Stephen Mandel's Lone Pine Bullish On Education Plays ~ market folly

Monday, February 8, 2010

Stephen Mandel's Lone Pine Bullish On Education Plays

In a 13G filed with the SEC, Stephen Mandel's hedge fund Lone Pine Capital has disclosed an updated stake in New Oriental Education (EDU). Per the filing, they now have a 6.5% ownership stake with 9,916,436 shares of common stock based on direct ownership of 2,479,109 American depositary shares (ADRs).

The filing was made due to activity on January 26th, 2010 and is a large increase over their previous stake. Back on September 30th, they owned 486,828 shares when we looked at Lone Pine's portfolio. They'll be filing updated portfolio disclosures in their 13F filing and we'll cover that when it becomes available. We've known Mandel and his fund to be bullish on education plays as they have additionally been long Strayer Education (STRA).

In Mandel's recent commentary, he noted that Lone Pine is focused on investments in outsourcing, smartphones, emerging market consumer-driven companies, national and global financial service leaders and internet-enabled business disrupters. Conversely, they are shorting companies that have been hurt by technological obsolescence and companies in industries with global overcapacity. Their main fund, Lone Cypress, returned 17.7% for 2009.

In the past we've detailed some of Lone Pine's other holdings, including a position in MSCI (MXB) and also a stake in Green Mountain Coffee Roasters (GMCR). Additionally, we've looked at their UK positions as well.

Taken from Google Finance, New Oriental Education is "a provider of private educational services in the People’s Republic of China. The Company offers a range of educational programs, services and products consisting of English and other foreign language training; test preparation courses for admissions and assessment tests in the United States, the People’s Republic of China and Commonwealth countries; primary and secondary school education; development and distribution of educational content; software and other technology, and online education."

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