In addition to the mauling suffered by the OG of all tech investors, Tiger Global, which we profiled earlier and which saw widespread sales and liquidations in its tech-heavy portfolio, a rundown of the latest 13F data reveals that many other hedge funds also cut their exposure to the stock markets worst performing sectors in the first quarter - primarily tech - while significantly increasing their holdings of surging energy shares, according to a Bloomberg analysis of the data. Overall, the moves have been beneficial to the funds with the sectoral trends continuing into the second quarter, and adverse to those funds - like Tiger and its offspring - which retained an overweight exposure to tech.
The S&P 500 fell 5% in the first three months of the year, but there was a wide variance in sector performance. Energy stocks led the way, soaring by 38%, while the worst performing groups were information technology (-8.6%), consumer discretionary (-9.2%) and communication services (-12%), all of which are especially sensitive to rising interest rates.
According to a summary of the latest trends courtesy of Bloomberg's Justin Zacks, investors decreased technology holdings by 1.4%. Among the largest aggregate sales in the group were Microsoft Corp., which saw its stock price decline 8.3% in the quarter, PayPal Holdings Inc. down 39%, and Shopify, down 51%.
The consumer discretionary sector saw a -0.8% decrease in its weighting by large investors. Home Depot Inc. had several large exits as mortgage rates soared to multiyear highs. Nike Inc. and Starbucks Corp. also saw large drops in aggregate holdings as supply chain issues and worries over demand in China due to Covid-19 lockdowns plagued the companies. Polen Capital Management reduced its stake in Starbucks by 12.3 million shares to 849,854 shares in the first quarter.
Funds decreased their exposure to the communications sector by 0.8%, led by large sales of Meta Platforms Inc., which lost 34% in the quarter. Edgewood Management sold 8.4 million shares of Meta in the first quarter, almost its entire position.
Institutional investors increased their weighting in the energy sector by 1.2% in the first quarter, led the sectors largest company, Exxon Mobil Corp., up 35%, as well as oilfield service companies Schlumberger NV, up 38%, and Baker Hughes, up 51% (as we have been saying since late 2020, these names have much upside). West Texas Intermediate crude rose 33% in the quarter as Russias invasion of Ukraine curtailed supply amid strong reopening demand as a spike in Covid-19 cases waned.
Energy is the top performing S&P 500 sector in the second quarter, up 8%, while consumer discretionary (-21%), information technology (-16%) and communication services (-16%) comprise the bottom three again. This is likely helping hedge fund performance in the second quarter relative to an 11.5% decline in the S&P 500.
The best performing S&P 500 stock in the first quarter, Occidental Petroleum Corp., saw its overall weighting increase due to a 96% rise in its share price. But several large holders used the run-up to take profits. Carl Icahn sold his entire stake of 32.1 million shares, while MFN Partners Management exited its position of 10.9 million shares in the quarter.
Epam Systems Inc., the information technology services company with a significant employee presence in Ukraine, Russia and Belarus, was the worst performing in the S&P 500 index in the first quarter, down 56%. Many institutional investors rotated out of the name, including Morgan Stanley, which sold 3.8 million shares.
13F filings from some of the most prominent investors are moving stocks Monday.
- Carl Icahn also cut his exposure to LNG producer Cheniere Energy Inc. by 40% to 9.72 million shares. A purchase of 644,510 shares of International Flavors & Fragrances Inc. was his only new position.
- Sachem Head Capital Managements largest position, representing 22% of disclosed assets, is International Flavors, which it cut slightlyby 410,850 shares to 6.43 million in the first quarter.
- Sachem Head was a buyer of beaten up tech stocks during the quarter, including 253,100 shares of Salesforce Inc., down 16% in first quarter, 2.84 million shares of Opendoor Technologies Inc., down 41%, and 5.72 million shares of Momentive Global Inc., down 23%.
- Soros Fund Management pared its holdings in transportation and automotive stocks, exiting its 860,002 share position in General Motors Co., its 529,297 share position in Uber Technologies Inc. and its 35,550 share position in Lithia Motors Inc.
- Soros did not sell any shares of its largest holding, Rivian Automotive Inc., which represents 19% of its disclosed assets, despite a 52% drop in shares during the quarter.
- Trian Fund Management sold its entire 20 million share stake in Comcast Corp., which fell 7% in the first quarter amid a subscriber slowdown due to a pandemic pull-forward and increased competition. The telecommunications providers success will likely depend on its high margin broadband business, Bloomberg Intelligence analyst Geetha Ranganathan wrote in a research note Monday.
- Trian took a new 450,267 share stake in food company Mondelez International Inc. in the first quarter. Unilever Plc is down 1% Monday after Trian disclosed it did not make any purchases of the consumer goods companys stock in the first quarter despite press reports to the contrary.
- Appaloosas only two new buys in the first quarter were casino stocks, 525,000 shares of Las Vegas Sands Corp. and 225,000 shares of Wynn Resorts Ltd.
- In contrast, the fund, whose founder David Tepper told CNBC on May 10 that he covered his Nasdaq short, exited 12 of its holdings in the first quarter including the sale of a 1.28 share position in T-Mobile US Inc. and a 2.25 million share position in General Motors Co.
- Soroban Capital Partners was a seller of big tech in the first quarter, exiting its 1.58 million share position in Meta Platforms Inc., down 34% in the first quarter, and its 531,135 share position in Netflix Inc., down 38%. Its sole new purchase was a 2.03 million share position in Yum! Brands, Inc.
- Berkshire Hathaway Inc. was a seller of pharmaceutical stocks in the first quarter exiting its 3.03 million share stake in AbbVie and its 5.2 million share stake in Bristol-Myers Squibb Co.
- Berkshire, which already holds 1.01 billion shares of Bank of America Corp., a position which was unchanged during the quarter, opened a new 55.2 share position in competitor Citigroup Inc., while exiting its 675,054 share stake in Wells Fargo & Co.
Here are some other moves made by prominent funds tracked by Bloomberg:
APPALOOSA
- Top new buys: LVS, WYNN
- Top exits: TMUS, GM, DHI, PHM, KMX, ALIT, EWY
- Boosted stakes in: UBER, AMZN, MSFT
- Cut stakes in: FB, MU, PCG, M, XLE, GT, GOOG, XOP
BAUPOST GROUP
- Top new buys: GTN, NE
- Top exits: PSTH, NLOK
- Boosted stakes in: EHC, FISV, DBX, GOOG, IS, NUVB, QRVO
- Cut stakes in: FB, INTC, VRNT, MU, DBRG, ATRA, JOBY
BERKSHIRE HATHAWAY
- Top new buys: OXY, HPQ, C, PARA, CE, MCK, MKL, ALLY
- Top exits: ABBV, BMY, WFC
- Boosted stakes in: CVX, ATVI, FND, RH, GM, AAPL
- Cut stakes in: VZ, STOR, RPRX, KR
COATUE MANAGEMENT
- Top new buys: DOCU, LCID, NVAX, PANW, ENPH, AMD, BYND
- Top exits: BZ, LRCX, PFE, CFLT, SHOP, AMAT, MA
- Boosted stakes in: SQ, PTON, DASH, MRNA, TSLA, UBER, PARA
- Cut stakes in: RIVN, DIS, AMZN, PYPL, BNTX, BEKE
CORVEX MANAGEMENT
- Top new buys: CEG, AES, FMX, CRC, SWX, PSTH
- Top exits: PLAN, EXC, CRM, TMUS, DIS, ZNGA, MA, V
- Boosted stakes in: FIVN, AMZN, UBER
- Cut stakes in: MGM, GOOGL, JPM, CCEP, MSFT, EQRX
DUQUESNE FAMILY OFFICE
- Top new buys: TECK, CTRA, PXD, PNC, CVE, ZEN, WDAY
- Top exits: GOOGL, PANW, CVNA, ABNB, SBUX, LYV
- Boosted stakes in: CVX, MSFT, SMAR, TMUS, KBR, PLTR
- Cut stakes in: BKNG, SNAP, FLEX, SE, EXPE, DISH
ELLIOTT INVESTMENT MANAGEMENT
- Top new buys: SU, DO
- Top exits: DELL, HTA, DUK, ARNC
- Cut stakes in: EVRG, VAL, NE
- Boosted stakes in: MPC, ETWO
GREENLIGHT CAPITAL
- Top new buys: SWN, WFRD, INSW, SNX, XLE, FCG, OIH
- Top exits: JACK, SONO, TWTR, CNXC, FREY, SATS
- Boosted stakes in: KD, GLD, CIVI, CC, LIVN, REZI
- Cut stakes in: GRBK, CPRI, BHF, GPRO, VSCO, ME
ICAHN
- Boosted stakes in: IFF
- Top Exits: OXY
- Cut stakes in: LNG, NWL, DK
JANA PARTNERS
- Top exits: M, LPSN
- Boosted stakes in: ZEN
- Cut stakes in: THS, LH, SPY, EHC, MRCY
LONE PINE
- Top new buys: TSM, FB, TEAM, DKS, BILL, TMO, HUBS
- Top exits: BEKE, ADBE, SNOW, NTES, CFLT, PVH
- Boosted stakes in: SQ, MSFT, RH
- Cut stakes in: SHOP, SNAP, MA, UNH, DASH, BBWI
MAVERICK CAPITAL
- Top new buys: SQ, WSC, COUP, COST, FIVE, BURL, LULU
- Top exits: ATVI, ASO, SE, DD, CFLT, PCOR, BHG
- Boosted stakes in: TMUS, OSH, ULTA, DKS, SEAS, UAA
- Cut stakes in: CPNG, NFLX, LRCX, FB, ADBE, V, AMAT
SACHEM HEAD CAPITAL MANAGEMENT
- Top new buys: ZEN, MNTV
- Top exits: KBR, DEN
- Boosted stakes in: LIVN, CVNA
- Cut stakes in: IFF, UBER, FLEX, USFD
SOROBAN CAPITAL
- Top new buys: YUM
- Top exits: FB, FIS, NFLX, MA
- Boosted stakes in: CVE, X, AA, NTR
- Cut stakes in: LOW, MSFT, ADI, V
SOROS FUND MANAGEMENT
- Top new buys: ZNGA, FRSH, TEAM, LCID, TJX, MGM, STRY
- Top exits: ATVI, GM, ALLY, UBER, MQ, OMF, HAIN
- Boosted stakes in: CERN, GOOGL, JPM, NKE, ACN, INTU, CRM
- Cut stakes in: DHI, LBRDK, ARMK, PTRA, ELAN, OPEN
STARBOARD VALUE
- Top new buys: HUM, MRCY, KSS, LPSN, ETAC, IRRX, TGR
- Top exits: SST
- Boosted stakes in: GDDY, CYXT, WTW, ARTE, ACAQ, IQMD
- Cut stakes in: ACIW, CERN, ON, CTVA, CVLT, IWM
THIRD POINT
- Top new buys: CSX, AA, OVV, SU, MOS, IR, CVE, WDC
- Top exits: GOOGL, UPST, ACN, CSGP, BURL, DIS
- Boosted stakes in: S, EQT, ZEN, HTZ, DD, CANO
- Cut stakes in: AMZN, INTU, MSFT, RIVN, DHR
TIGER GLOBAL
- Top new buys: STRY, DAVE
- Top exits: NFLX, ADBE, COUP, RUN, PYPL, ASAN
- Boosted stakes in: CRWD, LI, MNDY, SQ, BZ, S, TOST
- Cut stakes in: ZM, FB, DASH, UBER, AMZN, DOCU
TRIAN FUND MANAGEMENT
- Top exits: CMCSA
- Boosted stakes in: IVZ, MDLZ, GE, JHG, FERG
- Cut stakes in: SYY, PG
VALUEACT
- Top new buys: BLD
- Boosted stakes in: NSIT, KKR
- Cut stakes in: STX, TRN, BHC, SLM