market folly

John Lykouretzos' hedge fund Hoplite Capital is out with its Q3 letter.  In it, we see that they added to positions in Sea World Entertainment (SEAS), Monster Beverage (MNST), and H&R Block (HRB) during Q3 as shares sold off but their theses remain unchanged. 

HRB is their largest position and Lykouretzos writes,

"While HRB has recently announced that it will no longer be selling its bank to Republic Bancorp, we are confident they will either sell the bank or shut it down and pursue a more shareholder-friendly capital structure."

The hedge fund also exited their stake in Intuitive Surgical (ISRG) during the quarter as their thesis was incorrect.

This year, ISRG shares tumbled from $500 down to $420 after the second quarter and then continued to cascade to current levels of $369.  Numerous other prominent hedge funds like Viking Global were long shares of ISRG at the end of the Q2 so we'll have to wait and see if others sold in Q3 when the next batch of 13F filings come out.

Some of Hoplite's shorts include a semiconductor manufacturer and a wireless telecom operator in an emerging market.  They've recently added to shorts in companies that supply equipment to mining companies or that have exposure to mining in general and these are some of their top shorts.

Their Q3 letter also mentions that they were short a "handset manufacturer" that spiked when part of the company was acquired, and we assume that this position was Nokia (NOK).  As we detailed this week, Dan Loeb's Third Point bought NOK recently.

At the end of Q3, Hoplite had gross exposure of 150.7% and was 54.9% net long.


For more of the latest hedge fund letters, head to:

- Greenlight Capital's Q3 letter

- Third Point's Q3 letter

- Cobalt Capital's Q3 letter

- Corsair Capital's Q3 letter