We recently published a list of Philippe Laffont Stock Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where Eaton Corporation plc (NYSE:ETN) stands against other stocks of Philippe Laffont's Stock Portfolio.
Founded by Philippe Laffont, Coatue Management is a lifecycle investment platform that is focused on turning big ideas into world-shaping technology companies. Laffont established Coatue Management in 1999 and has earlier gained experience as a “Tiger Cub” while working at Julian Robertson’s Tiger Management hedge fund. The company makes investments across public and private markets and has a focus on technology, media, consumer, telecommunications and healthcare sectors. The company’s lifecycle investment platform expanded across venture, growth, thematic, and structured capital strategies.
Coatue’s Investment Approach
The company’s investment philosophy revolves around a technology-centric approach. This approach stems from the belief that technological innovation is the key factor fueling economic growth and it possesses the potential to disrupt traditional sectors. As investors, the company tends to focus on seeking out the greatest innovators with the biggest ideas. The company has recently announced its continued deep partnership with Norm Ai by leading the latest investment. Norm Ai focuses on enabling regulated businesses to reap the benefits of the GenAI, with their government-grade regulatory AI product. Overall, the mission is to enable companies to do more, and yet maintain robust compliance scrutiny.
Industrial Base is Expected to Transform, says Coatue
As per Coatue, for the much of 20th century, the defense sector was responsible for technological breakthroughs – from the internet to GPS. However, in recent decades, its role as a key driver of innovation has diminished. That being said, the investment management firm said that the US industrial base is at a pivotal moment. A wave of innovation has been emerging, fueled by new government initiatives, groundbreaking technologies, and an urgent need for modernization. The defense sector, which was once a sector not suitable for startups and innovators, is now opening. The firm believes that organizations and instruments, such as the Defense Innovation Unit (DIU) and Other Transaction Authorities (OTA), continue to accelerate the pace of partnerships between the government and private companies.
The disruptors believe that even the most entrenched systems could be transformed with the help of innovation, placing new standards for agility, cost-efficiency, and impact, says the investment firm. Overall, it expects the industrial base of the future to revolve around unmanned/autonomous systems, nuclear-powered energy, robotic manufacturing, and a completely new space economy.
Amidst these trends, we will now have a look at the Philippe Laffont Stock Portfolio: Top 10 Stock Picks.
Our Methodology
To list the Philippe Laffont Stock Portfolio: Top 10 Stock Picks, we selected the top 10 stocks in Coatue Management’s portfolio as per its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Coatue Management’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Eaton Corporation plc (NYSE:ETN): One of Philippe Laffont Stock Portfolio's Top 10 Stock Picks
A technician standing in the middle of a power station, inspecting a power distribution system.
Eaton Corporation plc (NYSE:ETN) operates as a power management company. Bank of America Securities analyst Andrew Obin reiterated the bullish stance on the company’s stock, offering a “Buy” rating on March 6. The analyst opines that the company’s capacity additions, mainly in North America, can fuel organic growth in the Electrical Americas segment. Eaton Corporation plc (NYSE:ETN) continues to strategically expand its capacity to address demand, which is backed by a healthy order book. The company’s prudent approach, together with the potential for margin improvement in critical markets such as utility and data centers, aids the anticipation of continued earnings growth.
By 2030, Eaton Corporation plc (NYSE:ETN) expects to deliver an organic revenue CAGR of between 6% to 9% and an adjusted EPS CAGR of more than 12%. While the company remains committed to delivering increased margins and solid free cash flow, its strong balance sheet allows financial flexibility to allocate capital in a disciplined and balanced way. Eaton Corporation plc (NYSE:ETN) remains well-positioned to capitalize on the global trend towards electrification. With companies and consumers pivoting towards electric solutions, the demand for sophisticated power management systems continues to increase rapidly. The company’s expertise in electrical systems, power distribution, and energy storage positions it well amidst the transition.
Overall, ETN ranks 6th on our list of top 10 stock picks of Philippe Laffont's stock portfolio. While we acknowledge the potential of ETN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than ETN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
