Published February 14, 2013
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 September.
Cooperman, whose hedge fund had $7 billion in assets as of last November, sold his entire stake of 266,404 shares in Apple, as did Rosenstein, who held more than 143,000 shares.
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.
The quarterly disclosures of manager 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 Capital Management LLC, the hedge fund founded by 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 million.
Tiger Global Management also trimmed Apple, to 1.05 million shares from 1.3 million, and sold all of its 698,000 shares of Google and its 11.7 million-share stake in Facebook. Tiger slashed its Yahoo position to 14 million shares from 25 million.
The hedge fund, run by Chase Coleman and Feroz Dewan, invests roughly $6 billion and 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, as it was down 8.75 percent.
Eton Park Capital Management, a $12 billion hedge fund run by former Goldman Sachs trader Eric Mindich, sold its entire 148,000 stake in U.S. lender CIT Group. 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 company.
(Reporting Svea Herbst-Bayliss and Katya Wachtel; Additional reporting by Sam Forgione; Compiled by Jennifer Ablan and Matthew Goldstein; Editing by Steve Orlofsky)