Should You Follow Coatue Management’s Lead Into Facebook (FB), Alphabet (GOOG) And Two Other Tech Stocks?

According to regulatory filings, Netflix, Inc. (NASDAQ:NFLX) is one of Coatue Management’s long-term investments, with it having established a long position in the company at the end of 2012. During the third quarter, the fund’s stake was reduced by 4% to 4.74 million shares worth $467 million according to its latest 13F filing. Netflix, Inc. (NASDAQ:NFLX) returned 7.7% during the third quarter and has seen a decrease in activity from the world’s largest hedge funds of late, as seen in the chart below.

The stock was in 54 hedge funds’ portfolios at the end of the second quarter of 2016, down from 64 long positions recorded at the end of the previous quarter. Among these funds, SRS Investment Management held the most valuable stake in Netflix, Inc. (NASDAQ:NFLX), which was worth $932.9 million at the end of the second quarter. On the second spot was Viking Global which amassed $575.3 million worth of shares. Moreover, Matrix Capital Management and Scopia Capital were also bullish on Netflix, Inc. (NASDAQ:NFLX).

Recent developments at Alphabet Inc (NASDAQ:GOOG) prompted Coatue Management’s leadership to change their opinion about the stock and add it to their shopping list. During the third quarter, the fund’s position was increased by 11% to amass 585,709 shares valued at $455 million at the end of September. Alphabet Inc (NASDAQ:GOOG) registered a 12.3% advance during the third quarter and was the most popular stock among the funds we follow when factoring in the total number of investors owning one or both classes of its shares (187 total).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Eagle Capital Management, managed by Boykin Curry, held the most valuable position in Alphabet Inc (NASDAQ:GOOG). The fund had a $1.28 billion position in the stock, comprising 5.5% of its 13F portfolio at the end of Q2. Sitting at the No. 2 spot was Southeastern Asset Management, run by Mason Hawkins, which held a $669.8 million position. Some other members of the smart money with similar optimism contain John Armitage’s Egerton Capital Limited, Stephen Mandel’s Lone Pine Capital, and Andreas Halvorsen’s Viking Global.

Disclosure: None