Tags: hedge | tech

Hedge Fund Managers Looked to Tech in 4th Qtr

Tuesday, 14 Feb 2012 04:21 PM

 

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Last year was a dismal one for many U.S. hedge fund managers, but based on their year-end stock holdings, some managers were well positioned to take advantage of this year's strong start in the equity markets.

Thomas Steyer's Farallon Capital Management, for instance, added about 1 million shares of Qualcomm Inc., in the fourth quarter. Shares of the telecommunications equipment manufacturer are up 12 percent in 2012.

Barry Rosenstein's Jana Partners loaded up on 650,000 shares of Netflix in the fourth quarter, when the Internet TV and DVD delivery company's shares were taking a pounding. It was a shrewd move: The company's shares are up 77 percent this year.

But not every manager was as foresighted.

Philippe Laffont's Coatue Management decreased its stake in Apple Inc. by 54,000 shares to a total of 1.28 million at the end of last year. Shares of the tech darling have been on fire this year, rising to an all-time high of $506, an increase of about $100 a share.

The quarterly disclosures of manager stock holdings -- in so-called 13F filings with the U.S. Securities and Exchange Commission -- is always intriguing for investors trying to divine a pattern in what savvy traders are selling and buying.

But relying on the filings to develop an investment strategy comes with some peril because the disclosures are backward looking and come out 45 days after the end of each quarter.

Still, the filings can offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side. The filings don't disclose short positions -- bets that a stock will fall in price. And there's also little disclosure on bonds and other securities that don't trade on exchanges.

The SEC also permits managers to omit sensitive stock positions from 13F filings upon request. As a result the public filings don't always present a complete picture of a manager's stock holdings.

Here then are some of the hot stocks and sectors in which hedge fund managers either took new positions or exited from in the fourth quarter.

HEALTH CARE

Louis Bacon's Moore Capital Management got rid of its 2.7 million shares of Pfizer Inc, which had been one of the hedge fund's largest positions in the third quarter.

Mark Kingdon's Kingdon Capital also reduced its Pfizer position, shedding some 200,000 shares in the period.

 

FINANCIALS

Erich Mindich's Eton Park accumulated 20 million shares of Bank of America in the fourth quarter, putting his fund in line to benefit from the 48 percent surge in the Charlotte, North Carolina lender's stock this year. In the third quarter, Eton Park only had a call option on 2.5 million shares of BofA stock.

Joseph LaNasa's Serengeti Asset Management unloaded 200,000 shares of Goldman Sachs Group, leaving it with no reported position in the investment bank.

Famed short-seller James Chanos' Kynikos Associates opened a long position in JPMorgan Chase by accumulating 145,000 shares of the big bank.

Dinakar Singh's TPG-Axon Capital Management also took a new stake in JPMorgan, adding 2.6 million shares in the fourth quarter.

TECH

Moore Capital dramatically upped its stake in Yahoo to 1.3 million shares from 172,000 shares in the third quarter.

Jana upped its position in travel search company Expedia to 3 million shares from 980,000 in the third quarter.

Eton Park increased its stake in online auction firm Ebay by about 750,000 shares.

IPOs

Coatue took on 50,000 shares of online coupon company Groupon, which went public in November.

Chase Coleman's Tiger Global Management acquired 325,000 shares of Michael Kors, a high-end retailer that went public in December.

MOMENTUM STOCKS

Coatue, one of the 10 biggest owners of Green Mountain Coffee Roasters, cut its position in half in the quarter, leaving it with about 2 million shares. Shares of Green Mountain, which tumbled about 50 percent in the fourth quarter, have roared back 45 percent this year.

Meanwhile, Patrick McCormack's Tiger Consumer Management more than doubled its stake in Green Mountain in the fourth quarter to 1.29 million shares.

© 2014 Thomson/Reuters. All rights reserved.

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