NEW YORK (Reuters) - 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 (QCOM.O) 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 (NFLX.O) 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.
Managers including David Einhorn of Greenlight Capital and David Tepper of Appaloosa Management loaded up on shares of Apple Inc (AAPL.O). Shares of the tech darling have been on fire this year, rising to an all-time high of $509, a 26 percent increase since the start of the year.
But not every manager was as foresighted.
Philippe Laffont’s Coatue Management decreased its stake in Apple by 54,000 shares to a total of 1.28 million at the end of last year.
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.
Louis Bacon’s Moore Capital Management got rid of its 2.7 million shares of Pfizer Inc (PFE.N), which had been one of the hedge fund’s largest positions in the third quarter.
He wasn’t alone. George Soros’s Soros Fund Management cut shares of Pfizer to 22,837 from 666,700 shares in the third quarter. Mark Kingdon’s Kingdon Capital also reduced its Pfizer position, shedding some 200,000 shares in the period.
John Paulson’s Paulson & Co made some notable changes in financial stocks, which had caused him to stumble badly last year. He no longer listed Citigroup (C.N), in which he owned 25 million shares at the end of the third quarter. And he trimmed his stake in Capital One Financial Corp (COF.N), after adding shares during the third quarter. At the end of the fourth quarter he owned 13.3 million, down from 22.2 million.
Paulson, in the fourth quarter, also got rid of its remaining 64 million shares of Bank of America, a stock that had been one of the hedge fund’s most problematic last year.
Eric Mindich’s Eton Park accumulated 20 million shares of Bank of America (BAC.N) 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.
Conversely, Caxton Associates reduced its holdings of BofA shares from 9 million shares in the third quarter — its largest holding by market value — to 615,700 by the end of the fourth quarter.
Famed short-seller James Chanos’ Kynikos Associates opened a long position in JPMorgan Chase (JPM.N) 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.
Apple was the flavor of the fourth quarter. Soros, Einhorn and Tepper increased their exposure right ahead of Apple’s roughly $100 a share run-up this year.
Appaloosa raised its share stake in Apple by 377 percent to 181,850 shares; Greenlight bought 150,000 shares to end the quarter with 1.5 million shares, while Soros increased its exposure to 95,000 from 83,417.
Moore Capital and Dan Loeb’s Third Point dramatically upped their stake in Yahoo YHOO.O, with Moore’s exposure at 1.3 million shares by the end of December from 172,000 shares in the third quarter. Third Point increased its stake in Yahoo to 56 million in the fourth quarter from 48 million.
Marvell Technology Group (MRVL.O) attracted some fans as well. Greenlight Capital added more than 700,000 shares while Maverick increased its exposure from 15.1 million in the third quarter to 19.9 million by the end of December. Third Point entered in a new stake of 10 million shares in Marvell.
Jana upped its position in travel search company Expedia (EXPE.O) to 3 million shares from 980,000 in the third quarter.
Eton Park increased its stake in online auction firm Ebay (EBAY.O) by about 750,000 shares.
Coatue took on 50,000 shares of online coupon company Groupon (GRPN.O), which went public in November.
Chase Coleman’s Tiger Global Management acquired 325,000 shares of Michael Kors KORS.N, a high-end retailer that went public in December.
Pershing Square Capital Management’s William Ackman appeared to turn his back on the housing market when he no longer listed home improvement store Lowes Companies Inc. (LOW.N) on his quarterly filing. At the end of the third quarter he owned 21.2 million shares.
Coatue, one of the 10 biggest owners of Green Mountain Coffee Roasters GMCR.O, 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.
Reporting By Katya Wachtel, Svea Herbst Bayliss, Sam Forgione, and Aaron Pressman; Editing by Steve Orlofsky