>>> Consensus New Buys
* T-Mobile (TMUS): During Q1, Glenview Capital, Paulson & Co, Third Point, and Lone Pine Capital all established stakes in this wireless service company. Now that the FCC spectrum auction and quiet period are over, the thought is that merger activity might pick up in the telecom sector. A new Republication administration and antitrust approach has companies and investors weighing if industry consolidation will be allowed. TMUS has a few options. They can either continue taking market share as they have as an independent company, they can try to merge with Sprint (S), or they could potentially be a takeover target for other companies looking to break into the industry (such as cable companies or tech firms).
* Humana (HUM): Omega Advisors, Pennant Capital, Bridger Management, and Lone Pine Capital all acquired shares of this health insurer during Q1. There’s been a lot of uncertainty in the sector given that many of these companies tried to merge, were sued by the Department of Justice to block the mergers, and now face Obamacare’s uncertain future and a potential Republican program replacement. There’s a lot of moving pieces here. That said, HUM shares have slowly churned higher thus far in 2017.
* Conduent (CDNT): This company was spun-off from Xerox (XRX) recently. While some funds received shares due to their XRX ownership (like Greenlight Capital and Icahn Capital), others bought in once the company started trading independently (such as Pennant Capital).
* Formula One (FWONK): During Q1, Liberty Media (former ticker LMCK) acquired automotive racing franchise Formula 1. As part of the transaction, they issued shares at $25 per share and many hedge funds took part in this offering, including Coatue Management, SPO Advisory, and Viking Global. After the transaction closed, the ticker symbol switched to FWONK to designate the new Formula 1 assets the company holds. Former media titan Chase Carey has been given the CEO role in an effort to expand the global brand further.
>>> Consensus Increased Positions
* Shire (SHPG): This stock lands on this list for the second consecutive quarter. This time around Omega Advisors, Bridger Capital, and Maverick Capital were out accumulating more shares. As mentioned last quarter, SHPG has been listed by a few sellside firms as a ‘best idea for 2017.’
* TransDigm Group (TDG): This stock would have been a consensus ‘new buy’ as well if you included all the hedge funds that bought that aren’t tracked in the newsletter. During Q1, funds such as Blue Ridge Capital, Pennant Capital, and Tiger Global added to their positions. A short seller issued a report that highlighted the company’s pricing practices and status as almost a monopoly in some of the end markets it sells to. The aerospace company is basically run like a private equity style roll-up that acquires other aerospace companies that sell replacement parts. TDG shares were quite volatile in the quarter and tons of hedge funds jumped on the opportunity.
* Time Warner (TWX): Hedge funds like Paulson & Co, Farallon Capital, and Third Point all added to their TWX stakes. Two of those funds are merger arbitrage focused firms and TWX certainly fits the bill as it is being acquired by AT&T (T), pending regulatory review. At first, there was some skepticism that this deal would go through given that Donald Trump talked negatively about the deal on the campaign trail. However, nowadays analyst sentiment seems to be that the deal is likely to pass given that it is a vertical integration rather than a horizontal one.
* Rice Energy (RICE): During the first quarter, hedge funds such as Third Point, Lone Pine, and Viking Global all added to their existing positions.
>>> Consensus Sold Positions
* Ambarella (AMBA): Blue Ridge Capital, Coatue Management, and Maverick Capital all liquidated their positions in this stock during the first quarter.
* Williams Companies (WMB): Funds that sold WMB stakes in Q1 include Lone Pine Capital and Omega Advisors.
* Southwestern Energy (SWN): This is another energy stock that hedge funds including Third Point and Blue Ridge Capital dumped during the first quarter.
* 21st Century Fox (FOXA): Shares of this media company were exited by the likes of Berkshire Hathaway and SPO Advisory.
>>> Consensus Decreased Positions
* Charter Communications (CHTR): Believe it or not, this is the fifth straight quarter CHTR positions have been trimmed by various managers. The company has been well on its way to integrating the acquisitions of Time Warner Cable and Bright House and it’s now the second largest cable player in the US. The stock is up 80% over the past year and the funds that have been selling are trimming their positions by 10-20% for the most part to lock-in some profits and for risk management purposes most likely, as position sizes have swelled due to the share gains. Funds that trimmed their stakes in Q1 include Bridger Capital, Glenview Capital, Farallon Capital, Hound Partners, Third Point, Blue Ridge Capital, Tiger Global, and SPO Advisory.
* Alphabet (GOOG): This is the second consecutive quarter this stock appears on this list. Hedge funds that reduced their exposure to Google’s parent company during the first quarter included Paulson & Co, Tiger Management, Tiger Global, Farallon Capital, Coatue Management, Appaloosa Management, and Viking Global.
* Fleetcor Technologies (FLT): Maverick Capital, Hound Partners, Pennant Capital, Farallon Capital, Tiger Global, and Lone Pine Capital all reduced their position sizes in FLT. This has been a longstanding position for many of these firms as the company has executed on its roll-up strategy in the payments industry.
* Allergan (AGN): Hedge funds such as Bridger Capital, Omega Advisors, Farallon Capital, Baupost Group, Appaloosa, and Paulson & Co all trimmed their stakes in this company that is the combined entity of two previously popular hedge fund stocks: Actavis and Allergan.