Billionaires Portfolio: If your managing more than $100 million dollars, you are required to report to your holdings to the SEC within 45 days of the end of the quarter. And tonight, we began to see those disclosures hit, for a peek into the activities of the world’s best billionaire hedge fund managers.
Now, 13-F filings provide a ton of information, but you have to know exactly what to look for to make these filings useful.
With that being said here is what caught my eye tonight from the quarterly holdings of the world’s best billionaire hedge fund managers.
Apple Inc. (NASDAQ:AAPL)
Every top hedge fund seemed to either buy or increase their position in Apple Inc. (NASDAQ:AAPL), including billionaire Leon Cooperman. Cooperman initiated a brand new position in the stock, buying more than one million shares in Apple last quarter (before it split). We said almost two months ago that Apple’s 7-for-1 stock split in June would be a positive catalyst to push the stock higher. In an instant, it would make the most widely held stock in the world affordable again for the retail investor. Apple is up almost 25% over since announcing the split, and is currently trading near a significant psychological round number of $100.
Expect a big fuss to be made about this activity in Apple shown in these filings, but this one looks old and tired. Apple was a good buy after it’s June stock split and was an even better buy when I called the bottom in the stock more than a year ago. And that was well before Carl Icahn or any major hedge fund owned the stock. Bottom line, I would not buy Apple here and would actually sell it when it hits $100.
Facebook Inc (NASDAQ:FB)
The world’s best performing hedge fund manager David Tepper added to his position in Facebook Inc (NASDAQ:FB), but again Facebook had a nice run last quarter and is now up more than 40%. So piggybacking Tepper on Facebbook (which usually is a can’t miss trade) today is again a stale trade. I don’t like it.
Zynga Inc (NASDAQ:ZNGA)
Now here is a trade that could be compelling. Patrick McCormack, a Tiger Cub and head of Tiger Consumer Management, initiated a new position in Zynga Inc (NASDAQ:ZNGA) last quarter at prices much higher than what Zynga is selling for today. By my estimates Tiger Consumer purchased its new 18 million share stake in Zynga at $4, or 28% above its current price.
After selling off after a bad earnings report, the stock looks like it has found support and a double bottom at the $2.85 area. So Zynga could be a good trade to piggyback from Tiger Consumer.
Warren Buffett and Verizon Communications Inc (NYSE:VZ)
Buffett sold his entire position in Starz ($STRZA) and Conoco Phillips ($COP), and initiated a new $365 million dollar position in Charter Comunications (CHTR).
Plus, as we predicted in February in our Forbes piece, he increased his position in Verizon. He now owns more than $700 million dollars worth of Verizon Communications Inc Stock (NYSE:VZ) after adding an additional 4 million shares.
The fact that Buffett increased an already huge stake in Verizon, and the stock has been flat over the past 4 months, makes VZ a very compelling trade to piggyback.
Billionaire Hedge Fund Manager John Paulson, Gold and Biotech
John Paulson initiated and added to positions that were heavily weighted in the biotech and healthcare sectors. Paulson initiated new positions in Allergan ($AGN) and Questcor Pharmaceuticals ($QCOR). And he added to his stake in Vanda Pharmaceuticals (a stock we owned almost 2-years ago in our Billionaires Portfolio service at $4.50).
As for his gold position, no change. But he doubled his position in Dollar General($DG), and this could be the trade to piggyback. The stock has traded flat over the past four months, it’s rumored to be a merger or takeover candidate, and we have a big influential investor that has upped his stake, dramatically. That’s a good formula for success.
Tiger Global, Viking Global and Netflix, Inc. (NASDAQ:NFLX)
Tiger Global initiated a nearly $200 million dollar position in Netflix, Inc. (NASDAQ:NFLX), a savvy move given Netflix is up almost 40% over the last four months. Billionaire Andreas Halvorsen of Viking Global also initiated a new position in Netflix, buying almost $600 million dollar worth of the stock last quarter.
Billionaire Dan Loeb of Third Point
Billionaire Dan Loeb of Third point purchased new positions in Rackspace ($RAX), IAC/Interactive Corp ($IACI), and in Ally Financial ($ALLY). Third Point owns almost 10% of Ally, which recently started trading in April as a spin off. Of all these new positions to piggyback I like Rackspace ($RAX) the best. Rackspace is down almost 20% year-to-date and has been rumored to be a takeover candidate.
Bill Ackman and Pershing Square
Ackman trimmed most of his real estate holdings, including Home Properties ($HME) and Apartment Investment and Mamangement ($AIV), perhaps signaling that he believes REIT’s and real estate stocks have topped out. Ackman also increased his already large stake in Allergan ($AGN), showing that many of the top billionaire hedge fund managers are still very bullish on healthcare-biotech stocks, as well as M&A. John Paulson also took a large position in Allergan ($AGN), a healthcare stock that is in the process of being acquired.
Billionaire Seth Klarman of Baupost Group
Seth Klarman is probably one of the worst hedge fund managers to piggyback. He prefers to hold a significant amount of cash and prefers illiquid, private investments to pubic ones. Klarman did purchase a new stake in EBAY ($EBAY) and Theravanace Biopharma ($TBPH) a stock that recently went public and is up more than 30% over the past three months. Klarman sold his entire stake in BP Plc ($BP).
David Einhorn and Greenlight Capital
David Einhorn doubled his stake in Sunedison ($SUNE) and now owns more than $500 million dollars worth of this stock that we first recommended at $2.50. It sells for more than $20 today.
To sum up
Here are the takeaways from the Q2 filings of the world’s best billionaire hedge funds: First, the best hedge fund managers are still bullish on technology, healthcare and biotech stocks, but are turning bearish on energy stocks.
The top billionaire hedge funds took advantage of the mini crash in technology stocks during the second quarter to add to or initiate positions in some of the best names in technology… Apple, Facebook and Netflix. This bet paid off huge for many of these managers as all three of these stocks greatly outperformed the S&P 500 over the past few months.
Lastly, many of these investors own the same stocks. The most popular being: Family Dollar ($FDO), Dollar General ($DG), $EBAY and Apple ($AAPL).
Please don’t miss the opportunity to learn more about me and how we follow Billionaire Investors into stocks by visiting the Billionaires Portfolio.
Written By William Meade From The Billionaires Portfolio
The insider behind the Billionaire’s Portfolio is William Meade. William started his career with Wood Asset Management. Wood Asset Management was a $1.5 billion dollar institutional asset management firm and hedge fund, founded by Gary Wood, a former Goldman Sachs Partner and Harvard MBA. At Wood, William helped manage equity and fixed income portfolios for major university endowments, Fortune 500 pension funds and super high net worth clients (including 2 billionaire families).
Next, William was Director of ETF and Mutual Fund Research for Zacks Investment Research in Chicago. At Zacks, he worked with the founder Len Zacks, a PHD from MIT, in developing and maintaining a proprietary model that ranked over 20,000 ETFs and mutual funds. This model was viewed and used by over 150,000 people monthly, and was published in US News and World Report, and featured on CNN, Yahoo Finance, and Fortune.com.
William received a Masters in Economics from Johns Hopkins University, including PhD level coursework in International Economics. At Johns Hopkins, Mr. Meade was taught by Economists from The Federal Reserve and Department of Treasury. While at Johns Hopkins Mr.Meade consulted for a top hedge fund in Washington DC.
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