Just wanted to remind everyone that Alphaclone has rebalanced all the hedge fund portfolios in their database to reflect the latest changes per the new 13F filings. Head over there to see what positions our Market Folly portfolio now owns. Additionally, you can see what all the individual top hedge fund managers have been buying and selling. It's by far the best hedge fund replication tool we've ever used as you can backtest strategies and find the most popular holdings with ease.
Saturday, February 20, 2010
John Paulson Ramps Up Financials Exposure: 13F Filing
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up is John Paulson's hedge fund firm Paulson & Co. Before rocketing to hedge fund fame, Paulson managed a seemingly mediocre merger arbitrage fund. All of that quickly changed when he shorted collateralized debt obligations and bought credit default swaps in 2005 for his new trade against subprime. At the end of 2007, the Opportunities fund was up 590% and his Opportunities II fund was up 353%.
Wall Street Journal columnist Gregory Zuckerman detailed the impressive wager in the book, The Greatest Trade Ever, one we highly recommend reading. Such amazing performance led Paulson's hedge funds to be the #1 and #4 funds as ranked in Barron's hedge fund rankings (top 100).
For 2009, Paulson's Advantage fund was up 13.75%, his Advantage Plus up 21%, Credit Opportunities up 34%, and Recovery fund up 24.2%, all as noted in our hedge fund performance numbers post. Nowadays, Paulson has found his next big bet: a wager against the US dollar which he is executing via his new gold fund. Next we'll examine their holdings to see what other wagers they are making.
Below are Paulson & Co's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.
Brand New Positions
Apollo Group (APOL)
Bank of America (BAC-S preferred)
Burlington Northern Santa Fe (BNI) ~ this was a merger arb play and is obviously no longer in the portfolio
CIT Group (CIT) ~ most likely a result of a debt to equity conversion
Chattem (CHTT)
Comcast (CMCSA)
Capital One (Warrants expiring 11/14/2018)
DirecTV (DTV) ~ as a result of the Liberty Media transaction
Encore Acquisition (EAC)
Hyatt Hotels (H)
IMS Health (RX)
JP Morgan Chase (Warrants)
Kraft (KFT)
Lear Corp (LEA)
Liberty Media (LSTZA) ~ again, part of the Liberty Media transaction
Macerich (MAC)
Mead Johnson (MJN)
New York Community Trust (NYB)
Northern Trust (NTRS)
Pfizer (PFE)
Sprint Nextel (S)
3 Com (COMS)
Vail Resorts (MTN)
Valley National Bancorp (VLY)
Wells Fargo (WFC)
XTO Energy (XTO)
Increased Positions
Suntrust Bank (STI): Increased by 1925.4% (not a typo, their previous position was small)
Conseco (CNO): Increased by 579.3%
Ashford Hospitality Trust (AHT): Increased by 283.4%
JPMorgan Chase (JPM): Increased by 250%
Felcor Lodging (FCH): Increased by 247.8%
Marshall & Ilsley (MI): Increased by 117.1%
Citigroup (C): Increased by 68.9%
Sunstone Hotels (SHO): Increased by 25.8%
Pepsi Bottling Group (PBG): Increased by 4%
Gold Fields (GFI): Increased by 2.4%
Starwood Hotels (HOT): Increased by 1.54%
First Horizon National (FHN): Increased by 1.5%
Reduced Positions
Regions Financial (RF): Reduced by 44.7%
Bank of America (BAC): Reduced by 5.5%
Removed Positions (Sold out completely):
CF Industries (CF)
Cemex (CX)
Liberty Media (LMDIA) ~ part of the transaction
Old National Bancorp (ONB)
People's United Financial (PBCT)
Ultrashort Financial (SKF)
Schering Plough (SGP) ~ merger transaction complete
Varian (VARI)
Wyeth (WYE) ~ merger transaction complete
Top 15 Holdings by percentage of assets reported on 13F filing
- SPDR Gold Trust (GLD): 17.07%
- Bank of America (BAC): 11.49%
- Anglogold Ashanti (AU): 8.70%
- Citigroup (C): 8.47%
- Boston Scientific (BSX): 4.51%
- Comcast (CMCSA): 3.75%
- Sun Microsystems (JAVA): 3.50%
- Capital One (COF): 3.30%
- Suntrust (STI): 3.11%
- Kinross Gold (KGC): 2.95%
- Wells Fargo (WFC): 2.39%
- XTO Energy (XTO): 2.35%
- Philip Morris International (PM): 2.19%
- Pepsi Bottling Group (PBG): 1.97%
- IMS Health (IMS): 1.91%
First and foremost we want to address a lot of misinformation that has been floating around regarding Paulson & Co's stake in exchange traded fund GLD. This position is a HEDGE for them. Most hedge funds have share classes denominated in US dollars. While Paulson has this as well, they also have a hedge fund share class denominated in gold. As such, they've stated in the past that their position in GLD is a hedge for this share class.
Many people out there misinterpret this as outright bullishness on gold. After all, it is a truly massive position in GLD that shows up on filings. Paulson is expecting massive inflation and is focused on a bet against the US dollar. He's expressed this bet via his brand new gold fund that invests primarily in the equity of gold mining companies and then also some derivatives on the price of gold. Hopefully this clarifies things and if not, make sure to check out our in-depth examination of Paulson's gold fund.
Turning to Paulson & Co's latest 13F filing, we must remind everyone that a lot of these positions are a result of Paulson's merger arbitrage strategy. Before Paulson became famous with his bet against subprime that netted him billions, he was (and still is) focused on merger-arb. So, keep in mind that a large number of his long positions disclosed here are most likely hedged with paired short positions either in other companies or possibly even against the box.
Paulson & Co took new positions in financials via warrants of JPMorgan Chase and Capital One, as well as preferred unit shares of Bank of America and common stock in SunTrust, Citigroup, and JPMorgan. Some of Paulson's "new positions" are deceiving because they didn't actually buy shares, but instead received equity as a result of various corporate transactions. This explains their 'new' stakes in CIT Group, DirecTV, and Liberty Media. Also, since Warren Buffett's Berkshire Hathaway has purchased Burlington Northern, Paulson & Co obviously no longer hold that position.
However, Paulson's largest new addition was in Comcast (CMCSA) as they brought it up all the way to their sixth largest US equity holding. We also note that Paulson & Co still maintains a large Boston Scientific position and we highlight this because David Einhorn's Greenlight Capital recently assembled a huge BSX position as well. In the past, many investors have voiced concerns about this not being a good investment. But then again, those people aren't Einhorn or Paulson. Lastly, more recent filings indicate that Paulson has added to positions and we've detailed those transactions as well.
Paulson 'sold' his stakes in Wyeth, Schering Plough, and Liberty Media as a result of mergers and other corporate transactions. One notable sale Paulson did make though was relinquishing almost half of his Regions Financial position. To learn more about Paulson and his success, we highly recommend reading The Greatest Trade Ever.
Assets from the collective holdings reported to the SEC via 13F filing were $19.79 billion this quarter compared to $17.1 billion last quarter, so a noticeable increase of well over $2 billion. Remember that these filings are not representative of the hedge fund's entire base of assets under management.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, and Warren Buffett's portfolio. Check back daily for our new updates.
Friday, February 19, 2010
Wall Street 2 Money Never Sleeps: New Trailer, Movie Out April 23rd
Oliver stone's upcoming film Wall Street 2: Money Never Sleeps will come out April 23rd, 2010 and we're sure Gordon Gekko enthusiasts are excited for the reprise of his role. Previously, we posted the initial trailer for the movie and have posted details about the film as well. The initial trailer didn't give us much, but it still built anticipation. Today we bring you a new trailer that is both longer and more in-depth.
Below is a video of the new Wall Street 2: Money Never Sleeps trailer courtesy of Trailerspy (hat tip to our buddy StockJockey).
If you've never seen the original, then how are you even still in the industry? Rectify that immediately here: Wall Street (on Blu-ray) or here Wall Street (20th Anniversary DVD).
"Someone reminded me that I once said, 'greed is good.' Now it seems it's legal... 'cause everyone's drinking the same Kool Aid." ~ Gordon Gekko
Warren Buffett's Portfolio: Fourth Quarter 13F Filing
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Warren Buffett needs no introduction. Seriously. If you don't know who he is, you shouldn't even be reading this.
Through his early Buffett partnerships to the modern days of Berkshire Hathaway (BRK.A), he is regarded as one of the most successful investors ever. While many would argue that Baupost Group's Seth Klarman could give Buffett a run for his money, Buffett has garnered quite a massive following due to his enormous returns over time. Needless to say, investors are always anxious to find out what he has bought or sold, and that's exactly what we're here to do today. To learn to invest like the legend himself, head to Warren Buffett's recommended reading list.
The positions listed below were Berkshire Hathaway's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.
Brand New Positions
n/a
Increased Positions
Republic Services (RSG): Increased by 128.7%
Iron Mountain (IRM): Increased by 107.6%
Beckton Dickinson (BDX): Increased by 25%
Walmart (WMT): Increased by 3.2%
Wells Fargo (WFC): Increased by 2.2%
Reduced Positions
Exxon Mobil (XOM): Reduced by 67%
United Health Group (UNH): Reduced by 65.4%
WellPoint (WLP): Reduced by 60.4%
Gannett (GCI): Reduced by 36.1%
ConocoPhillips (COP): Reduced by 34.3%
Ingersoll Rand (IR): Reduced by 27.6%
Johnson & Johnson (JNJ): Reduced by 26.5%
SunTrust Banks (STI): Reduced by 22.1%
Moody's (MCO): Reduced by 18.9% ~ we've detailed all of his sales as they've happened
CarMax (KMX): Reduced by 11.1%
Procter & Gamble (PG): Reduced by 9.2%
Removed Positions (Sold out completely):
Union Pacific (UNP)
Norfolk Southern (NSC)
These were both sold due to conflict with Berkshire's impending acquisition of Burlington Northern.
Top 15 Holdings by percentage of assets reported on 13F filing
- Coca Cola (KO): 19.7%
- Wells Fargo (WFC): 14.9%
- Burlington Northern Santa Fe (BNI): 13.1% ~ this won't show up in future filings
- American Express (AXP): 10.6%
- Procter & Gamble (PG): 9.2%
- Kraft Foods (KFT): 6.5%
- Walmart (WMT): 3.6%
- Wesco Financial (WSC): 3.38%
- ConocoPhillips (COP): 3.32%
- Johnson & Johnson (JNJ): 3.02%
- US Bancorp (USB): 2.68%
- Moody's (MCO): 1.47%
- Washington Post (WPO): 1.31%
- Nike (NKE): 0.87%
- M&T Bank (MTB): 0.78%
The name of the game for Warren Buffett was selling shares of other holdings in order to make way for their acquisition of Burlington Northern Santa Fe in its entirety. That massive purchase obviously will not show up in future filings and is Berkshire's largest purchase ever. Obviously when you're purchasing that large of an entity, you're not going to be buying much else. However, Buffett did also double down on his Iron Mountain and Repulic Services positions.
Buffett reduced 'health' holdings by selling over half of his UNH and WLP stakes. Additionally, he sold nearly 70% of his Exxon Mobil position. We've also covered Buffett's sales of MCO shares as they became somewhat frequent occurrences. It remains to be seen if those sales were more-so because Buffett felt the business was threatened or because he was trying to free up capital for his BNI acquisition. Buffett has maintained a large position in Kraft for a while now, but shares have been center stage as Bill Ackman's hedge fund Pershing Square recently acquired a large stake and the company recently sealed a deal to acquire Cadbury.
Keep in mind that there are also some positions that won't show up on the filing because they are non-equity stakes. Buffett acquired many of these during the heart of the crisis in 2008 and as such sealed these deals with ridiculously good terms (for him).
To hear some of Buffett's recent thoughts, we posted up his recent television interview. For analysis of Berkshire Hathaway (BRK.A / BRK.B), we noted that hedge fund T2 Partners deemed shares undervalued in their in-depth presentation. And lastly, make sure you check out Warren Buffett's recommended readings.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, and David Tepper's Appaloosa Management. Check back daily for our new updates.
Hedge Funds: Shortest Position Ever Against the Euro
Based on data reported to the CFTC, Societe Generale has released their latest monthly hedge fund report that examines what speculators are buying and selling across various asset classes. Their research indicates that hedge funds have again turned to sellers of US equities, but on a smaller level than before. This is something we saw last week when we noted hedge funds had their lowest net long position in equities since May 2009.
By far the most notable takeaway from the data though is the fact that hedge funds now have the most short position against the euro ever. €11.5 billion are short the euro, an astonishing figure. This is partially offset by a €4.4 billion long euro position, leaving a net short position of €7.1 billion. This of course is a result of Greek's sovereign issues and weak policy response. In commodities, they see that funds have deleveraged across the board. Overall, deleveraging and de-risking continue to be prevalent themes.
Embedded below is Societe Generale's monthly hedge fund report thanks to a Brazilian reader in New York:
You can also directly download a .pdf here.
To see what equity hedge funds have been buying and selling, you can stay up to date with our hedge fund portfolio tracking series and our coverage of a prominent hedge fund panel.
What We're Reading ~ 2/19/10
Greenlight Capital & Elliott Management back failed bank effort [FINalternatives]
Everybody talks their book [Abnormal Returns]
From cigar butts to business supermodels, an essay on Berkshire Hathaway [Manual of Ideas]
Analyzing the Carl Icahn & Lions Gate situation [Reformed Broker]
Phibro Chief founds new hedge fund [FINalternatives]
Great write-up on Stocktwits, a community we're proud to be a part of [peHUB]
Speaking of which, Stocktwits released a new beta site, definitely check it out [Stocktwits]
Meet the man who wants to be the Warren Buffett of restaurants [WSJ]
Canadian investors may soon be able to invest in Paulson & Co [WSJ]
A gloomy January for hedge funds [Dealbook]
Thursday, February 18, 2010
Paolo Pellegrini's PSQR Capital Annual Letter
Today we present you the annual letter from Paolo Pellegrini and his global macro hedge fund PSQR Capital. They ended up 2009 up 61.6%, largely due to a short treasuries trade they put on very early in the year. (You can see how PSQR fared against other hedge fund performance numbers here). Pellegrini of course left John Paulson's hedge fund Paulson & Co to start his own firm after enjoying large success shorting subprime.
In the past, we've gotten a glimpse at Pellegrini's portfolio and have posted up a previous investor letter. His annual letter, however, is chalk full of much more in-depth macro insight. PSQR's outlook for 2010 is entitled 'The Rubber Meets the Road' and they have expressed the following investment views:
- Short US fixed income
- Short US equities
- Short US dollar
- Long commodities
These are by no means new revolutionary investment theses. After all, we've covered how many hedge funds have had similar trades on. PSQR though believes that 2010 will present structural problems and expect cyclical indicators to peak in the first quarter of this year and then decelerate after that. Pellegrini notably ends his letter with a gloomy outlook as he writes, "Both the US and the global economy continue to suffer distortions from a refusal to come to grips with this reality, whether through lack of understanding or because of political calculation, or some combination of the two. Eventually, there must be a reckoning. In our judgment, that day may be much sooner than the markets suggest."
Embedded below is PSQR's 2009 annual letter and RSS & email readers will need to come to the site to view the document:
Simply put, Pellegrini notes that structural changes around the world still persist and there are many problems left unsolved. Many won't argue that point. On the equities side of things, it mainly becomes a question of whether or not a rally can persist after the liquidity-driven portion of the run-up has ceased. We'll just have to wait and see how things play out, but Pellegrini certainly lands in the "still bearish" camp.
For more great hedge fund letters full of investment insight, head to our coverage of:
- David Stemerman's Conatus Capital Q409 letter
- Perry Partners' annual letter
- Lee Ainslie's Maverick Capital annual letter
- David Einhorn's Greenlight Capital commentary
- Global macro hedge fund Woodbine Capital's thoughts
- Prologue Capital's macro takeaways
- Annual letter from Whitney Tilson's hedge fund T2 Partners
- Cheyne Capital's investor letter
- Corsair Capital Management's fourth quarter letter
Maverick Capital's Lee Ainslie: Decline In Price Of Risk = Opportunity For Shorts (Investor Letter)
Big shoutout to Dealbreaker for posting up this letter. Below you will find the commentary from Lee Ainslie's hedge fund Maverick Capital. We've heard a lot of investment insight from Maverick's manager as of late, in particular at Ainslie's recent hedge fund panel appearance.
Ainslie begins his letter with a series of quotations from Thomas Jefferson, including two very applicable observations: "Never spend your money before you have it" and "Never buy what you don't want, because it is cheap; it will be dear to you." Definitely words to invest by.
One of Ainslie's main assertions was that fundamental stockpicking was difficult in 2009 as the year opened with a large decline and subsequently rallied ferociously. He highlights how high growth stocks typically trade at higher premiums, but the whacky markets of 2008 and 2009 made the valuation differences negligible. Additionally, risk premiums expanded rapidly in 2008 and seemingly evaporated in 2009. He rattles off a list of many economic concerns and events that have taken place and essentially wonders how the markets are where they are. Ainslie notes, "Despite these uncertainties, virtually any measure of risk implies that today's investment environment is rather benign."
As such, the Maverick hedge fund manager is looking for success on the short side of the portfolio going forward. Many stocks are "discounting economic nirvana for 2011" and he says that "risk is not dear enough and that we may face a jolt to the price of risk, which would induce more rational valuations for many of our short investments." It's hard to argue with that given the vast snapback we saw in equity markets last year. Risk levels have seemingly reverted to pre-crisis levels and yet the economy is by no means out of the woods.
To learn more about Maverick, check out our profile/biography on Lee Ainslie & Maverick. Embedded below is their fourth quarter 2009 investor letter:
You can now directly download a copy via .pdf here.
Very interesting to hear Ainslie's thoughts on a range of topics. Unfortunately, while we received a nice macro overview, we didn't get too much insight into Maverick's portfolio positions. As such, we'll have to just rely on our upcoming coverage of their 13F filing in our hedge fund portfolio tracking series.
We've detailed numerous other investor letters and just discussed Conatus Capital's commentary (alliteration much?), global macro hedge fund Woodbine Capital's thoughts, the Perry Partners' letter, and in the past have looked at David Einhorn & Greenlight Capital's as well. Definitely check those resources out as they're chalk full of insight.
John Griffin's Blue Ridge Capital Buys McDonald's, Adds To JPMorgan Chase: 13F Filing
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up is John Griffin's hedge fund Blue Ridge Capital. Griffin graduated from the University of Virginia and holds an MBA from Stanford. Before starting Blue Ridge, he was Julian Robertson's right hand man at legendary hedge fund Tiger Management.
Blue Ridge invests in dominant companies and shorts those that have fundamental problems, all in search of absolute returns. Blue Ridge generally puts an investment into one of two categories: catalyst driven or time arbitrage. They realize that there are times where markets will be mis-priced as investment time horizons compress more than normal. They like to look for situations where people 'stop thinking.' To learn to invest like John Griffin, check out hedge fund Blue Ridge's recommended reading list.
The positions listed below were Blue Ridge's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
McDonald's (MCD)
Teva Pharmaceutical (TEVA)
Charles Schwab (SCHW)
Teradata (TDC)
Credicorp (BAP)
Ares Capital (ARCC)
Xinyuan Real Estate (XIN)
TD Ameritrade (AMTD)
Liberty Media (LSTZA)
Green Mountain Coffee Roasters (GMCR)
Washington Federal (WFSL)
First Niagara (FNFG)
Iberiabank (IBKC)
Increased Positions
JPMorgan Chase (JPM): Increased by 48.7%
Dollar Tree (DLTR): Increased by 22.7%
Range Resources (RRC): Increased by 19.4%
Crown Castle (CCI): Increased by 7.5%
Reduced Positions
Berkshire Hathaway (BRK-A): Reduced by 54.9%
Monsanto (MON): Reduced by 45.3%
Gold Miners ETF (GDX): Reduced by 42.8%
Equinix (EQIX): Reduced by 36.8%
iShares Silver Trust (SLV): Reduced by 36.1%
Blackrock (BLK): Reduced by 28.8%
Pfizer (PFE): Reduced by 24.4%
Visa (V): Reduced by 37.9%
Removed Positions (Sold out completely):
Palm (PALM)
Wynn Resorts (WYNN)
Exterran Holdings (EXH)
Whole Foods (WFMI)
RenaissanceRe (RNR)
Broadridge Financial (BR)
Top 15 Holdings by percentage of assets reported on 13F filing
- JPMorgan Chase (JPM): 6.78%
- Apple (AAPL): 5.52%
- Crown Castle (CCI): 5.49%
- Amazon (AMZN): 5.31%
- McDonald's (MCD): 4.53%
- Western Union (WU): 4.36%
- CME Group (CME): 4.16%
- Millipore (MIL): 4.12%
- Pfizer (PFE): 3.93%
- Thermo Fisher Scientific (TMO): 3.87%
- Microsoft (MSFT): 3.53%
- Express Scripts (ESRX): 3.12%
- Discovery Communications (DISCA): 3.07%
- Covanta (CVA): 2.95%
- Range Resources (RRC): 2.74%
Griffin's hedge fund also seems to be playing the online brokerage theme by adding shares in both TD Ameritrade and Charles Schwab. Competition in this industry has definitely heated up as of late as brokers slash commission prices in an effort to retain/gain customers. Turning to core positions, we note that Blue Ridge has held positions in Apple, Western Union, Millipore, Thermo Fisher, and Pfizer at the top end of their portfolio for multiple quarters now.
Their sale of Palm is notable as we've seen lots of pessimism surrounding this name as of late and many hedge funds out there have shorted Palm. Other complete sales were in casino Wynn Resorts and in grocer Whole Foods. Blue Ridge also reduced exposure across a number of names including Warren Buffett's Berkshire Hathaway and Monsanto. We found this intriguing because many hedge funds have been buying BRK while Blue Ridge reduced their size. On the Monsanto play, Blue Ridge joins a slew of other hedge funds that have been selling MON shares.
Although Blue Ridge barely added to their position in Crown Castle, we highlight it because it is now one of their largest positions and they have held it for 3+ quarters now. For those tracking these funds for investment ideas, it's always key to identify a fund's core holdings that they are less likely to turnover frequently. In fact, many hedge funds are bullish on tower stocks as we've highlighted recently.
Blue Ridge is a part of the 'Tiger Cub' portfolio created with Alphaclone where you can replicate top hedge fund positions. We've been very impressed with the solid backtested returns and current market outperformance.
For investing insight from Blue Ridge, we highly recommend checking out their suggested reading list. Assets from the collective holdings reported to the SEC via 13F filing were $5.3 billion this quarter compared to $4.4 billion last quarter, so a noticeable increase in long invested assets. Remember that these filings are not representative of the hedge fund's entire base of assets under management.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, and David Tepper's Appaloosa Management. Check back daily for our new updates.
David Tepper's Appaloosa Management Buys Airlines: 13F Filing Analysis
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
This is the first time we've looked at David Tepper's hedge fund Appaloosa Management in-depth as they're now in our tracking mix. Before founding his fund, Tepper was a high yield bond trader for Goldman Sachs. He likes to dig up companies that everyone else has called quits on and Appaloosa focuses on concentrated positions in both equities and distressed debt. A prime example of this was their purchase of numerous financial stocks in the heart of the financial crisis, a bet that has paid billions. After being one of the top hedge fund losers of 2008, Appaloosa has bounced back strong with their play on the financials. Some interesting facts about Tepper: he is from Pittsburgh and an owner of the NFL team, the Pittsburgh Steelers, and he has previously been listed on Forbes' billionaire list.
The positions listed below were Appaloosa's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
Wells Fargo (WFC)
AMR (AMR)
UAL (UAUA)
Delta Airlines (DAL)
Willis Group (WSH)
US Airways (LCC)
Navistar (NAV)
Hospitality Properties (HPT)
Increased Positions
Newcastle Investment (NCT): Increased by 529%
Gramercy Capital (GKK): Increased by 108.8%
Maguire Properties (MPG)): Increased by 89%
Citigroup (C): Increased by 73.2%
Conseco (CNO): Increased by 38.7%
Hartford Financial (HIG): Increased by 28.8%
Royal Bank of Scotland (RBS): Increased by 26.9%
Goodyear Tire & Rubber (GT): Increased by 25.5%
Reduced Positions
BB&T (BBT): Reduced by 52.3%
Valassis Communication (VCI): Reduced by 23.5%
Brunswick (BC): Reduced by 20.3%
Rite Aid (RAD): Reduced by 17.6%
Office Depot (ODP): Reduced by 16.9%
Removed Positions (Sold out completely):
Dana Holding (DAN)
Top 15 Holdings by percentage of assets reported on 13F filing
- Bank of America (BAC): 20.4%
- Citigroup (C): 19.2%
- Wells Fargo (WFC): 12.46%
- Fifth Third Bancorp (FITB): 9.97%
- SunTrust Banks (STI): 7.27%
- Hartford Financial (HIG): 6.10%
- Capital One (COF): 4.83%
- Microsoft (MSFT): 3.84%
- AMR (AMR): 1.94%
- UAL (UAUA): 1.65%
- Delta Airlines (DAL): 1.45%
- Willis Group (WSH): 1.32%
- Goodyear Tire & Rubber (GT): 1.18%
- Brunswick (BC): 1.14%
- Valassis Communication (VCI): 1.09%
As you can see, Tepper runs quite a concentrated portfolio and his theme of 'long financials' from the third quarter stays strong. He also added Wells Fargo to his stable this time around as the large stake makes it his third largest US equity holding. While Appaloosa also trimmed their Bank of America stake by 4.8%, the only notable sale in this sector was over half of their BB&T (BBT) position.
Tepper also added an entourage of airlines to his portfolio. While they aren't nearly as sizable as his financial stakes, it is quite a sweep of the sector and they all land in the top 10 holdings of Appaloosa's portfolio. Overall, not a ton of maneuvers, but still a pretty concentrated portfolio.
Assets from the collective holdings reported to the SEC via 13F filing were $3.39 billion this quarter compared to $2.6 billion last quarter, a noticeable increase due both to asset appreciation and new investments. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, and Stephen Mandel's Lone Pine Capital. Check back daily for our new updates.
Wednesday, February 17, 2010
Bill Ackman's Pershing Square Dumps McDonald's & EMC: 13F Filing Analysis
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up we have Bill Ackman's hedge fund Pershing Square Capital Management. Ackman runs a value and activist fund with a highly concentrated portfolio so they are ideal for tracking purposes. He received his degree from Harvard and his MBA from Harvard Business School. For investment insight from Ackman, check out his recent television appearance and Pershing's investor letter. For more information on the hedge fund, check out our profile of Bill Ackman & Pershing Square.
The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
Hyatt (H) *see special note regarding this position below
Landry's Restaurant's (LNY) ~ see our previous coverage of this addition
Increased Positions
Corrections Corp of America (CXW): Increased by 48.7%
Reduced Positions
Automatic Data Processing (ADP): Reduced by 98%
Target (TGT): Reduced by 20%
Removed Positions (Sold out completely):
EMC (EMC)
McDonald's (MCD)
Top Holdings by percentage of assets reported on 13F filing
- Target (TGT): 71.17%
- Corrections Corp of America (CXW): 19%
- Hyatt Hotels (H): 5.84%
- Landry's Restaurants (LNY): 2.34%
- Borders Group (BGP): 0.89%
- Greenlight Capital Re (GLRE): 0.42%
- Automatic Data Processing (ADP): 0.35%
Firstly, realize that the above list is not complete. We already saw that in January 2010, Ackman made Kraft (KFT) their largest holding and we detailed Pershing's presentation on KFT. Since the above positions were as of December 31st, their KFT stake doesn't show up. Additionally, as detailed in Ackman's previous investor letter, Pershing has started a Nestle position as well that doesn't show up in the filing.
Pershing Square also shows a new position in Hyatt Hotels (H) as of December 31st, 2009. However, this gets a little tricky as they also filed an amended 13G that shows Pershing owning 0 shares as of January 7th, 2010. So, upon inspection, it appears as if Pershing bought shares of H in the fourth quarter of 2009 and then sold out of the position in the first week of 2010. We're looking into this situation deeper to confirm this was the case, as we could have misinterpreted this.
The biggest story in Pershing's portfolio will be the removal of their McDonald's (MCD) and EMC (EMC) positions, both previously sizable stakes. Additionally, they sold practically all of their ADP as well. They had been buying shares of these companies over the past two quarters but decided to dump them recently. Ackman's hedge funds run highly concentrated portfolios and as such each shift is typically a major one. They also started a new stake in Landry's, and we already covered this addition when it happened.
Additionally, we see that Pershing added to their stake in Corrections Corp of America and we have previously posted Pershing's presentation on CXW. On the other side of the portfolio, we also know that Pershing has been short Realty Income (O) and we posted up their short thesis here.
Assets from the collective holdings reported to the SEC via 13F filing were $1.4 billion this quarter compared to $3.1 billion last quarter, so a notable decline in assets invested on the long side. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, and Stephen Mandel's Lone Pine Capital. Check back daily for our new updates.
Stephen Mandel's Lone Pine Capital Dumps Mastercard & Priceline: 13F Filing Analysis
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up is notable stockpicker Stephen Mandel and his hedge fund Lone Pine Capital. Mandel's firm is named after a historical lone pine tree at his alma mater, Dartmouth College. Before founding his own firm, Mandel worked at Julian Robertson's legendary Tiger Management. Lone Pine seeks to identify companies with good management teams that are trading below intrinsic value. Lone Pine's main fund, Lone Cypress, was up 17.7% for 2009 as noted in our 2009 hedge fund performance numbers post. Additionally, their Lone Kauri was up 12.1%, Lone Cascade up 44.4%, and Lone Dragon Pine up 72.9%
In terms of recent coverage, we got a glimpse that Lone Pine is bullish on education plays. Additionally, Mandel's hedge fund 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. In the past, we've also taken a brief look at Lone Pine's UK positions too.
The positions listed below were Lone Pine's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
Baxter International (BAX)
HSBC Holdings (HBC)
Accenture (ACN)
Wells Fargo (WFC)
Walt Disney (DIS)
YUM Brands (YUM)
Bank of America (BAC)
eBay (EBAY)
CVS Caremark (CVS)
Staples (SPLS)
Autodesk (ADSK)
Mead Johnson (MJN)
Marvel Entertainment (MVL)
Cninsure (CISG)
Increased Positions
Dr. Pepper Snapple (DPS): Increased by 335.6%
Estee Lauder (EL): Increased by 310%
Citrix (CTXS): Increased by 176%
Goodrich (GR): Increased by 96.1%
Walgreen (WAG): Increased by 88.4%
Popular (BPOP): Increased by 80.6%
New Oriental Education (EDU): Increased by 66.37% ~ we previously noted Lone Pine's addition to EDU shares
FLIR Systems (FLIR): Increased by 32.9%
Visa (V): Increased by 23.9%
McDonald's (MCD): Increased by 19.8%
Discovery Communications (DISCA): Increased by 11.7%
Reduced Positions
Vistaprint (VPRT): Reduced by 64.8%
Southwestern Energy (SWN): Reduced by 60.6%
Melco Crown (MPEL): Reduced by 48.9%
Mindray Medical (MR): Reduced by 34.6%
Smithfield Foods (SFD): Reduced by 32.8%
Apple (AAPL): Reduced by 18.3%
Hewlett-Packard (HPQ): Reduced by 13.4%
Removed Positions (Sold out completely):
Priceline.com (PCLN)
Mastercard (MA)
America Movil (AMX)
Coca Cola (KO)
Cmex (CX)
Liberty Media (LMDIA)
Walter Energy (WLT)
Coach (COH)
Philip Morris International (PM)
Fomento Economico Mexicano (FMX)
Huntington Bancshares (HBAN)
Top 15 Holdings by percentage of assets reported on 13F filing
- JPMorgan Chase (JPM): 7.43%
- Monsanto (MON): 6.82%
- Baxter International (BX): 6.25%
- Qualcomm (QCOM): 5.78%
- Apple (AAPL): 5.43%
- Visa (V): 4.88%
- McDonald's (MCD): 4.85%
- Hewlett-Packard (HPQ): 4.48%
- HSBC Holdings (HBC): 3.89%
- Accenture (ACN): 3.69%
- Green Mountain Coffee Roasters (GMCR): 3.16%
- Wells Fargo (WFC): 3.02%
- Strayer Education (STRA): 2.93%
- Walgreens (WAG): 2.88%
- Goodrich (GR): 2.70%
Lone Pine started new positions in HSBC, Accenture, Baxter, and Wells Fargo and they are all now top fifteen holdings. One of the biggest moves in Lone Pine's portfolio from a core holding standpoint was their sale of longstanding position America Movil (AMX). In previous quarters we had noted other hedge funds were selling this name while Lone Pine held. That is not the case anymore as they have finally sound completely out of AMX.
We also make strong note that they dumped Mastercard (MA) from their portfolio, normally a perennial hedge fund favorite holding. Instead, it seems they prefer Visa in the payment processing space. Typically, we've seen hedge funds hold both of the payment giants, but now it seems more managers select one or the other. Lastly, Lone Pine sold out of Priceline, also a previously large position for them. Overall though, Lone Pine still holds many of the most popular stocks held by hedge funds.
Remember that Stephen Mandel's hedge fund is a part of the Tiger Cub portfolio that was created with Alphaclone where you can easily replicate a portfolio of top hedge fund holdings. Assets from the collective holdings reported to the SEC via 13F filing were $9.8 billion this quarter compared to $8 billion last quarter, so they invested almost $2 billion more on the long side in US equities. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, and David Einhorn's Greenlight Capital. Check back daily for our new updates.
David Einhorn's Greenlight Capital Betting On Boston Scientific (BSX): 13F Analysis
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up is value investor David Einhorn and his hedge fund Greenlight Capital. As we learned in Einhorn's recent investor letter, Greenlight Capital has returned 22% annualized since inception, a truly solid track record. Their emphasis is typically on spin-offs, mergers, and other value unlocking events. For 2009, Greenlight's various hedge funds were up 36.9%, 33.7%, and 30.6% as mentioned in our 2009 hedge fund performance numbers post.
The positions listed below were Greenlight's long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
Boston Scientific (BSX ~ we already knew about this position from Einhorn's letter)
CIT Group (CIT)
Ralcorp Holdings (RAH)
Becton Dickinson (BDX)
Energy Partners (EPL ~ this one was a very small position)
Increased Positions
Foster Wheeler (FWLT): Increased by 92.9%
Pfizer (PFE): Increased by 23.5%
URS Corp (URS): Increased by 4.81%
Automatic Data Processing (ADP): Increased by 3.2%
Reduced Positions
Barrick Gold (ABX): Reduced by 94.7%
Huntsman (HUN): Reduced by 89.66%
Sinclair Broadcast (SBGI): Reduced by 80.7%
Teradata (TDC): Reduced by 66.2%
Patterson UTI (PTEN): Reduced by 62.3%
MEMC Electronics (WFR): Reduced by 60%
Nike (NKE): Reduced by 53.9%
Endurance Specialty Holdings (ENH): Reduced by 29%
BJ Services (BJS): Reduced by 26.7%
Ticketmaster (TKTM): Reduced by 25.9%
Removed Positions (Sold out completely):
EchoStar (SATS)
Danaos (DAC)
Teekay (TK)
Anixter (AXE)
Belden (BDC)
Crosstex Energy (XTXI)
Novatel Wireless (NVTL)
Duke Realty (DRE)
Smithfield Foods (SFD)
Aircastle (AYR)
Colonial Propeerties (CLP)
General Cable (BGC)
Liberty Media (LINTA)
Oshkosh (OSK)
Amkor (AMKR)
AerCap (AER)
Wyeth (WYE)
Top 15 Holdings (by percentage of assets reported on 13F filing)
- Boston Scientific (BSX): 10.54%
- Pfizer (PFE): 9.65%
- Carefusion (CFN): 7.81%
- Cardinal Health (CAH): 7.57%
- CIT Group (CIT): 6.25%
- URS (URS): 5.76%
- EMC (EMC): 4.48%
- Travelers Companies (TRV): 3.81%
- Aspen Insurance (AHL): 3.78%
- Einstein Noah Restaurants (BAGL): 3.78%
- Microsoft (MSFT): 3.71%
- Everest Re (RE): 3.01%
- HealthNet (HNT): 2.92%
- McDermott (MDR): 2.81%
- MI Developments (MIM): 2.49%
Another notable increase was that they almost doubled their stake in Foster Wheeler, though the position is still sized smaller relative to their overall portfolio. On the selling side, Greenlight was out in full force as they unloaded a ton of names and heavily reduced others such as Huntsman, Teradata, and Barrick Gold. Don't forget that Einhorn also has a large physical gold position that obviously doesn't show up in these filings, so that could partially explain the sale of that last position.
Keep in mind also that Greenlight also has numerous European equity positions that don't show up in a 13F filing and we know they have a large position in Vodafone Group and we also detailed their new position in F&C Asset Management. Assessing their entire portfolio, Greenlight's six largest disclosed long positions are Arkema, Boston Scientific, CIT Group, Ford Motor Company debt, gold, and Vodafone Group.
If you wanted to better understand how Greenlight hypothesizes and researches their investment themes, we highly recommend checking out Einhorn's book Fooling Some of the People All of the Time: A Long Short Story. Typically, Greenlight approaches things by identifying mispricings in the markets and then proceeding from there. Their performance track record speaks volumes as to their success.
.Assets from the holdings reported to the SEC via 13F filing were $2.79 billion this quarter compared to $2.66 billion last quarter. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund and Carl Icahn's hedge fund Icahn Partners so check back daily for our updates.
Tuesday, February 16, 2010
Hedge Fund Conatus Capital Bullish On Cloud Computing, Exits Education Plays
Conatus Capital hedge fund manager David Stemerman revealed some interesting facts about their portfolio in his fourth quarter commentary. For 2009, Conatus finished the fourth quarter up 2.86% and the year up 19.16%. You can see how they stacked up against other prominent hedge funds in our 2009 performance numbers post. Since their inception, Conatus has lost 1.98% compared to a decline of over 20% for the S&P over the same timeframe. Like many other hedge funds, they point out how difficult it was to make money on the short side when the whole market seems to go up nonstop.
New Longs
Hedge fund Conatus identified numerous new attractive investments including Unilever (UL) and Estee Lauder (EL) as they both have new management teams on track to improve the businesses and they think the market's valuations underestimate potential upside. A big theme going forward for them is cloud computing. They already were long Cisco (CSCO), but now own shares of Citrix (CTXS), VMWare (VMW), NetApp (NTAP), and Salesforce.com (CRM). In energy, they also added OGX (OGXPY) and Schlumberger (SLB) as OGX acquired a prominent oil exploration location and SLB is dominantly positioned in the off-shore oil exploration service business.
Exited Longs
Possibly the most notable information in their letter is the fact that Conatus has sold completely out of Apollo Group (APOL) and Strayer Education (STRA), two names we've seen many 'Tiger Cub' hedge funds fond of. This becomes all the more interesting given that Stemerman's former fund Lone Pine recently detailed they were bullish on education plays. Stemerman notes that Conatus exited the positions due to heightened government scrutiny and deterioration in their business prospects.
Conatus also exited Lloyds bank (LYG) as they didn't foresee the UK government forcing the bank to raise capital on terms that hurt shareholders. Additionally, they dumped their longs in Monsanto (MON) and Mindray Medical (MR) as they overestimated their respective competitive advantages. Lastly, they have trimmed many of their long positions that are reliant on emerging market demand as they no longer see the risk/reward skew as favorable.
Another interesting point Stemerman highlighted is that regulatory risk has become much more apparent in the investing world and they intend to be very cautious in this regard from now on. Going forward, they will hone in on quality of businesses and quality of management teams, among other factors.
Existing Long Positions
Stemerman highlights that their biggest gains came from internet plays in Amazon (AMZN), Google (GOOG), and Priceline.com (PCLN). He then goes on to breakdown what helped them generate gains with some of their longs:
- Amazon (AMZN) has extended to general merchandise and now has a truly global footprint.
- Google (GOOG) has a strong position in advertising given that advertising markets are recovering.
- Priceline's (PCLN) Bookings site continued to gain European market share.
- Apple (AAPL): Continued iPhone and Mac demand.
- Walter Energy (WLT), BHP Billiton (BHP), Freeport McMoran (FCX): Strong supply/demand equation for iron ore, metallurgical coal and copper.
- Crown Castle and SBA Communications (SBAC): Greater data usage from smartphones. We've previously noted that many hedge funds are bullish on tower stocks.
- Inditex (IXD) and Urban Outfitters (URBN): Improving sales.
- Express Scripts (ESRX) and Medco (MHS): Greater usage of generics and mail-order delivery.
- Cognizant Technology Solutions (CTSH): "Demonstrated the strength of its competitive position of combining strong industry expertise in developed markets with low-cost delivery in India by growing materially faster than its IT sourcing peers."
- Itau Unibanco (ITUB) is the leading bank in Brazil after solid merger integration.
- Brazilian Homebuilders PDG Realty and MRV Engenharia: Strong demand and government subsidies.
Prior to founding Conatus, Stemerman worked at Stephen Mandel's Lone Pine Capital so we know the emphasis will always be on solid stockpicking and that's why we track them. All of their top 25 winners in the portfolio were longs, while seven of their ten biggest losers were longs.
Short Positions
While three of their shorts hurt performance considerably in the fourth quarter, they are still short them as they believe the investment theses are still in tact. They have sized their positions conservatively and note that opportunities are limited and often crowded trades. Stemerman highlights that they found success shorting cash exchanges. He notes, "While the market generally appreciates that electronic competition is a threat, it has underestimated the pace at which the business is declining."
Additionally, Conatus is short "a for-profit education company with questionable business practices that has been put at risk from greater regulatory scrutiny, specialty retailers hurt by improving competition, and a traditional video game publisher displaced by on-line offerings." Insert your best guesses here as to which businesses they are referring to. That last one sounds like it could possibly be Electronic Arts (ERTS) while the education play could refer to Apollo Group (APOL) or Career Education (CECO), but that's pure speculation on our part. Their sourcing of short ideas often comes from companies that are being displaced by new technology and businesses facing competition from low-cost competitors. Head here to see what some other hedge funds are shorting.
Portfolio Exposures
Stemerman's hedge fund exposure levels were as follows: net exposure around 50% and gross exposure ranging from 110-130% with the latter below their normal range of 150-200%. Stemerman outlines the rationale for their reduced exposures below:
"In our third quarter letter, we identified five factors that could lead us to move away from our strong net long bias. Two of the five have come to pass - 1) convergence of market expectations for the U.S. and global economy with our more positive view, and 2) heightened risk of an increase in interest rates - leading us to bring down both our net and our gross exposure."
So, they are certainly a bit more cautious going forward given macro factors at hand. Conatus began 2010 with $2.85 billion under management. We had previously detailed Conatus' portfolio as per third quarter disclosures and we will be updating their holdings (along with many other prominent managers) in our hedge fund portfolio tracking series. For more insight from long/short equity hedge fund managers, head to our coverage of a recent hedge fund panel on the case for global equities in 2010.
Carl Icahn Sells Tons Of Yahoo Shares: 13F Filing Analysis
(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)
Next up is Carl Icahn and his hedge fund Icahn Partners. Icahn has been labeled a corporate raider and a rabblerouser for instituting change at various companies through his activist investing style. We've covered his movements on the site in the past and back in October he laid out the idea to short real estate. In the past, we've also detailed his additional insight from his guest lecture at Yale. Keep in mind that since the date of this 13F filing, Icahn has added to his Take Two Interactive (TTWO) stake numerous times.
The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. Note that we are only covering the major portfolio maneuvers. All holdings are common stock unless otherwise denoted.
Brand New Positions
CIT Group (CIT)
Lions Gate (Note 3.625%)
Increased Positions
Take Two Interactive (TTWO): Increased by 233.8% ~ And remember he has since added even more to his position
Genzyme (GENZ): Increased by 230.7%
Forest Labs (FRX): Increased by 21.3%
Reduced Positions
Yahoo (YHOO): Reduced by 76.1%
Removed Positions (Sold out completely):
n/a
Top 15 Holdings by percentage of assets reported on 13F filing
- Motorola (MOT): 32.34%
- Biogen Idec (BIIB): 23.93%
- CIT Group (CIT): 9.32%
- Genzyme (GENZ): 8.18%
- Yahoo (YHOO): 6.99%
- Amylin (AMLN): 6.40%
- Lionsgate (LGF): 3.35%
- Take Two Interactive (TTWO): 2.34%
- Regeneron Pharmaceuticals (REGN): 2.11%
- Cyberonics (CYBX): 1.49%
- Forest Laboratories (FRX): 1.35%
- Enzon Pharmaceuticals (ENZN): 1.03%
- Exelixis (EXEL): 0.60%
- Blockbuster (BBI): 0.24%
- Wendys Arbys Group (WEN): 0.10%
While Icahn did not sell completely out of his Yahoo (YHOO) stake, he certainly sold off a huge chunk. It seems he was fighting somewhat of a losing battle here as he has dumped over 76% of his shares. The other big story in Icahn's portfolio is the addition of CIT Group (CIT), as it's now his third largest position. We see Seth Klarman's Baupost Group add CIT to their portfolio as well.
As you can see, he obviously runs a highly concentrated portfolio given his activist investing nature. Don't overlook the fact that Icahn also added heavily to his Genzyme (GENZ) stake and remember he is still adding to his TTWO position. The vast majority of Icahn's holdings remained unchanged on a quarter over quarter basis though.
Lastly, Icahn must be happy with the developments out of Motorola recently as they announced they will split the company into two business segments. After all, it is by far his largest holding on the 13F. Keep in mind also that Icahn has been involved in numerous distressed transactions involving casinos that obviously won't show up on these public SEC filings. That wraps up all the portfolio changes on Icahn's 13F filing.
Assets from the collective holdings reported to the SEC via 13F filing were $2.87 billion this quarter compared to $3.13 billion last quarter, so a slight down tick. Remember that these filings are not representative of the hedge fund's entire base of assets under management. Therefore, the figures above represent the percentage of their reported 13F assets, not their entire portfolio.
We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group and Mohnish Pabrai's Investment Funds so check back daily for our updates.
Argonaut Capital's David Gerstenhaber: Thoughts On The Economy
Last Thursday, hedge fund manager David Gerstenhaber of Argonaut Capital was on CNBC for an extended period of time and shared his thoughts on the economy. Gerstenhaber of course is a former Managing Director at Julian Roberton's legendary Tiger Management. And since (let's face it) many of us watch CNBC on mute, we wanted to highlight something that's definitely worth listening to.
Gerstenhaber thinks you need to be careful investing in this environment (2010) as the easy money has been made in 2009. He notes that he thinks we're at fair valuations and as such 2010 could be difficult for stocks.
In terms of investments, he thinks the yield curve will remain very steep for quite a while and he's got a play to capitalize on that. He says, "(we're) running a position in the yield curve on a basis where we earn the carry associated with the steepness of the difference between the spot and forward curve." We've seen this type of play from numerous hedge funds and in particular, Gerstenhaber's former employer Tiger Management. Tiger's grand maestro Julian Robertson had been betting on higher interest rates via constant maturity swaps (CMS).
One of Gerstenhaber's other main assertions was that it is unfair to compare the current great recession to previous deep recessions in the 1970's and 1980's. He highlights that de-industrialization in the United States has been occurring since World War II and after each recession, we lose more industrial jobs. As such, this recession is unlike the previous deep recessions we've experienced in recent decades.
Below you will find a series of 3 video interviews where he shares his thoughts (RSS & Email readers will need to come to the site to view it).
Video 1:
Video 2:
Video 3:
It's a rarity to get appearances from prominent hedge fund managers on television, but in the recent past we've seen Bill Ackman interviewed, as well as David Einhorn, and occasionally Jim Chanos too. We've also previously covered Gerstenhaber's appearance on another hedge fund panel that is worth checking out.
Monday, February 15, 2010
Chase Coleman's Hedge Fund Tiger Global: Portfolio Update
Chase Coleman's hedge fund Tiger Global has not yet filed their 13F filing as of the time of writing. However, what they have filed is a slew of amended 13G filings with the SEC due to activity on December 31st, 2009. This means we get a glimpse as to the updated sizes of some of their portfolio positions and we'll of course detail the rest of the changes when their 13F is released. We've covered Chase Coleman extensively on the site before and in January noted that Tiger started an Apollo Group (APOL) stake. Additionally, Tiger was mentioned in our recent post about how hedge funds have been bullish on tower stocks. Now, it's time to see what else they've been up to.
Firstly, Coleman's hedge fund firm is showing a 7.6% ownership stake in MercadoLibre (MELI) with 3,366,343 shares. Tiger has increased their stake by 125,000 shares (a 3.8% boost) over the past 4.5 months. This is because as of their last 13F filing (which detailed positions as of September 30th, 2009) Tiger previously owned 3,241,343 shares.
Secondly, we see that Tiger Global filed a 13G on ChinaEdu Corporation (CEDU) and shows a 0% ownership stake with 0 shares. This filing is a bit peculiar as they did not show ownership of shares in their last 13F filing either from back on September 30th, 2009. So, we're not really sure why this was filed.
Thirdly, they have disclosed a 2.0% ownership stake in Gushan Environmental Energy (GU) with 3,409,923 shares. This is an increase of 434,817 shares (a 14.6% boost in position size). Back on September 30th, 2009, they owned 2,975,106 shares.
Fourthly, Tiger Global is also showing a 6.4% ownership stake in TransDigm Group (TDG) with 3,157,329 shares. They've boosted their holdings in this position by 360,732 shares since September 30th, 2009 (a 12.9% increase).
Lastly, we round out this update with the fact that they have disclosed a 0% ownership stake in WNS Holdings Limited (WNS) with 0 shares. This is another one of those weird filings that doesn't make much sense to us since they did not hold a position in WNS in their last 13F disclosure either. If anyone has an idea as to what is going on, feel free to comment below. Regardless, we're just here to update you on what was filed.
In addition to those disclosures, we also recently got a glimpse into one of Tiger's short positions. In July of 2009, Tiger Global was short 0.9% of Banco Popular's shares (BPOP). Then, as of January 2010 (and right before Popular announced their earnings), we learned that Tiger had reduced their short position to only 0.22% of shares. Back when we detailed a previous Tiger investor letter, we made note that their short positions were causing them some pain, as was the case in the vast majority of hedge fund land.
Chase Coleman is a 'Tiger Cub' because he previously plied his trade under mentor Julian Robertson at Tiger Management. Coleman is also considered a 'Tiger Seed' because he is one of the few managers that Robertson actually seeded himself in an effort to recognize talented up and coming managers. Coleman's hedge fund is one of the many included in the Tiger Cub Portfolio created with Alphaclone where you can piggyback the investment portfolios of some of the top investors out there.
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