TheChek News Flow

* Walt Disney (DIS) & 21st Century Fox (FOX/FOXA): This is now the third consecutive quarter where there

weren’t many true consensus buys. The majority of the names on this list are due to IPOs or mergers taking

place. The latter is the case for Walt Disney (DIS), as it completed its acquisition of some of the 21st Century

Fox (FOX / FOXA) assets. Many hedge funds that now show a new stake in DIS received it from their

previous stake in FOX/FOXA as a result of the transaction closing. Note that many of these funds also now

show ‘new’ stakes in 21st Century Fox (FOX/FOXA) even though they previously already owned Fox. This is

just to designate that they now own the new standalone Fox entity that houses assets like Fox News. Funds that

show new DIS stakes include Paulson & Co, Baupost Group, Farallon Capital, Hound Partners, and Glenview

Capital.

* Celgene (CELG): This is another risk arbitrage stock that graces the list. Celgene is being acquired by

Bristol-Myers Squibb (BMY) and many funds were playing the deal spread in this merger arb play. Funds that

played the deal include Third Point, Paulson & Co, Baupost Group, and Farallon Capital.

* Centene (CNC): Yet another arbitrage trade finds it way on this list for Q1. Centene is buying WellCare

Health Plans (WCG) in a $15 billion deal. Funds that focused on CNC include: Omega Advisors, Glenview

Capital, and Paulson & Co. You’ll also see a smattering of funds have acquired WCG shares as well.

* Takeda Pharmaceuticals (TAK): This stock is only on the list because Takeda completed its merger with

Shire (SHPG). As a result, former owners of SHPG shares now show ‘new’ positions in TAK shares. They

include Baupost Group, Paulson & Co, and Glenview Capital.

* Floor & Decor (FND): This is the only stock on the list that isn’t a result of a merger, IPO, or some other

transaction during the quarter. And while it was a consensus buy, it had a lower consensus rating than usual

and wasn’t quite as popular as some of the past stocks that have been on this list. Funds that were buying

include Coatue Management, Maverick Capital, and Hound Partners.

* Microsoft (MSFT): For the fifth consecutive quarter, MSFT ends up on this list. While tons of investors have

focused on ‘FANG’ stocks (Facebook, Amazon, Netflix, Google), MSFT shares have quietly been a very

strong performer and a favorite among top hedge funds. CEO Satya Nadella really has the company turned in

the right direction. Funds that were adding to their stakes in Q1 include Hound, Glenview, Maverick,

Duquesne Family Office, and Tiger Global.

* Centene (CNC): In addition to being a consensus new buy on the previous page, CNC also lands on the

consensus increase list as well. As detailed previously, the company is buying WellCare Health Plans in a $15

billion deal. Funds that added to pre-existing positions include Bridger Management, Maverick, and Viking

Global.

* Cigna (CI): Staying in the healthcare sector, insurer Cigna was also another consensus increase. Hedge funds

such as Maverick, Omega, and Glenview added to their previous positions. The company recently closed its

merger with pharmacy benefit manager Express Scripts (former ticker ESRX).

* Alphabet (GOOGL): Lastly, shares of the dominant search engine company also grace this list. Firms like

Duquesne, Omega, and Brave Warrior Advisors all boosted their exposure. The company’s YouTube video

platform has been growing and performing well. Not to mention, their Maps platform is considered to be an

undervalued and undermonetized asset. They’re rolling out a ton of features there like augmented reality (AR)

for directions, as well as implementing relevant advertisements based on a user’s location or search terms.

* Element Solutions (ESI), Dell Technologies (DELL), and Activision Blizzard (ATVI): It should be noted

that there weren’t many consensus sells this quarter and the few stocks that wound up on this list don’t have the

same degree of consensus as stocks on this list have in the past. This is basically to say that these are the most

consensus sells available. Rather than not listing anything, here are three names that came closest.

During Q1, the entity formerly known as Platform Specialty Products (PAH) and now known as Element

Solutions (ESI) was sold by funds including Pershing Square and Appaloosa Management. After completing a

corporate transaction, Dell Technologies (DELL) was sold by funds including Farallon and Carl Icahn. Lastly,

video game maker Activision Blizzard (ATVI) was dumped by the likes of Lone Pine Capital and Maverick

Capital, among others.

* Shire (SHPG) & 21st Century Fox (FOX / FOXA): These two stocks were both involved in mergers that

closed during the quarter: Shire with Takeda Pharmaceuticals (TAK) and then 21st Century Fox with Walt

Disney (DIS). This entry is more of a footnote than anything. Throughout the issue you’ll see funds ‘selling’

SHPG and showing ‘new’ positions in TAK. Additionally, other funds will show ‘sold’ positions in the old

Fox entity and a ‘new’ position in the new standalone FOX entity as well as a ‘new’ DIS position. All of these

stock transactions are a result of the respective corporate deals closing.

* Facebook (FB): This was by far the most consensus decrease across funds in the newsletter. Funds that

trimmed their exposure to the social media giant include Maverick, Brave Warrior, Hound, Farallon, Viking,

Coatue, Lone Pine, and Tiger Management. Shares have had a bit of an overhang due to the data privacy issues

with the Cambridge Analytica scandal, among other things. However, in the new year the company delivered

solid results all things considered and shares have surged from $130 to current levels of around $185.

* Alibaba (BABA): Shares of China’s leading e-commerce play were reduced by Farallon, Maverick, Coatue,

Lone Pine, and Viking Global. The trade war between the US and China certainly hasn’t helped shares and

worries of a slowdown in China linger, but many funds still retain stakes.

* Adobe Systems (ADBE): This possibly is due to profit-taking more than anything. After switching to a

subscription based revenue model a few years ago, ADBE has been printing money and shares have soared.

Funds that locked in some profits include Tiger, Maverick, Tiger Global, Viking, and Lone Pine.