Stephen Mandel And Lone Pine Capital’s New Stock Picks

Stephen Mandel’s Lone Pine Capital has $17 Billion in assets under management. His personal wealth is about one tenth of that. Mandel is a Tiger cub, leaving Julian Robertson in 1997 to launch Lone Pine. He’s a “bottom-up” investor with great stock picking skills. He returned about 23% during the past 11 years, beating the S&P 500 index by more than 20 percentage points per year.

Stephen Mandel’s Lone Pine Capital had 52 stocks in its 13F portfolio valued at $12.1 Billion at the end of December. He bought 15 new stocks during the fourth quarter, totaling nearly $3 Billion. Here’s how they performed this year:

Company Ticker Return Value (Million) CITIGROUP INC C 3.8% 687 SCHLUMBERGER LTD SLB 14.1% 585 TECK RESOURCES LTD TCK -10.9% 455 CTRIP COM INTL LTD CTRP -2.4% 174 CABLEVISION SYS CORP CVC 11.2% 173 UNION PAC CORP UNP 4.8% 173 MASTERCARD INC MA 12.0% 171 ETFS PALLADIUM TR PALL 5.9% 112 URBAN OUTFITTERS INC URBN 5.5% 99 SCRIPPS NETWORKS INTERACT IN SNI 3.1% 79 ETFS PLATINUM TR PPLT 3.5% 74 WABCO HLDGS INC WBC 2.9% 55 LIBERTY MEDIA CORP NEW LSTZA 8.2% 55 ISOFTSTONE HLDGS LTD ISS 8.4% 22 INTERNATIONAL flavours&FRAGRA IFF 3.2% 11 

His new stock picks returned 4.4% since the end of last year, underperforming the SPY by 2.6 percentage points. Mandel bet nearly $700 Million on Citigroup. Bruce Berkowitz’s Fairholme, Lee Ainslie’s Maverick Capital, George Soros, Bill Miller’s Legg Mason Capital Management, Bill Ackman’s Pershing Square, David Tepper’s Appaloosa, Daniel Loeb’s Third Point, Andreas Halvorsen’s Viking Global, Richard Perry’s Perry Capital, Joseph DiMenna’s Zweig-DiMenna, Leon Cooperman’s Omega Advisors, Brevan Howard, and John Paulson’s Paulson & Co are among the prominent investors who are bullish about Citigroup. Stephen Mandel made more than 14% from his nearly $600 Million Schlumberger bet. T. Boone Pickens also has SLB in his portfolio. Value investor Mohnish Pabrai has large amounts of TCK, Mandel’s third biggest bet, in his portfolio. Lone Pine Capital also bet on Platinum and Palladium, like Dan Loeb did during the fourth quarter.

During the fourth quarter, Lone Pine increased 10 positions by at least 20%. Most of the positions saw at least $50 Million in new purchases. Here is how these 10 stocks performed:

Company Ticker Return Value (Million) HOME INNS & HOTELS MGMT INC HMIN -16.5% 21 INFORMATICA CORP INFA 10.4% 145 EXPRESS SCRIPTS INC ESRX 5.0% 419 TOWERS WATSON & CO TW 12.3% 181 DOLLAR GEN CORP NEW DG -4.6% 417 VANCEINFO TECHNOLOGIES INC VIT -6.0% 145 NETAPP INC NTAP -3.5% 254 WYNDHAM WORLDWIDE CORP WYN 7.0% 232 EQUINIX INC EQIX 12.0% 328 CHINA LODGING GROUP LTD HTHT -21.3% 23 

The weighted average return of these stocks was 3.2% since the end of December, underperforming the SPY by 3.8 percentage points. During the fourth quarter, Lee Ainslie made a $21 Million purchase in the obscure Chinese company China Lodging Group Ltd (HTHT). Two tiger cubs managing more than 10 billion dollars purchasing the small cap stock around the same time can’t be a coincidence. Blue Ridge Capital’s John Griffin and Glenview’s Larry Robbins also have large ESRX positions in their portfolios. So far the 2011 performance of these doesn’t look spectacular.

Fortunately for his investors, the rest of his portfolio performed slightly better. Here is how his largest positions performed this year:

Company Ticker Return Value (Million) CITIGROUP INC C 3.8% 687 YUM BRANDS INC YUM 4.9% 606 SCHLUMBERGER LTD SLB 14.1% 585 APPLE INC AAPL 8.7% 553 cognisant TECHNOLOGY SOLUTIO CTSH 6.1% 477 TECK RESOURCES LTD TCK -10.9% 455 SPDR GOLD TRUST GLD -2.4% 448 EXPRESS SCRIPTS INC ESRX 5.0% 419 DOLLAR GEN CORP NEW DG -4.6% 417 GOODRICH CORP GR 3.7% 397 POLO RALPH LAUREN CORP RL 15.4% 385 JPMORGAN CHASE & CO JPM 13.3% 344 EQUINIX INC EQIX 12.0% 328 CROWN CASTLE INTL CORP CCI -0.1% 327 AMERIPRISE FINL INC AMP 12.8% 311 AMPHENOL CORP NEW APH 8.7% 267 MEAD JOHNSON NUTRITION CO MJN -1.5% 260 NEW ORIENTAL ED & TECH GRP I EDU -7.8% 257 NETAPP INC NTAP -3.5% 254 LAUDER ESTEE COS INC EL 17.1% 245 FAMILY DLR STORES INC FDO 5.7% 235 WYNDHAM WORLDWIDE CORP WYN 7.0% 232 TRANSDIGM GROUP INC TDG 13.2% 208 ACCENTURE PLC IRELAND ACN 10.6% 201 SCHWAB CHARLES CORP NEW SCHW 14.0% 189 TOWERS WATSON & CO TW 12.3% 181 O REILLY AUTOMOTIVE INC ORLY -8.6% 181 DICKS SPORTING GOODS INC DKS 1.4% 179 CTRIP COM INTL LTD CTRP -2.4% 174 CABLEVISION SYS CORP CVC 11.2% 173 UNION PAC CORP UNP 4.8% 173 MASTERCARD INC MA 12.0% 171 DAVITA INC DVA 14.6% 170 LINCARE HLDGS INC LNCR 10.3% 168 AUTODESK INC ADSK 13.6% 165 VANCEINFO TECHNOLOGIES INC VIT -6.0% 145 INFORMATICA CORP INFA 10.4% 145 QUALCOMM INC QCOM 19.6% 125 ETFS PALLADIUM TR PALL 5.9% 112 URBAN OUTFITTERS INC URBN 5.5% 99 

Stephen Mandel’s top 40 positions had a weighted average return of 5.7% since the end of December, underperforming the SPY by 1.3 percentage points. The most dominant pattern we’ve observed in Lone Pine Capital’s portfolio is that it shares a lot of stocks with other Tiger cubs. For instance, the only other hedge fund we follow with VanceInfo Technologies Inc (VIT) position is Lee Ainslie’s. In fact, fifteen of the 52 stocks in Mandel’s portfolio are also in Lee Ainslie’s portfolio. These stocks are C, AAPL, JPM, QCOM, URBN, DG, GR, LFT, CTSH, HMIN, DVA, VIT, SVN, HTHT, and ISS.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.