Hedge Fund Masters

Will looking under the hedge fund hood reveal investment gems - or are you driving by looking in the rear view mirror?

The 13Fs are arriving and it is that time again - time to look under the hood and see what all the top hedge funds are up to. This post is particularly timely as my truck just blew a gasket and I am now carless.

(For background on this approach, check out the following links - Show Me Your Hand - Betting on the Smart Money & How to Really Trade Like Warren Buffett.

Also, a new study coming out by Gerald Martin of American University in Washington and John Puthenpurackal of UNLV further validates this approach. The paper on SSRN is "Imitation is the Sincerest Form of Flattery".)

Below is a table of updated performance figures for the two strategies we track, followed by individual fund holdings and commentary. In our previous backtests, we found that the strategies outperformed the stock indexes by 6-12% per year since 2000 with similar volatility. Is the outperformence a statistical artifact based on survivor bias, or will the strategies hold up out-of-sample?

As you can see, both strategies are outperforming the indexes by quite a wide margin.








Hedge Fund Consensus - Top holdings owned by 15 value hedge funds, ranked by # of funds with the same position. The biggest winners last quarter were Schwab (SCHW) and Google (GOOG) at 33% and 24%, respectively. The biggest losers were Crocs (CROX) and Comcast (CMCSK) at approximately -23%.

Hedge Fund Best Ideas - Top two holdings from each of 10 value hedge funds listed below. The biggest winners were Mastercard (MA) at 38% Apple (AAPL) at 32%. The biggest losers were Level 3 (LVLT) at -44% and SLM at -16%.

Consensus:

AMX (5)
ORCL (5)
WMT (4)
AXP (3)
BNI(3)
CVS(3)
EMC(3)
GOOG(3)
MCO(3)
MSFT(3)

At the end of the post is a list of double repeats.

Best Ideas:
(Since GOOG is the top holding at Lone Pine and Tiger, I am going to take the next holding at Lone Pine, QCOM. CA also replaces AT since it is going private.)

AAPL
AMP
AMT
AMX
CA
CVS
DISCA
EXH
GOOG
HLX
KO
LVLT
MCO
MGM
NWS
ODP
ORCL
PHG
QCOM
WFC


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Baupost Group

News Corp takes over the top spot, representing ~ 13% of Klarman's portfolio. Exterran Holdings, Inc. (EXH), a $5 billion market cap nat gas service company, is the second largest holding. Domtar (UFS), SLM, and Broadridge (BR) round out the top five. Klarman tripled his positions in News Corp and Domtar, while reducing his SLM holding by 70%.

Top sectors in the portfolio include:

Financials 30%
Services 27%
Basic Materials 11%
Energy 9%

Top 10 holdings are:

NWS
EXH
UFS
SLM
BR
FAF
MAQ
GLG
ELOS
OMN


Blue Ridge Capital

Griffin has a fairly similar portfolio as last quarter, with increased positions in the top five holdings. Every position in the portfolio is less than a 7% holding, but then again, it is hard to move around >$3B in just a few names. He nearly doubled his positions in Level 3 and Broadridge.

Top sectors in the portfolio include:

Services 40%
Financials 18%
Technology 18%
Basic Materials 8%

Top 10 holdings are:

DISCA
LVLT
CVA
SCHW
AXP
BIDU
BR
AMX
MLM
TMO

Warren Buffett

If it is hard to move around a couple billion, its is REALLY hard to move around over $60 billion. He seems to manage, however.

Top 10 holdings are:

KO
WFC
AXP
PG
BNI
JNJ
MCO
WSC
USB
BUD
COP
WPO



Eminence Capital

Top sectors in the portfolio include:

Services 33%
Technology 30%
Financials 12%
Conglomerates 11%

Top 10 holdings are:

PHG
ORCL
FISV
WU
AXO
UTX
ROST
MSFT
QCOM
MNST


Greenlight Capital

Not much turnover in the top positions. New positions include Target (TGT), Children's Retail (PLCE), and US Bioenergy (USBE).

Top sectors in the portfolio include:

Services 23%
Technology 18%
Capital Goods 18%
Energy 18%

Top 10 holdings are:

HLX
AMP
MSFT
SNG
BAGL
TGT
SAI
MDC
MIM
COV



Lone Pine Capital

Not much new here. Google is the top position at around 10% of AUM. New positions include Monsanto (MON) and Burlington Northern (BNI).

Top sectors in the portfolio include:

Services 34%
Technology 22%
Financials 9%
Basic Materials 8%

Top 10 holdings are:

GOOG
AMX
QCOM
SWN
EMC
MON
ICE
BAM
SLB
PCLN


Maverick Capital

Ainslie still likes Apple and CVS, and has built new positions in Macy's (M), Marvell Tech (MRVL), and Advanced Micro (AMD).

Top sectors in the portfolio include:

Technology 31%
Services 30%
Financials 14%
Healthcare 10%


Top 10 holdings are:

AAPL
CVS
QCOM
FSLR
M
TMO
MRVL
AMD
STI
RTN


Okumus Capital

Ahmet's top four positions represent roughly 60% of the portfolio, and he added to each of them. He bought 8 million more shares of Office Depot (ODP), and 5 million each of Moody's (MCO) and Bed Bath and Beyond (BBBY).

Top sectors in the portfolio include:

Services 73%
Financials 21%


Top 10 holdings are:

ODP
MCO
C
BBBY
WMT
MCO
LTD
UNH
CSG
PLCE




Private Capital

Sold off a bit of the top holdings, but not much.

Top sectors in the portfolio include:

Services 35%
Technology 32%
Financials 22%


Top 10 holdings are:

MGM
AT
CA
HPQ
BEAS
HET
NTRS
BSC
EK
SYMC



Tiger Global

The top five positions stay roughly the same with Mercadolibre (MELI) breaking into the top five with a doubling of the position. The pm, Chase Coleman, sold off about half the shares of Baidu (BIDU).

Top sectors in the portfolio include:

Services 56%
Technology 23%
Basic Materials 9%

Top 10 holdings are:

GOOG
AMT
AMX
BIDU
MELI
TDG
CMCSK
SBAC
EMC
FMCN

----

Two funds owning the same stock:

AAPL
AMT
AT
BBBY
BIDU
BR
BRK
COV
CROX
CSCO
CVC
DCEL
HET
HRZ
IGT
M
MDC
MNST
MON
NKE
ORCL
PLCE
SAI
TMO
TX
TXT
UTX
WU