HIGHLIGHTS-Top U.S. hedge funds divided over GM in first quarter

Thu May 15, 2014 6:10pm EDT

(Adds Appaloosa Management, Paulson Management and Carl Icahn filings)

By Sam Forgione

May 15 (Reuters) - Top U.S. hedge fund managers circled General Motors after the automaker's shares fell 15.8 percent during the first quarter, with David Tepper's Appaloosa Management and John Paulson's Paulson Management LP increasing stakes.

Paulson Management increased its exposure in GM by 114.9 percent to 4.0 million shares and Appaloosa boosted its GM share figure by 58.7 percent to 7.9 million shares, regulatory filings showed on Thursday.

Not every big investor remained positive on GM. Barry Rosenstein's Jana Partners sold nearly all of its GM stake, cutting its holding by about 8 million shares to just 7,100 shares. And Warren Buffett's Berkshire Hathaway Inc decreased its share stake in GM by 25 percent to 30 million shares, while Leon Cooperman's Omega Advisors sold its entire stake of 1.05 million shares.

The consumer sector was also active in the first quarter, with investments that included discount retailer Dollar General Corp and drug store operator Walgreen Co.

Omega opened a new stake of 1.7 million shares in Dollar General, while Jana increased its stake in Walgreen by 4.8 million shares to 12.1 million shares.

The quarterly disclosures of manager stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are 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 offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side. The filings do not disclose short positions, bets that a stock will fall in price. As a result, the public filings do not always present a complete picture of a manager's stock holdings.

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

HERBALIFE

Billionaire activist Carl Icahn increased its stake in Herbalife Ltd by 0.2 percent to 17.0 million, as of March 31. Icahn's investment fund, which he uses to bet on stocks with his own money and money belonging to his publicly traded Icahn Enterprises, fell by 0.4 percent in the first three months of the year, according to an investment presentation released by Icahn Enterprises.

Icahn's down quarter meant he trailed the market by a slim margin, with the Standard & Poor's 500 Index returning 1.81 percent in the first quarter. His first-quarter performance was hit by the drop in the shares of Herbalife, which plunged by 27 percent in the first three months of the year. Icahn is the biggest shareholder in Herbalife, which hedge fund billionaire Bill Ackman calls a pyramid scheme and has shorted in a big way.

COCA-COLA ENTERPRISES

Tiger Global Management LLC, led by Chase Coleman and Feroz Dewan, slashed its stake in soft drink producer and distributor Coca-Cola Enterprises Inc by 14.5 percent to 6.7 million shares.

JPMORGAN CHASE & CO

Omega Advisors increased its stake in JPMorgan Chase & Co by 1.6 million shares to 1.7 million shares in the first quarter. The bank's shares rose 3.8 percent in the quarter, compared with a 2.2 percent gain in the S&P financial index , which includes all financial shares in the benchmark S&P 500 stock index.

GROUPON INC

Jana Partners increased its stake in Groupon Inc's class A shares by 9.8 million shares to 40.8 million class A shares. Chase Coleman and Feroz Dewan's Tiger Global Management got rid of its entire stake in the operator of a "deal-of-the-day" website. (Compiled by Jennifer Ablan; Editing by Steve Orlofsky and Lisa Shumaker)