We recently compiled a list of the Top 10 Stocks to Buy According to Lone Pine Capital. In this article, we are going to take a look at where Philip Morris International Inc. (NYSE:PM) stands against the other  stocks.

Lone Pine Capital, established in 1997 by Stephen Mandel, is a leading hedge fund and investment advisory firm based in Greenwich, Connecticut. The firm also operates offices in major financial hubs, including London, New York City, and San Francisco. Over the years, Lone Pine Capital has built a strong reputation in the investment world, focusing on long-term growth strategies. The firm’s disciplined approach to stock selection and asset management has enabled it to maintain a significant presence in the hedge fund industry.

Stephen Mandel, the founder of the firm, has had an extensive career in finance even before launching Lone Pine Capital. He previously worked as a managing director at Tiger Management, gaining valuable experience in investment strategy. A graduate of Dartmouth College with a degree in government, Mandel later earned an MBA from Harvard University. His expertise and leadership led to his ranking in the highest-earning categories among Forbes’ top hedge fund managers multiple times between 2012 and 2018. Although Mandel stepped away from active investment management in 2019, he continues to serve as a managing director at the firm. As of Q4 2024, Lone Pine Capital managed nearly $13.5 billion in 13F securities spread across 30 companies, with its top 10 holdings accounting for 55.89% of its portfolio.

Lone Pine Capital’s investment philosophy is rooted in identifying transformative changes that can unlock or accelerate value. By leveraging institutional knowledge and deep expertise across sectors and global markets, the firm continuously reassesses its investment theses and uncovers new opportunities. It strategically times market entry by recognizing key turning points in economic and industry cycles, allowing it to capitalize on shifts before they become widely apparent. The firm also prioritizes long-term value creation, typically holding investments for two to three years, though it has held stocks of certain companies for decades. This disciplined approach aligns investment timelines with investor expectations, optimizing returns. Additionally, Lone Pine Capital remains highly responsive to innovation in various forms—whether through technological advancements, business model evolution, or leadership changes—adapting its strategies based on emerging data and shifting market dynamics.

Moreover, the hedge fund's investment strategies are designed to achieve long-term capital appreciation through a disciplined and research-driven approach. For its long-only strategy, the firm focuses on high-conviction investments in companies with strong growth potential, maintaining a diversified portfolio primarily across North America and Europe while limiting exposure to emerging markets. Its long/short equity strategy follows a similar approach, combining concentrated long positions with a diversified selection of short investments to navigate market fluctuations effectively. Net exposure varies based on market conditions and available opportunities, ensuring flexibility in positioning. In private investments, the firm applies its extensive research capabilities to identify promising companies in sectors such as software, financial technology, healthcare, and consumer markets. By targeting capital-efficient businesses with significant public market potential, Lone Pine Capital seeks to maximize returns through selective, high-impact investments.

Our Methodology

The stocks discussed below were picked from Lone Pine Capital’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 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).

A man exhaling smoke from a cigarette indicating the use of tobacco products.

Philip Morris International Inc. (NYSE:PM)

Number of Hedge Fund Holders as of Q4: 102

Lone Pine Capital’s Equity Stake: $778.47 Million 

On February 6, 2025, Philip Morris International Inc. (NYSE:PM) posted its financial results for the quarter ending December 2024, with net sales surging 7.3% year over year to $9.71 billion compared with estimates of $9.44 billion, thanks to strong growth from its products ZYN and IQOS. Moreover, earnings per share increased 14% year-over-year to $1.55 against analysts' expectations of $1.50 per share. Additionally, the company declared a regular quarterly dividend of $1.35 per share, or an annualized $5.40 per share, reflecting its commitment to shareholder value. These results reinforce Philip Morris’ dominant position in the tobacco industry.

Philip Morris International Inc. (NYSE:PM) projected stronger-than-expected profit growth for 2025, driven by the rapid expansion of its nicotine pouch brand, ZYN, and increasing demand for smoke-free alternatives. The company's shares surged nearly 10% following the announcement. As consumers seek alternatives to traditional cigarettes due to health concerns, PMI’s heated tobacco device, IQOS, and ZYN have gained significant traction. The U.S. Food and Drug Administration recently granted PMI authorization to market ZYN in the country, citing its lower levels of harmful substances compared to traditional tobacco products. Chief Financial Officer Emmanuel Babeau emphasized that all three business segments—ZYN, IQOS, and traditional cigarettes—will contribute to growth in 2025, bolstering both revenue and profitability.

Philip Morris International Inc. (NYSE:PM), which distributes Marlboro cigarettes globally, expects adjusted annual earnings per share between $7.04 and $7.17, surpassing analysts' estimates of $7.03. The company also anticipates a significant rise in ZYN shipments to the U.S., its largest market, with an estimated increase of 34% to 41%, while IQOS shipments are expected to grow by 10% to 12%. Barclays analyst Gaurav Jain noted that PMI’s projections for profits, sales volume, and revenue exceeded expectations, reinforcing investor confidence. Historically, the company has been conservative in its forecasts early in the year, leading investors to speculate on potential upward revisions as the year progresses, contributing to the stock’s strong performance.

Overall PM ranks 3rd on our list of the stocks to buy according to Lone Pine Capital. While we acknowledge the potential for PM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: 20 Best AI Stock To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

 

Disclosure: None. This article is originally published at Insider Monkey.