Billionaire Stephen Mandel’s Lone Pine Capital now own 5% of the outstanding shares of Tripadvisor Inc (NASDAQ:TRIP) according to a filing with the SEC. Mandel and his fellow Tiger Cubs love travel sites; three of the four largest hedge fund positions in Tripadvisor at the end of September, according to our database of 13F filings, belonged to their funds. Lone Pine had initiated its position in the stock last quarter (find more stocks Mandel was buying). However, at 32 times trailing earnings, and with net income up only 9% last quarter compared to the third quarter of 2011, we think that the stock is too expensive to be a buy.
Glenview Capital, which is managed by former Omega Advisors trader Larry Robbins, bought even more shares of hospital company Health Management Associates, Inc. (NYSE:HMA) for a total of about 34 million shares- over 13% of the company. Health Management and other hospitals trade in a very narrow range in terms of their forward P/E multiples, between 9 and 11, though in this case analysts are looking bullish as the stock carries a trailing P/E of 16. Check out Glenview’s stock picks. We think that it might be better to consider other companies in the industry.
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), which provides healthcare software and information services, had healthcare focused hedge fund Healthcor Management increase its holdings of the stock to over 9% of the shares outstanding even though the company had been Healthcor’s largest position at the end of September (find more of Healthcor’s favorite stocks). Revenue has been about flat, though special items have hurt the bottom line recently. Analyst expectations imply a forward P/E of 11, which seems to assume substantial improvement in the core business. We wouldn’t buy unless we saw much stronger signs that the company could meet expectations.
Al Gore and former Goldman Sachs Asset Management head David Blood’s Generation Investment Management, which prefers to invest in environmentally and “socially responsible” companies, owned 4.2 million shares of recent solar IPO SolarCity Corp (NASDAQ:SCTY), or nearly 6% of the outstanding shares. The company sells or leases, and then installs, solar energy systems including for residential customers. Multiple insiders, including billionaire and company Board member Elon Musk, have been buying the stock after SolarCity was forced to reduce its IPO price (research insider buying at SolarCity). The company is unprofitable, though revenue is growing and margins are improving. We would avoid the stock.
Ardsley Partners reported owning just over 5% of frac sand producer Hi-Crush Partners LP (NASDAQ:HCLP). See more stock picks from Ardsley Partners. Baker Hughes, part of the company’s limited customer base, recently back out of an agreement with Hi-Crush and this has helped send the stock down 25% from shortly after its August IPO. However, Hi-Crush offers a number of positive points. It trades at 7 times forward earnings estimates and recently paid a dividend equal to 1.6% of the current stock price- and this was only for half of one quarter of the year. While that payment is likely not representative, we think it’s worth looking more closely at the company.
