Chase Coleman's High-Upside Stock Picks

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 |  Includes: AAPL, AMZN, GOOG, LBTYA, MA, PCLN, V
by: Insider Monkey

Chase Coleman, founder of Tiger Global Management, was seeded by Julian Robertson and is one of the most successful tiger cubs. Though Coleman is young, his track record is quite good compared with other famous hedge fund managers who have been in the industry for decades. For example, during the stock crash this August, Coleman’s Tiger Global Management delivered double-digit returns, while John Paulson’s fund suffered losses. Tiger Global returned 21% annually since its inception in 2001. We believe that by focusing on the stock picks of Coleman, especially those with high upside potentials, investors are more likely to outperform the market in the long term.

Below we compiled a list of Coleman’s stock picks with high upside potential. All companies have at least $10 billion market cap and analyst recommendation scores lower than 2.5 (1=strong buy, 2=buy, 3=hold, 4=sell, 5=strong sell). The market data is sourced from Finviz.

Company Name

Ticker

Value

Activity

Analyst Recom

APPLE INC

AAPL

646223

13%

1.7

LIBERTY GLOBAL INC

LBTYA

329774

30%

1.9

AMAZON COM INC

AMZN

299987

6%

2.2

MASTERCARD INC

MA

244586

29%

1.8

VISA INC

V

231590

42%

1.7

PRICELINE.COM INC

PCLN

205913

42%

2

GOOGLE INC

GOOG

33555

-26%

1.7

Click to enlarge

Coleman’s stock picks with the highest upside potential are Apple Inc (NASDAQ:AAPL), Visa Inc (NYSE:V), and Google Inc (NASDAQ:GOOG). These three stocks’ average analyst recommendation scores are only 1.7, the lowest among the stocks listed above. At the end of September, Coleman’s Tiger Global reported to own $646 million of AAPL, $232 million of V, and $34 million of GOOG stocks. Except AAPL, both V and GOOG outperformed the market since the end of September. V returned 20.62% and GOOG gained 24.73% so far in the fourth quarter, while SPY returned 12.17% in the same period.

AAPL, on the other hand, returned 6.24%, underperforming the market by nearly 6 percentage points. But AAPL has great potential to grow in the near future. Besides its low analyst recommendation score, it has a relatively low P/E ratio of 14.64 and it is very popular among hedge funds. According to our statistics, there are 125 hedge funds, including Rob Citrone’s Discovery Capital Management and Stephen Mandel’s Lone Pine Capital, with AAPL positions in their portfolios at the end of the third quarter.

During the third quarter, Coleman’s Tiger Global boosted its stakes in Liberty Global Inc (NASDAQ:LBTYA) by 30%. At the end of September, the fund disclosed owning $330 million worth of LBTYA shares. Since then, LBTYA returned 13.13%, versus 12.17% for SPY in the same period. The average analyst recommendation score for the stock is 1.9, indicating some form of perceived value of LBTYA. Beside Coleman’s Tiger Global, John Griffin’s Blue Ridge Capital also invested $153 million in this stock.

Other stocks with high upside potential that Coleman is bullish about include Amazon.com Inc (NASDAQ:AMZN), MasterCard Inc (NYSE:MA), and Priceline.com Inc (NASDAQ:PCLN). We like Coleman. We encourage investors to do some in-depth research on the stocks that Coleman likes and imitate his best stock picks.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.