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More Spying on Elite Funds - Part 2
A follow-up to my last comment on spying on elite funds. We begin with an article by Naked Value on Seeking Alpha, Paulson & Co.'s Biggest Buy, Biggest Sell and Top Holdings.
You'll notice that unlike Dodge and Cox, Paulson & Co sold all
their Pfizer shares, and initiated a new position in Hewlett-Packard
Company (HPQ).
Unlike Soros,
Paulson & Co is still betting big on gold, owning a significant
stake in SPDR Gold Trust (GLD) and expects a continued recovery, and as
such it thinks banks like Citigroup (C) will continue to benefit. The
fund also owns Anadarko Petroleum Corp (APC) and Transocean Limited
(RIG), which is the company Ontario Teachers' bet on and made a bundle on.
Are you confused? Don't be. You should be using the tools on the NASDAQ website
to slice and dice the portfolios of these elite funds. For example,
clicking on the % change in value header at the top of the fourth column
will show you Paulson & Co's new holdings (click on image to
enlarge):
Note
that apart from Hewlett-Packard mentioned above, Paulson & Co made a
significant new investment in Weyerhaeuser (WY), buying up 31,700,200
shares during Q1 2011. Share prices for both companies are well off
their highs, and if the fund did their homework, these could yield
excellent returns going forward.
When analyzing 13F quarterly filings, it's important to look at new holdings, not just top holdings.
For example, looking at new holdings for Dodge and Cox which I
neglected to do in my last comment, you'll notice that they bought a
significant stake in Motorola Mobility (MMI) and Microsoft (MSFT) during
Q1 2011 (click on image to enlarge):
Let's move on to Soros Fund Management. First, start from tickerspy's hedge funds and click on Soros Fund Management which will bring you to this page.
I noticed a significant new holding in Adecoagro (AGRO), a company
which engages in the agricultural and agro-industrial businesses in
South America. I went on the NASDAQ website, typed in AGRO at the top
and then went to detailed institutional holdings which you'll find on
the left-hand side of the blue box. From there, I found Soros Fund
Management and looked into their top holdings (click on image to
enlarge).
Apart from Adecoagro, which is their top holding reported in Q1 2011,
you'll notice a big increase in their holdings of Motorola Solutions (MSI) and Wells Fargo (WFC).
Which other company from the list above caught my attention?
Dendreon (DNDN) because another well known hedge fund which is in hot
water lately, SAC Capital Advisors, owns the most shares of this biotech
firm which offers active cellular immunotherapy and small molecule
product candidates to treat various cancers.
Which other elite funds own shares of this biotech firm? Montreal's Sectoral Asset Management, one of the top healthcare funds in the world, as well as Orbimed Advisors,
another leading healthcare fund. I also noticed Citadel Advisors who
along with SAC and Farallon Capital, is among the best multi-strategy
hedge funds. I like seeing this cross-activity among elite funds.
Have a look at the top holdings of SAC Capital Advisors for Q1 2011 (click on image to enlarge):
And here are the top holdings of Citadel Advisors for Q1 2011 (click on image to enlarge):
Pay
attention to common holdings among these funds and common sector
themes. For example, in semis, Soros is invested in RF Microdevices
(RFMD), SAC Capital in Micron Technology (MU) and Citadel Advisors in
Advanced Microdevices (AMD). In networking, Soros has a big stake in
Extreme Networks (EXTR), SAC Capital in Lucent-Alcatel (LU), and Citadel
in LSI Corporation (LSI) and Cisco Systems (CSCO). Also noticed
Citadel's stake in Toll Brothers (TOL), the largest homebuilder (betting
on a recovery in housing?).
There are other common themes like
software, healthcare, medical devices, financials, business services,
energy and one of my favorites, alternative energy. But lately
alternative energy has been getting pounded. Just check out this chart
of one of my holdings, LDK Solar:
Yuck! But I know the big hedgies are accumulating positions
in this and other solars which is why I tell investors to do the same:
use these insane selloffs in solar shares to accumulate or initiate
positions and hold on for the ride of your life! (IGNORE Jim Chanos' dire predictions on China and Chinese ADRs!!! Jim has become the claptrap for big hedgies looking to spook investors.
Made a great call on Enron, will eat his shorts on China and Chinese
solars.)
I'm running out
of gas so let me end by looking at the top holdings of another great
fund, Baupost Group, run by the legendary value investor, Seth Klarman.
If you want to see a concentrated portfolio, just look at the holdings
of this fund (click on image to enlarge):
One
of the stocks, PDL Biopharma (PDLI) caught my attention a couple of
months ago as I noticed another elite fund, Renaissance Technologies,
among the top institutional holders (click on image to enlarge):
There are many other elite funds that I've listed in the past
which are not discussed here. Increasingly, there are sector
specialists and other funds that specialize in niche strategies. The
point of the last two commentaries was to give you the tools to analyze
the holdings of these elite funds and allow you to invest more wisely by
leveraging off this information. The information is lagged, but when
elite funds are increasing their holdings of companies or initiating new
positions, it's typically because they see more upside ahead.
Please do not forget to donate via PayPal under
the banner at the top of my blog and if you want more detailed analysis,
just contact me at LKolivakis@gmail.com.
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This is a very interesting methodology.
But how does one react as quickly as these critters can when it is time to exit the bar on short notice?
THAT is THE question, isn't it?
Looking backward at the last quarter and projecting the future can get you seriously burned, and allowing this methodology to be much of an influence will almost asssure that you will exit positions too late...or so it seems to me. Trying to get out after you realize your favorite hedge fund dumped 32 gazillion shares on the market could be a bit dicey.
Supply comming into euro and stocks.
http://deadcatbouncing.blogspot.com/
IMPORTANT: IGNORE Jim Chanos' dire predictions on China and Chinese ADRs!!! Jim has become the claptrap for big hedgies looking to spook investors. Made a great call on Enron, will eat his shorts on China and Chinese solars.
Leo,
Thanks for the intelligence source; mostly the "how to" in data mining relative to equities. Sure, I contributed and proud of it! It wasn't large, however it was within the budget.
My next one will be to ZH, the Tyler(s) deserve(s) such. I have pocket silver not much, just a modicum legacy position.
Great Job!! This article will be utilized to provide more guidance in financial investing (my IRA) and I will leverage wisely off this information, of course due diligence is mandatory. Determining the why, in my mind, makes me more knowledgeable and settled.
Leo, you, RobotTrader, Spalding, Harry W, and several others provide both very timely macro and micro views. And certainly bolt on to the Mission, Values, and Ideology espoused by Tyler and many ZHers.
I like equities, and will never know anything about bonds or fx markets, they're way over my mindset.
Again, Great Article!!
Twice a Day
Thanks, don't want to know what you do twice a day (LOL!), but appreciate the kind words. People have to understand that blogs are free but it requires an insane amount of work and dedication to keep the commentaries coming. As such, we appreciate your financial support as a token of your appreciation.
Weterhauser, Smurfit and Rock-Tenn - Looks like Paulson is going long paper. :P
QE3 = mo paper
Dodge and Cox....
The track record is not outstanding....
It is firms like this that are stable.....take less risk than the market.....but at the end of the day.....are more about relationships and blue blood trust accounts....This is what it looks like to me.....
Paulson is an in the know ballsy tough player with the right contacts.....however how many more subprime shots are there.....it is a good possibility that he will just appear to be average for a while.....until there is another calamity type opportunity.....
So the bottom line is that seeing what some big positions of average players are..... is just a so so thing to do....
However uncovering another sub prime type prospect would be interesting.....
Not sure I agree with you on Dodge and Cox. My contacts tell me they are an excellent shop. As far as Paulson & Co., I do agree that he has many more years to reach the status of the other funds I mentioned and others I have not mentioned in this comment, but they are a big player in the hedge fund space. The hedge fund that really impresses me is Citadel. They got clobbered in 2008 but came back strong, just as I predicted. Citadel and a few others are alpha generating machines.
https://www.dodgeandcox.com/performance_HR.asp
What is stellar about this historical performance record .......