United Rentals, Inc. (URI), Tesla Motors Inc (TSLA): Cupps Capital Going Big In Chi-Town

Editor’s Note: Related tickers: NetSuite Inc (NYSE:N), Veeco Instruments Inc. (NASDAQ:VECO), Financial Engines Inc (NASDAQ:FNGN), United Rentals, Inc. (NYSE:URI), Tesla Motors Inc (NASDAQ:TSLA)

Cupps Capital Management is a Chicago-based investment management firm serving institutional investors through separately managed accounts since 2000. Mr. Drew Cupps is President and Chief Investment Officer of the firm, and has built a fund with over $951 million in assets under management.

A top trio

NetSuite Inc (NYSE:N) is at the first spot with 481,063 shares during the quarter, 66,215 shares less compared to December 2012. Despite that, the entry’s value in Cupps Capital’s 13F climbed 4.57% to reach $38.513 million. The stock trades at a forward P/E of 205.85 and a beta of 1.53. With a trailing EPS of -$0.57 and the eleventh worst profit margin in its industry (12.25%), NetSuite Inc (NYSE:N) may look a bit risky, but revenues have skyrocketed over 30% in the past year.

Cupps Capital keeps a stake of 664,787 shares in Veeco Instruments Inc. (NASDAQ:VECO) in possession.  The fund was bullish last quarter, adding a whopping 516,442 shares to the position. Veeco Instruments Inc. (NASDAQ:VECO) shares have skyrocketed in terms of value, and the position is now worth $25.534 million, good for 2.56% of the 13F portfolio’s value compared to 0.48% just three months earlier. The stock trades at the eighth highest trailing P/E ratio of 23.36 in its sector, with a forward rate almost double that at 42.86. Profit margins are relatively high at 10.41%, while diluted trailing EPS is near $1.60.

Financial Engines Inc (NASDAQ:FNGN) follows up with an increase in positional value by 23.20% to $23.308 million. Despite that, the size of the stake decreased by 38,519 shares between quarters. Financial Engines Inc (NASDAQ:FNGN) trades at a trailing P/E ratio of 109.05, second highest in the asset management industry, though a forward P/E of 49.81 is a bit more acceptable. The price of the stock has increased during the last 52 weeks by 92.47% and the entity has a profit margin of only 10%, twelfth lowest in its industry.

The best of the rest

United Rentals, Inc. (NYSE:URI) keeps a spot in the top five despite the fact that the fund lowered its stake by 51,283 shares. The value of the total position still grew by 7.58% to $23.010 million in the first quarter, though. This stock trades at the highest trailing P/E (72.58) in its industry, though a forward P/E of 9.67 indicates that Mr. Market may be underrating this stock’s growth prospects. United Rentals, Inc. (NYSE:URI)’s diluted EPS is $0.80, while the price increased by more than a third during the last year. Analysts have a mean current recommendation of 1.7 for the stock.

Tesla Motors Inc (NASDAQ:TSLA) closes out the top five with a $21.540 million holding, increasing by 6.18% in comparison to the previous quarter. This happened despite the fund selling 30,430 shares, which may look like a rather foolish move considering the automaker’s massive appreciation of late. With recent earnings beating literally every expectation out there—even on the high side—investors are pushing Tesla Motors Inc (NASDAQ:TSLA) near the $100 mark, though it remains to be seen if shares can break this level. It will be intriguing to see if more hedge funds move into Tesla Motors Inc (NASDAQ:TSLA) as the second quarter progresses.

Final thoughts