Lone Pine Capital starts new positions in BIDU, MA, DVA, P, Sells ISRG, RL – 13F Flash (A)
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Lone Pine Capital LLC, based in Greenwich, Connecticut, was founded in 1997 by Stephen Mandel and is one of the largest equity-focused hedge funds in the United States. It is estimated to have $28.3 billion of assets under management.
In Q3 2013, it started new positions in Baidu Inc. (BIDU), MasterCard Inc. (MA), Davita Healthcare Partners (DVA), and Pandora Media (P) and sold Intuitive Surgical Inc. (ISRG) and Ralph Lauren Corp. (RL).
Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).
Why purchase Baidu (BIDU)?
Chinese search giant Baidu reported strong results in the third quarter, as revenue remained on a solid growth trajectory. Mobile search revenues in particular saw an increase. In terms of guidance, the company expects total revenues for the fourth quarter to be between $1.51 billion and $1.55 billion, representing a 45.5% to 49.6% year-over-year increase. The company is stepping up efforts to expand into the mobile search and software applications segment. With the acquisition of 91 Wireless at the end of July, it has strengthened its mobile native app distribution capabilities. It also introduced search-enabled Light Apps, which will allow users to more easily discover long-tail app content and will offer developers a powerful distribution channel in Baidu mobile search. The company has also forayed into the financial services segment by launching Baidu Finance Centre in cooperation with China Asset Management. It aims to offer depositors an 8% annual return. With this launch, Baidu will compete with Alibaba and Tencent Holdings, which already offer financial products to users.
Lone Pine Capital founder Stephen Mandel graduated from Dartmouth College in 1978 and received his MBA from Harvard Business School in 1982. He has worked as an analyst and consultant at several major firms, from Tiger Management to Goldman Sachs. He uses a bottom-up, fundamental approach for selecting stocks that focuses on the fundamentals of the company against macroeconomic events and indicators.