Consensus New Positions
* eBay (EBAY): Stakes in this e-commerce company’s shares were acquired by the likes of Carl Icahn, Soros Fund, Perry Capital, Omega Advisors, and Farallon Capital. Lee Ainslie’s Maverick Capital also started a brand new position and made it their top holding. Icahn is pushing for the company to sell or spin-off its fast growing payments arm (PayPal) but management has resisted thus far.
* American Airlines (AAL): American Airlines completed its merger with US Airways (former ticker LCC) to create the new AAL. The domestic airline industry has undergone consolidation and many funds are bullish on the prospects for higher ticket prices and planes with less empty seats. Some funds (like Appaloosa Management) owned LCC prior to the merger so those shares became AAL shares. Other funds that disclosed new positions this quarter include Tiger Management, Soros Fund, and Paulson & Co.
* Actavis (ACT): This company just made a bid for Forest Laboratories (FRX) a few days ago. This is similar to some of the popular pharmaceutical roll-up stories that hedge funds like (i.e. Valeant Pharmaceuticals and Endo Health Solutions). ACT is domiciled in Ireland, giving them advantageous tax treatment. Hedge funds that established new stakes in Q4 include Soros Fund, JANA Partners, Farallon Capital, and Blue Ridge Capital.
* Time Warner Cable (TWC): This cable company was seen as ‘in play’ as rumors circulated that they would be bought out by Charter Communications (CHTR). However, it was recently announced that Comcast (CMCSA) had made a superior bid and will be paying 2.875 CMCSA shares for each TWC share. This deal could face regulatory scrutiny, as it would combine the #1 and #2 cable operators in America. Hedge funds that bought new positions in the quarter include Soros Fund, Bridger Management, Perry Capital and Maverick Capital.
* Caesars Acquisition (CACQ): Most of these hedge funds weren’t out buying shares in the open market. Instead, they received shares via a spin-off from Caesars Entertainment (CZR), which they also owned. CACQ houses the company’s online gaming ventures and is seen as a growth company. Hedge funds that reported stakes in this new ticker include Omega Advisors, Soros Fund, and Paulson & Co.
Consensus Sold Positions
* J.C. Penney (JCP): After trying to catch the falling knife, many hedge funds capitulated and tossed in the towel on this troubled retailer. Funds like Perry Capital were buying at higher prices and then selling at lower ones. Appaloosa Management actually bought the dip successfully and got out with a quick gain for a trade though. * Equinix (EQIX): This consensus sell was dumped by Coatue Management, Farallon Capital, Lone Pine Capital and Viking Global. Of these, Coatue’s exit is the most notable as this was an $800+ million position for them and was a stock they’d owned for almost two years. Shares of numerous data center companies have been under siege.
* Penn National Gaming (PENN): Many hedge funds owned this company for the spin-off of Gaming & Leisure Properties (GLPI), the first gaming real estate investment trust (REIT). With that catalyst behind them, hedge funds such as Omega Advisors, Passport Capital, Pennant Capital and Perry Capital dumped PENN shares.
* Visa (V): This looks to be mainly a case of locking in profits. The vast majority of funds that sold their Visa positions have owned shares for quite some time. V shares are up over 43% in the past year and up over 304% over the past five years. Many of these hedge funds also own the other half of the pure-play payment processing duopoly: Mastercard (MA). What’s interesting is that some of these funds dumped their V shares, but retained their MA stakes even though MA shares have performed just as well. MA (the smaller company) is seen as the growth play with more exposure to credit cards while V has more debit card exposure and is the larger player.
* Hertz (HTZ): Hertz was sold by Appaloosa, Soros Fund and Tiger Management. Over the past two quarters, Blue Ridge Capital swapped out their HTZ position for rival Avis Budget (CAR). Realistically, this is probably more of a ‘mixed activity’ name when you consider that Third Point and a few other funds scooped up HTZ shares at the same time.
Consensus Decreased Positions
* Priceline.com (PCLN): This stock is at the top of this list for the second consecutive quarter. Hedgies are most likely locking in profits and reducing position sizes, as this stock has been a high-flyer for quite some time. Funds that trimmed their stakes include Soros Fund, Farallon, Maverick, Pennant, and Coatue. Lone Pine and Blue Ridge also trimmed their positions, but PCLN is still a top seven holding at both funds.
* Charter Communications (CHTR): This is another stock that has graced this list for the second straight issue. CHTR has been pushing to consolidate the domestic cable industry by trying to buy Time Warner Cable (TWC). Unfortunately, Comcast (CMCSA) beat them out with a higher bid. Funds such as Bridger, Farallon, Lone Pine, Maverick, Coatue, and Soros were reducing their positions in Q4.
* Facebook (FB): Shares of this social media giant have been ripping higher for the past two quarters. After their botched initial public offering where shares tumbled, hedge funds stepped in and bought. The company has shown that mobile monetization wasn’t going to be a problem like many investors originally thought and shares soared from $25 in June up to $55 by year-end. Since then, FB shares have headed even higher to $67. Soros, Maverick, Bridger, Lone Pine, and Coatue trimmed their stakes.
* American International Group (AIG): This is another stock that has been on this list for multiple quarters in a row. As the discount to book value has continued to narrow, hedge funds have taken some of their gains from this position and allocated the capital to other ideas. But even after many of these hedge funds took profits, they still retain sizable AIG stakes.
* MetLife (MET): Hedge funds that trimmed their MetLife exposure include Omega Advisors, Maverick, Appaloosa, and Viking.