The stocks the biggest hedge funds bought and sold during the second quarter have been revealed.
Hedge funds of a certain size are required to disclose their long stock holdings in filings known as 13-Fs. Of course, the filings only provide a partial picture since they do not show short positions or wagers on commodities and currencies. What’s more is these filings come out 45 days after the end of each quarter, so it’s possible they could have traded in and out of the position. Still, it does provide a partial look into where some of the top money managers have been placing money in the stock market.
IPO flops
We learned who got into some of the recent initial public offerings, most notably Snap and Blue Apron (APRN). Shares of both companies have collapsed since their trading debuts.
During the second quarter, “tiger cub” Philippe Laffont’s technology-focused Coatue Management added 940,900 more shares to its stake in Snap Inc. (SNAP). Coatue last held 21.89 million shares, making it the fund’s 12th largest long stock position. At the end of the second quarter, that position was valued at around $389 million. Assuming it hasn’t changed in size, it was last valued at around $263 million.
Meanwhile, Daniel Loeb’s Third Point LLC ditched all of its 2.25 million shares of the messaging app company during the second quarter.
Barry Rosenstein’s JANA Partners, the activist hedge fund that targeted Whole Foods and pushed for it to sell itself, bought 600,000 shares of Blue Apron, which saw its IPO disrupted by the Amazon-Whole Foods deal. It’s a small position in the overall context of JANA’s portfolio.
Alibaba gains favor again
Some big name fund managers piled into Chinese e-commerce giant Alibaba (BABA).
David Tepper’s Appaloosa Management initiated a new position with 3.69 million shares in the quarter, while Stanley Druckenmiller’s family-office Duquesne snapped up a new stake of 710,200 shares. Julian Robertson’s Tiger Management also bought 214,000 shares, while Laffont’s Coatue Management boosted its existing stake in the quarter.
Loeb’s Third Point got back in Alibaba again, initiating a stake of 4.5 million shares, a position valued at more than $634 million at the end of the quarter.
In a recent investor letter, Loeb described Alibaba as “among the best business models in the internet sector.” He noted the company “is currently at a positive inflection point” due to “significant changes in its advertising platform.”
Moves in financials
There were some moves in the financials sector. “Tiger cub” fund manager Andreas Halvorsen’s Viking Global disclosed a position of 12.29 million shares in Wells Fargo (WFC), a position valued at $681.3 million at the end of the quarter.
Another standout was Synchrony Financial (SYF), with Warren Buffett’s Berkshire Hathaway disclosing a new position of 17.46 million shares. Meanwhile, value investor Seth Klarman’s Baupost Group boosted its stake in Synchrony.
Laffont’s Coatue trimmed its stake in Bank of America (BAC), while Druckenmiller exited his entire position.
Waiting for volatility
Last week, DoubleLine Capital’s Jeff Gundlach told CNBC that he had bought put options on the S&P 500, saying it’s “like free money.”
A number of well-known money managers had a similar bet during the quarter.
Paul Tudor Jones’ hedge fund owned puts on 2.25 million shares of the SPDR S&P 500 ETF (SPY). During the quarter, Tudor increased its bet, buying puts on 774,400 shares.
Steven A. Cohen’s family-office Point72 also increased its bet, buying put options on 650,300 more shares in the quarter, so the fund last held puts on 2.78 million shares.
Activist investor Barry Rosenstein’s JANA Partners’ largest position in the second quarter was put options on 2.32 million shares, while SAC Capital alum Jason Karp’s Tourbillon Capital’s biggest position was puts on 2.5 million shares of the ETF.
This move could be a bet on stock prices falling. Puts gain value when the price of an asset falls and when volatility spikes. Buying these SPY puts gives the fund the right, but not the obligation, to sell shares at a set price. If the underlying asset that it tracks falls, the funds should profit as they would effectively be able to buy at a low price and then sell at the put’s price.
Perhaps, more importantly, it’s a bet on volatility rising. While volatility has remained low, it’s also meant that the premiums for these put options has tumbled. If volatility spikes, the funds can sell these options on the market for a potentially large profit.
Here’s a rundown of some of the highlights from Q2:
Appaloosa Management (David Tepper)
New: Alibaba (BABA)
Baupost Group (Seth Klarman)
Boosted: Synchrony Financial (SYF)
Trimmed: Cheniere Energy (LNG)
Coatue Management (Philippe Laffont)
New: Salesforce (CRM), Shopify (SHOP),
Boosted: Snap (SNAP), Alibaba (BABA)
Trimmed: Bank of America (BAC)
Exited: JPMorgan (JPM)
Duquesne (Stanley Druckenmiller)
New: Alibaba (BABA)
Boosted: Facebook (FB)
Exited: Bank of America (BAC)
JANA Partners (Barry Rosenstein)
New: puts on SPDR S&P 500 ETF (SPY), Pandora (P), Blue Apron (APRN)
Trimmed: Dow Chemical (DOW)
Exited: Aetna (AET)
Omega Advisors (Leon Cooperman)
Boosted: Microsoft (MSFT)
Pershing Square (Bill Ackman)
New: Automatic Data Processing (ADP)
Boosted: Howard Hughes Corporation (HHC)
Trimmed: Restaurant Brands International (QSR), Mondelez (MDLZ), Air Products & Chemicals (APD)
Third Point LLC (Daniel Loeb)
New: BlackRock (BLK), Alibaba (BABA)
Boosted: Dow Chemical (DOW)
Exited: Snap Inc. (SNAP), Salesforce (CRM), JPMorgan (JPM)
Tiger Global (Chase Coleman and Scott Shleifer)
Boosted: Microsoft (MSFT), Apollo (APO)
Trimmed: Amazon (AMZN), Domino’s Pizza (DPZ)
Tiger Management (Julian Robertson)
New: Alibaba (BABA), Nike (NKE), Apollo (APO)
Boosted: Blackstone (BX)
Exited: Pandora (P), Autodesk (ADSK)
Tourbillon Capital (Jason Karp)
New: puts of the SPDR S&P 500 ETF (SPY)
Trimmed: Synchrony Financial (SYF)
Viking Global (Andreas Halvorsen)
New: Wells Fargo (WFC)
Boosted: Salesforce (CRM), Visa (V)
Trimmed: Netflix (NFLX), Facebook (FB), Dow Chemical (DOW)
Exited: Alphabet (GOOG)
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Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.
