By Svea Herbst-Bayliss and Katya Wachtel
Feb 14 Hedge fund heavyweights from Leon
Cooperman's Omega Advisors to Barry Rosenstein's Jana Partners
threw in the towel on Apple Inc in the fourth quarter,
while other managers found discount retailers Dollar General
Corp and Dollar Tree Inc attractive, regulatory
filings showed on Thursday.
Apple has been the topic du jour since last week, when
prominent hedge fund manager David Einhorn sued the company to
get it to deploy its $137 billion cash pile more effectively and
halt a 35 percent drop in its share price from a record high in
Cooperman, whose hedge fund had $7 billion in assets as of
last November, sold his entire stake of 266,404 Apple shares;
Rosenstein sold all of the 143,000 shares he held.
However, Einhorn's Greenlight Capital, holder of roughly 1.3
million Apple shares, found some company: David Tepper's
Appaloosa Management increased its Apple stake to 912,661 shares
and billionaire George Soros added about 100,000 Apple shares
during the fourth quarter.
Herbalife, which has been under scrutiny after hedge
fund manager Bill Ackman called the nutritional supplements
company an unsustainable pyramid scheme, drew the attention of
the market late Thursday. Billionaire investor Carl Icahn said
he now owns 14 million shares in the company, taking his
ownership to nearly 13 percent of Herbalife. The news sent
shares up 17 percent in after-hours trading.
Consumer- and retail-related stocks appear to have been the
flavor of the fourth quarter.
Patrick McCormack's $2 billion Tiger Consumer Management
LLC took a new, 2.15 million-share stake in discount retailer
Dollar Tree, while Farallon Capital Management LLC bought 4.3
million shares of Dollar General.
Maverick Capital Management also increased its position in
Family Dollar Stores, to 4.2 million shares from 2.8
million shares, during the fourth quarter. Family Dollar shares
were losers in January, down 11.4 percent.
The quarterly disclosures of hedge fund stock holdings - in
so-called 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.
The filings also offer insight into how managers positioned
themselves at year end to benefit from the big run-up in stock
prices in early 2013.
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.
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.
CONSUMER AND RETAIL
Farallon, founded by recently retired billionaire Thomas
Steyer, took a new stake in retailer Sally Beauty Holdings
of 4.7 million shares, and Jana initiated a new
position in retailer Fifth & Pacific Companies (formerly
Liz Claiborne Inc) of 3.3 million shares.
Tiger Consumer Management cut its stake in luxury retailer
Michael Kors Holdings Ltd by 394,269 shares to 1.6
Eton Park Capital Management, a $12 billion hedge fund run
by former Goldman Sachs trader Eric Mindich, initiated a new
position in Best Buy Co of 1.6 million shares during the
fourth quarter. Best Buy was one of the best performing stocks
in January, up over 37 percent.
Tiger Global Management, a roughly $6 billion fund run by
Chase Coleman and Feroz Dewann, loaded up on Amazon Inc
. Tiger Global now owns 1.23 million shares, up from
Tiger Global trimmed its stake in Apple, to 1.05 million
shares from 1.3 million, and sold all of its 698,000 shares of
Google Inc and its 11.7 million-share stake in
Facebook Inc. Tiger slashed its Yahoo Inc
position to 14 million shares from 25 million.
JAT Capital, founded and run by John A. Thaler, slashed its
stake in Facebook to about 530,000 shares, significantly down
from 6.1 million. But JAT opened a new stake in Yahoo of 2.8
million shares. It also re-entered LinkedIn with about
340,000 shares, after dissolving a stake some time in the third
Tiger Global has been a darling of the investment community
for delivering a string of strong returns at a time many hedge
funds were up only low single digits. Industry legend Julian
Robertson gave the fund its start.
Tiger Global also opened a new 1 million-share stake in
First Solar, which was one of January's biggest losers,
down 8.75 percent.
But JAT Capital slashed its stake in First Solar during the
fourth quarter to about 790,000 shares, from about 1.6 million
Activist investor Daniel Loeb's Third Point LLC accumulated
a $148.2 million stake in Morgan Stanley, buying 7.8
million shares of the securities company. The disclosure is the
first public acknowledgement of the size of the hedge fund's
position, which was mentioned in an investor letter last month.
Greenlight's Einhorn unloaded his entire 658,700 stake in
Genworth Financial Inc during the fourth quarter. John
Paulson's Paulson & Co and credit-focused trader Boaz Weinstein
of Saba Capital Management may have had better timing.
Paulson took a 3.9 million-share position and Saba added
roughly 2.3 million shares in Genworth during the fourth
quarter. The stock was one of January's best performers with a
gain of 22 percent.
Eton Park sold its entire 148,000-share stake in U.S. lender
CIT Group Inc and Bruce Berkowitz's Fairholme Funds cut
a its exposure to 3.2 million shares from 11.1 million shares.
CIT held preliminary talks over the past year and a half to
sell itself to banks, including Toronto-Dominion Bank and
Wells Fargo & Co, but nothing came of the conversations,
according to three people familiar with the specialty finance