Jim Cramer and Billionaire Stephen Mandel Like Apple and More
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Jim Cramer is well known as a financial commentator on CNBC, but another way to see which stocks the former hedge fund manager likes is to review which stocks are owned by his charitable trust. We decided to compare the list of stocks that the trust currently reports owning to those which billionaire and Tiger Cub Stephen Mandel’s $17 billion hedge fund Lone Pine Capital have in its portfolio. Here are the four stocks which Lone Pine reported owning in its most recent 13F filing (see more of Mandel's stock picks) that are also in Cramer’s charitable trust’s portfolio:
The hedge fund owned 12.6 million shares of eBay (NASDAQ: EBAY), making it Lone Pine’s 6th largest 13F holding by market value, while Cramer’s trust had a position of 1,800 shares. The online marketplace and owner of PayPal reported earnings growth of 22% in the third quarter compared to the same period in 2011, driven mostly by 15% revenue growth but also by higher margins. Billionaire Steve Cohen’s SAC Capital Advisors was yet another owner of the stock, increasing its stake during the third quarter (check out Steve Cohen's stock picks). eBay trades at 18 times trailing earnings, though analysts actually expect lower earnings per share in 2013. We think that it’s worthy of further consideration.
Mandel and his team cut their stake in Apple (NASDAQ: AAPL) by 43% during the third quarter, but they still owned about 810,000 shares at the end of September and it was another stock that Cramer’s charitable trust owned as well. Apple’s volatility has left it currently trading at a trailing P/E of 12, which is very low for such a dominant company as long as it can continue growing its earnings even modestly. Billionaire Ken Fisher jumped on the Apple bandwagon over the summer, with Fisher Asset Management’s holdings approaching a million shares of stock (find Ken Fisher's favorite stocks). Apple also looks like a good value to us, as we’d expect at least some growth at the company.
The Walt Disney Company (NYSE: DIS) was another common pick between the two investors. Disney also has earnings multiples in the teens, with trailing and forward P/Es of 16 and 13 respectively. The company’s parks business is doing well and with ESPN it owns one of the biggest properties in cable TV, and we see that its performance has paid off on the bottom line with 14% growth in net income last quarter versus a year earlier. The valuation is high enough that we’re not quite as confident in it as a buy, but certainly if it can continue double-digit growth rates for some time it would offer “growth at a reasonable price” and it might be another good name to look at.
Cramer’s trust owned shares of Schlumberger (NYSE: SLB), while Lone Pine initiated a position of 6.4 million shares. An increase in activity in oil and gas plays has boosted Schlumberger, as the $95 billion market cap oilfield services company has seen about 10% growth in revenue and earnings over the last year. It is priced at 17 times trailing earnings, suggesting that investors anticipate continued strong growth at the company. For purposes of comparison, peer Halliburton (NYSE: HAL) trades at 11 times earnings whether we consider trailing performance or consensus estimates for 2013. That is quite a bit of a discount, though Halliburton actually experienced a decline in earnings in the third quarter relative to Q3 2011. We still think that Halliburton is a better value at these prices, but if the multiples start moving towards each other then we could see Schlumberger being the more attractive investment as its business has been performing better recently.
This article is written by Matt Doiron and edited by Meena Krishnamsetty. Meena has long positions in AAPL and HAL. The Motley Fool owns shares of Apple, Walt Disney, and Halliburton Company. Motley Fool newsletter services recommend Apple, Walt Disney, eBay, and Halliburton Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!