yield of 1.15%. Paul Reeder and Edward Shapiro’s PAR Capital Management is also bullish on Delta Air Lines, Inc. (NYSE:DAL), holding 14.97 million shares.

In Netflix, Inc. (NASDAQ:NFLX), Robertson increased his stake by 15% to 514,600 shares valued at $53.14 million. As an industry disruptor, Netflix, Inc. (NASDAQ:NFLX) focused on long-term growth and the work has paid off well, as the stock is up by nearly 400% in the last five years and has gained more than 140% this year, even though the company missed estimates in two of the last four quarters. Chase Coleman, another former employee of Julian Robertson, owns almost 18 million shares of Netflix, Inc. (NASDAQ:NFLX) through his fund Tiger Global Management, the holding being its largest in terms of value.

Finally, JD.Com Inc (ADR) (NASDAQ:JD) represents Robertson’s top position and contains 2.55 million shares worth $66.43 million. During the third quarter, the investor unloaded 587,000 shares amid a 23% drop of the stock owing to concerns regarding the economic growth in China. Despite this decline, JD.Com Inc (ADR) (NASDAQ:JD)’s shares have gained more than 21% since the beginning of the year and analysts see more potential ahead as they have a consensus price target of $37.30  on them, which implies an upside potential of 29%. Both Chase Coleman and Stephen Mandel are among the top shareholders of JD.Com Inc (ADR) (NASDAQ:JD), owning 57.53 million shares and 43.50 million shares respectively as of the end of September.

Disclosure: None