>>> Consensus New Buys
* Spotify (SPOT): This music streaming giant completed a direct listing during the quarter rather than the typical initial public offering, but regardless they now have a publicly traded vehicle. Funds such as Tiger Management, Maverick Capital, Coatue Management, and Tiger Global all show stakes in the company. Keep in mind, however, that some of these firms invested back when the company was still private (like Tiger Global) and have owned it for some time. The company’s main competition is the likes of Pandora (P), Apple Music, and other music streaming services as the music industry has evolved from buying CDs to buying MP3s to now streaming.
* NXP Semiconductor (NXPI): Hedge funds such as Appaloosa Management, Third Point, and Tiger Management all show new stakes in the company. During the quarter, NXPI’s merger with Qualcomm (QCOM) was not allowed by Chinese regulators and the deal was called off. This stock is featured in the investment thesis summary section later this issue.
* 21st Century Fox (FOXA): This media giant has been the subject of a heated bidding war between Walt Disney (DIS) and Comcast (CMCSA). In the end, DIS prevailed and the deal has already been approved by US regulators with the condition that Disney sell Fox’s regional sports networks. The deal still has to pass other regulators and is anticipated to close sometime next year. Funds such as Paulson & Co, Tiger, and Farallon Capital all show new positions.
* AutoZone (AZO): Funds including Greenlight Capital, Maverick Capital, and Coatue Management all show small new stakes in the automotive parts supplier. Bears have pointed to Amazon’s (AMZN) increasing presence in the automotive supplies arena as a big competitive threat. Bulls argue that not all the inventory is sold online and often times consumers or mechanics need parts right away rather than in two days.
>>> Consensus Increased Positions
* Microsoft (MSFT): This is the second consecutive quarter this stock has graced this list. This time around, Third Point, Farallon, Maverick, Coatue, Viking Global, and Lone Pine Capital all added to their stakes. While ‘FANG’ stocks have been all the rage (Facebook, Amazon, Netflix, and Google), MSFT has steadily climbed higher and been quite the performer in its own right.
* Charter Communications (CHTR): Prior to and during its merger with Time Warner Cable, Charter Communications was a consensus hedge fund trade. The past few quarters it had seemingly fallen out of favor a bit, but in the second quarter funds returned to shares, utilizing the pullback to add to their stakes. Managers such as Bridger Management, Glenview Capital, Farallon, and SPO Advisory all boosted their exposure to the US broadband giant.
* Alibaba (BABA): Hedge funds including Tiger, Maverick, Tiger Global, and Lone Pine all accumulated more BABA shares in Q2. Chinese internet stocks as a whole have pulled back from their highs this year as the Chinese market in general has been in bear market territory, prompting some funds to bolster their positions. The current U.S.-China trade war also probably hasn’t helped things.
* United Technologies (UTX): Pershing Square, Third Point, and Viking Global all added to their UTX positions during the quarter. The company has been reviewing strategic alternatives and many of these funds believe that the company should divest some business units or spin them off into three separate entities. The company will announce the results of its review in the fourth quarter.
>>> Consensus Sold Positions
* Dominos Pizza (DPZ): When asked what stocks have been some of the best performers over the past five years, many people probably wouldn’t be quick to rattle off a pizza maker. But DPZ shares have performed extremely well as the company embraced digital selling platforms and reinvented itself a bit. Funds that finally took profits in the name include Coatue, Maverick, and Tiger.
* Bloomin Brands (BLMN) & Sprouts Farmers Market (SFM): There were hardly any consensus sells this quarter apart from Dominos. These two stocks were sold by a lot of funds, but the position sizes were incredibly small to begin with, so it’s not a material transaction. Coincidentally (or not), the same group of funds sold both of these stocks: Coatue, Greenlight, and Maverick Capital.
* Time Warner (TWX) & Monsanto (MON): Both of these stocks were risk arbitrage trades and their mergers recently closed. Time Warner was acquired by AT&T (T), and this also explains why T now shows up as a ‘new position’ in some portfolios throughout the issue. Monsanto was acquired by Bayer.
>>> Consensus Decreased Positions
* Facebook (FB): A lot of funds reduced exposure to the social media giant during the quarter, but it’s also worth mentioning that there was a decent amount of other funds that were actually buying too. So in reality, this is more of a ‘mixed activity’ name, but the trading action definitely skewed negative enough to land on this list. Funds that trimmed their FB stakes include Tiger, Omega, Farallon, Maverick, Third Point, Lone Pine, Appaloosa, and Viking Global. The company has recently had data privacy issues with the Cambridge Analytica scandal. And in news since the end of the quarter, the FB’s recent guidance was well below investor expectations as they lowered both growth and margin expectations significantly.
* UnitedHealth Group (UNH): Maverick, Omega, Appaloosa, Viking Global, and Lone Pine all reduced exposure to the biggest health insurance provider in the U.S.
* Shire (SHPG): Omega, Maverick, Paulson, and Glenview all reduced exposure to this pharmaceutical company. And though the reduction was consensus, many funds still hold noteworthy stakes (especially Paulson, which counts SHPG as its third largest holding).
* Adobe (ADBE): This is most likely a case of profit taking given that ADBE shares have been a rocketship the past few years. The company’s business model transition to a subscription service has been a huge success and funds that realized some gains include Tiger, Omega, Maverick, and Lone Pine.