By Svea Herbst-Bayliss and Katya Wachtel and Sam Forgione
Aug 14 (Reuters) - The flavor of the second quarter for big U.S. money managers was banks, including Citigroup Inc and Genworth Financial Inc, and healthcare stocks such as Aetna Inc, Cigna Corp and HCA Holdings Inc .
Hedge funds Eton Park Capital, Kynikos Associates LP and BlueMountain Capital Management were among investors that scooped up the shares of financials, which as a group are up 15 percent this year.
Energy companies were also in the spotlight. Warren Buffett’s Berkshire Hathaway initiated a new position in oil refiner Phillips 66, accumulating 28.4 million shares, potentially enough to make Berkshire the largest shareholder in the ConocoPhillips spin-off.
Activist hedge fund Jana Partners LLC soured on energy stocks as the firm dumped shares of Marathon Petroleum Corp and Hess Corp, while Eton Park’s Eric Mindich revealed he has an option to buy 4.5 million shares of natural gas producer Chesapeake Energy Corp at an undisclosed price.
Daniel Loeb’s Third Point hedge fund also revealed it owned a note that could convert into Chesapeake’s shares, but the amount remained unclear. Reuters had reported that the $8.7 billion hedge fund, which listed Chesapeake as one of its largest positions in the second quarter, had established a bullish position in the company’s bonds.
It is that time of the year again when hedge funds and other big money managers disclose their U.S. stock holdings at the end of the most recent quarter in so-called 13-F filings.
The filings offer a chance for ordinary investors to see what closely watched money managers such as Bill Ackman, Warren Buffett and David Einhorn are doing with their investors’ money.
The second quarter was difficult for stocks and hedge funds. The benchmark S&P 500 fell 3.3 percent in the period, while funds on average lost 2.7 percent in the quarter.
The filings from hedge funds, submitted to the Securities and Exchange Commission throughout the day on Tuesday, will no doubt reveal some of that tumult in the stock market.
For more on how big money managers traded in the sector quarter, here is a breakdown by sectors and high-profile stocks:
Eton Park’s Mindich said he owned 5.1 million shares of Morgan Stanley and had the right to acquire another 21.5 million shares at an undisclosed price. At the end of the first quarter, he owned 15 million shares.
Mindich also made changes in his Citigroup holding in which he owned 5.5 million shares at the end of the first quarter and said he had the right to acquire 12.7 million shares at an undisclosed price at the end of second quarter. At the end of the second quarter, he still held warrants to acquire 102.4 million shares, the same number he held at the end of the first quarter.
BlueMountain Capital initiated a new position in Citi, roughly 623,000 shares, and increased its stake in Flagstar Bancorp by 250,000 shares. It owned 233,505 shares of JPMorgan Chase & Co at the end of the second quarter, up from 80,910 shares.
Noted short seller Jim Chanos, founder of Kynikos Associates Ltd, also added 231,800 shares of JPMorgan, bringing his stake to 323,400 shares, while adding 279,000 shares of Citigroup.
And Buffett’s Berkshire Hathaway added yet again to its sizeable position in Wells Fargo & Co, a 4 percent boost to some 411 million shares in Buffett’s favorite bank.
Seth Klarman, founder and president of the Baupost Group, and David Einhorn, founder of Greenlight Capital, initiated new positions in insurer Genworth Financial. Baupost took a 15 million share stake, while Greenlight took a 658,700 share stake.
Not everyone was a fan of banks, however.
Dinakar Singh’s TPG-Axon Capital Management sold its holdings in JPMorgan, which reported an unexpected and enormous trading loss this year from the infamous “London Whale” trading. Singh no longer listed JPMorgan as a holding after owning 3.1 million shares during the first quarter.
Other popular sectors that attracted hedge funds included:
Blue Mountain Capital appeared to be betting on a revival of the housing market and opened a new position in the quarter in KB Home, buying 876,165 shares of the home builder. Meanwhile, Jana bought 6.2 million shares of American Realty Capital Trust Inc, a real estate investment trust.
Berkshire disclosed it accumulated 28.4 million shares of Phillips 66, the ConocoPhillips spin-off. Berkshire also added just over 973,000 shares of oilfield equipment maker National Oilwell Varco Inc.
Jana, led by Barry Rosenstein, exited its position in Marathon Petroleum, which had been the fund’s largest stock holding at the end of the first quarter. The fund also sold all of it shares in Hess, another oil company.
Tom Steyer’s Farallon Capital made a big adjustment to its holding of gas pipeline company Kinder Morgan Inc. In the first quarter it held 22.5 million shares, but at the end of the second quarter it owned 4 million shares and had warrants to acquire an additional 5.2 million shares.
FOOD and AGRICULTURE
Jana opened a new position in Canadian fertilizer company Agrium Inc, buying 6.5 million shares.
Philippe Laffont’s Coatue Management was bullish on burritos and tacos in the second quarter, adding 185,000 shares of Mexican restaurant chain Chipotle, bringing its total holdings to 567,102 shares.
Klarman’s Baupost Group dramatically increased his Hewlett-Packard Co exposure to 26,850,601 shares from 17,250,000. His Microsoft Corp position was steady at 7 million shares, with a brand new position in Oracle Corp at 15.8 million shares.
David Einhorn’s Greenlight Capital moved into health insurers in a big way in the second quarter, potentially getting ahead of the U.S. Supreme Court ruling in June that upheld much of the Obama administration’s healthcare law. In the quarter, the closely watched manager opened new positions Aetna Inc, Cigna Corp and WellPoint Inc. For instance, Greenlight added over 6 million shares of Cigna in the period.
John Paulson’s Paulson & Co upped its stake in HCA Holdings by 397 percent to 8 million shares, while selling out of Teva Pharmaceuticals Industries Ltd, Tenet Healthcare Corp and Medco Health Solutions Inc.
George Soros’ family office, Soros Funds Management, opened a new position in Wal-Mart Stores Inc, buying 4,831,800 shares. Bill Ackman’s Pershing Square Capital Management also no longer lists Family Dollar Stores Inc, the pick he highlighted in 2011 at the Ira Sohn Investment conference.