Philippe Laffont Stock Portfolio: 10 Top Stock Picks

Published on November 22, 2023 at 10:32 am by Usman Kabir in Hedge Funds, News

In this article, we discuss Philippe Laffont and his top 10 stock picks. If you want to read about some more stocks in the Laffont portfolio, go directly to Philippe Laffont Stock Portfolio: 5 Top Stock Picks.

Technology-focused hedge funds with big positions in firms like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN) are all the rage right now. Philippe Laffont, the billionaire chief of Coatue Management, oversees one such investment firm. The value of the equity portfolio of his fund, with major holdings in tech firms, was over $19.7 billion at the end of the third quarter of 2023. Laffont had founded the fund in 1999 with just $50 million in initial capital.

Laffont is a French-born investor who has beaten the returns of the NASDAQ Composite by more than five percentage points on average over the past two-and-a-half decades. His hedge fund, which has over $70 billion in assets under management, has gained an average of 11% every year since 1999. Laffont began his financial career by working for consulting firm McKinsey straight after his post-graduate degree in Computer Science from the Massachusetts Institute of Technology. He also worked as a telecommunications analyst for Julian Robertson.

Robertson was a billionaire who founded Tiger Management, one of the most successful hedge funds in the world, and ran it for two decades. The protegees of Robertson are known as Tiger Cubs in the finance world. According to a report in the Financial Times, Laffont, who refers to himself as a repressed mediocre computer scientist, deploys an investment strategy that seeks to temper Silicon Valley optimism with macroeconomic caution in the technology space. His latest activity at the stock market illustrates his approach in action.

Our Methodology

These were picked from the investment portfolio of Coatue Management at the end of the third quarter of 2023. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2023 was used to quantify the popularity of each stock in the hedge fund universe.

Philippe Laffont of Coatue Management

Philippe Laffont Stock Portfolio: Top Stock Picks

10. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 152

Alphabet Inc. (NASDAQ:GOOG) is a California-based technology firm. Regulatory filings reveal that Coatue Management owned 5.1 million shares of Alphabet Inc. (NASDAQ:GOOG) at the end of the third quarter of 2023 worth $678 million, representing 3.44% of the portfolio.

On October 25, investment advisory Monness Crespi downgraded Alphabet Inc. (NASDAQ:GOOG) stock to Neutral from Buy with no price target, citing disappointing third quarter earnings as the primary reason behind the downgrade.

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 43 million shares worth more than $5.7 billion.

Just like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) is one of the top stocks in the portfolio of Philippe Laffont.

In its Q3 2023 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:

“As for other quarterly contributors, Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms, Inc., (META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”

9. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 114

Netflix, Inc. (NASDAQ:NFLX) provides entertainment services and is headquartered in California. Regulatory filings show that Coatue Management owned 1.9 million shares in Netflix, Inc. (NASDAQ:NFLX) at the end of September 2023 worth $754 million, representing 3.82% of the portfolio.

On October 19, investment advisory Morgan Stanley upgraded Netflix, Inc. (NASDAQ:NFLX) stock to Overweight from Equal Weight and raised the price target to $475 from $430, noting that password crackdowns by the firm were working and business accelerating.

Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in Netflix, Inc. (NASDAQ:NFLX) with 4.6 million shares worth more than $1.7 billion.

In its Q3 2023 investor letter, RiverPark Advisors, an asset management firm, highlighted a few stocks and Netflix, Inc. (NASDAQ:NFLX) was one of them. Here is what the fund said:

“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top detractor in the quarter on weaker than expected reported and guided revenue, despite 2Q subscriber growth that was well above expectations (+5.9 million versus estimates of +2.1 million). The company’s subscriber growth re-accelerated following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier, but the average revenue per user came in below expectations and is expected to remain muted in the near term. NFLX reiterated expectations for full year 2023 operating margins of 18-20%, and guided free cash flow to at least $5 billion, up from prior guidance of $3.5 billion. Despite the positive momentum in the company’s business, market participants took comments from management at a recent conference to mean revenue growth may be slower in the coming years than expected. This was not our interpretation of these comments.

In fact, the recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25% (revenue grew 3% for 2Q23 and operating margin was 22.3%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”

8. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 86

Intuit Inc. (NASDAQ:INTU) provides financial management and compliance products. The hedge fund of billionaire Philippe Laffont owned over 1.5 million shares of Intuit Inc. (NASDAQ:INTU) at the end of the third quarter of 2023 worth more than $767 million, representing 3.89% of the portfolio.

On November 14, Evercore ISI analyst Kirk Materne maintained an Outperform rating on Intuit Inc. (NASDAQ:INTU) stock and raised the price target to $600 from $530, noting that IT budgets were set to move higher in the coming months.

Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Intuit Inc. (NASDAQ:INTU) with 2.8 million shares worth more than $1.4 billion.

In its Q3 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Intuit Inc. (NASDAQ:INTU) was one of them. Here is what the fund said:

“Intuit Inc. is the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Shares increased after the company reported financial results that exceeded Street expectations, with 13% revenue growth and 22% EPS growth in the recently completed fiscal year. Management provided favorable guidance for the next fiscal year that demonstrated confidence in the business momentum despite macroeconomic uncertainty. Intuit is benefiting from the sale of higher-value services and is well positioned to capitalize on increasing adoption of artificial intelligence given the company’s vast datasets. We continue to own the stock due to Intuit’s strong competitive position and numerous growth opportunities.”

7. Eaton Corporation plc (NYSE:ETN)

Number of Hedge Fund Holders: 51

Eaton Corporation plc (NYSE:ETN) operates as a power management company worldwide. The hedge fund of billionaire Philippe Laffont owned over 3.7 million shares of Eaton Corporation plc (NYSE:ETN) at the end of the third quarter of 2023 worth more than $808 million, representing 4.10% of the portfolio.

On November 1, Wells Fargo analyst Joseph O’Dea maintained an Equal Weight rating on Eaton Corporation plc (NYSE:ETN) stock and raised the price target to $220 from $210, noting the firm had delivered another impressive quarter.

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Eaton Corporation plc (NYSE:ETN) with 738,428 shares worth more than $157 million.

In its Q2 2023 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Eaton Corporation plc (NYSE:ETN) was one of them. Here is what the fund said:

“Meanwhile, our cyclical industrials and materials holdings were standouts from a relative perspective. Industrials holdings continued to outperform, with Eaton Corporation plc (NYSE:ETN) advancing amid enthusiasm for the company’s electrical product lineup, which is critical to both energy saving and long-term electrification of the global economy. Solid execution is also helping the stock perform strongly.”

6. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 79

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company. Latest filings show that the hedge fund overseen by Laffont owned 4 million shares of Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter of 2023 worth $1 billion, representing 5.11% of the portfolio.

On November 20, investment advisory Jefferies maintained a Hold rating on Tesla, Inc. (NASDAQ:TSLA) stock and lowered the price target to $210 from $250, noting the firm had value in the future with full self-driving features.

At the end of the second quarter of 2023, 79 hedge funds in the database of Insider Monkey held stakes worth $6.5 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 82 in the previous quarter worth $6.4 billion.

Just like NVIDIA Corporation (NASDAQ:NVDA), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA) is one of the top stocks in the portfolio of Philippe Laffont.

Here is what Baron Fund has to say about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:

“Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.

We continue to believe that Tesla is only scratching the surface of its potential. We regard announced partnerships between Tesla and its competitors in the quarter as important. In early June, Tesla agreed to provide Ford Motors access to Tesla’s electric vehicle (EV) charging technology and network. Other traditional and pure EV manufacturers, including General Motors, Rivian, and Volvo, quickly followed suit. We expect additional charging partnerships to ensue. In our view, these relationships validate Tesla’s charging technology and infrastructure as superior to other standards. Consolidation around a single technology should accelerate charging infrastructure deployment, diminish the risk of Tesla’s technology becoming obsolete, and lessen a key concern of hesitant EV purchasers. EV adoption is at a tipping point. And Tesla, with its approximately 60% domestic market share of EVs, should be the most important beneficiary of this shift…” (Click here to read the full text)

Click to continue reading and see Philippe Laffont’s Top 5 Stock Picks.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on December 13, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

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Click to continue reading…

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