Top 10 Stocks That Matter Most To Hedge Funds Per Goldman Sachs (Q4 2016)

Goldman Sachs' quarterly hedge fund trend monitor outlines what stocks matter most to hedge funds.  Here's the list as the fourth quarter 2016:


Top 10 Stocks That Matter Most To Hedge Funds: Q4 2016

- Alphabet (GOOGL / GOOG)

- Facebook (FB)

- Amazon.com (AMZN)

- Bank of America (BAC)

- Charter Communications (CHTR)

- Apple (AAPL)

- Microsoft (MSFT)

- Yahoo (YHOO)

- Time Warner (TWX)

- NXP Semiconductor (NXPI)


As you can see, it's quite tech-heavy.   The major exception is Bank of America (BAC), which was a consensus buy in Q4 among hedge funds we track in our newsletter.

For more on what stocks hedge funds have been buying & selling, check out the brand new issue of our premium newsletter that reveals the portfolios of 25 top funds.

Hedge Fund Third Point Reduces Equity Exposure For Third Consecutive Month

For the month of July, Dan Loeb's hedge fund firm Third Point offshore fund was up 0.3%. Year to date, they are up 6.9% versus 3.9% for the S&P 500. Seeing 18.4% annualized returns, it's no wonder that Third Point is closed to new investors.

Net Exposures Down Yet Again

Loeb's hedge fund is only 23.3% net long equities (39.7% long and -16.4% short). In June, we detailed how Third Point reduced equity exposure again. July marks the third consecutive month in which Loeb's firm has reduced risk.

In July they ratcheted down exposure from 30.7% net long down to only 23.3% net long. Caution is the name of the game for Loeb's firm and he outlines the rationale in his quarterly letter.

Their largest net long equity exposure comes in the energy sector at 6.1%, as well as consumer and basic materials each at 5.7%. They are net short technology and utilities.

In credit, Third Point is 20.9% net long (32.2% long and -11.3% short). They continue to be net short government issues and their largest net long exposure comes in asset backed securities (ABS).


Third Point's Top Positions

1. Gold
2. Delphi Corp
3. El Paso (EP)
4. CIT Group (CIT ~ multiple securities held)
5. Mosaic (MOS)

Loeb's stake in MOS is brand new and the thesis on Mosaic is detailed in Third Point's Q2 letter. They also continue to hold Delphi, a position numerous hedgies like.

In the past month, Third Point's top winners include gold, Peregrine Metals (PGM), CVR Energy (CVI), Delphi, and an interest rate hedge. Their top losers included NXP Semiconductor (NXPI), CIT Group (CIT), Pall Corp (PLL), Health Net (HNET), and Brenntag AG (BNR).

Shares of NXPI have traded down almost 43% in the past 3 months. Many see this company as a play on the future 'mobile wallet' due to its near field communications (NFC) chip that allows transactions between phones. Third Point has been able to offset the negative performance of this company with gains in other areas.

Dan Loeb's Third Point Reduces Equity Exposure

Dan Loeb's Third Point Offshore Fund finished May -0.4% and year-to-date is up 9.7%. Managing around $4 billion, the hedge fund is closed to new investors and has seen 18.8% annualized returns.


Equity Exposure

The month of May was a volatile one for the markets in general and hedge funds were no exception. Third Point ratcheted down exposure to equities as they were 42.6% net long at the end of the month (60.3% long and -17.7% short). The month prior, the hedge fund was 46.8% net long equities, marking a 4.2% decrease in exposure from April to May.

Third Point's largest exposure this time around continued to be the consumer sector at 9.5% net long and basic materials at 8.2% net long.

Credit Exposure

In credit, Third Point was 34.4% long, -7.7% short, leaving them 26.7% net long. This is down from 29.4% net long the month prior. Their largest exposure in this segment continues to be asset backed securities.

Top Positions

Third Point's top holdings at the end of May were:

1. Gold
2. Delphi
3. El Paso (EP)
4. Technicolor (Multiple Securities owned)
5. CVR Energy (CVI)

Earlier today we posted up that David Tepper's Appaloosa Management recently bought more CVR Energy. Also, we highlighted how Delphi will be going public and there are numerous hedge funds involved in that name as well.

In the month of May, Third Point's top winners included: Delphi, El Paso, Short A, Short B, and Aveta.

The hedge fund's top losing positions for the month included: NXP Semiconductor (NXPI), NewPage, Williams Companies (WMB), Big Lots (BIG), and gold.

For rationale behind some of their investments, check out Third Point's investor letter.

Third Point Reveals Technicolor Position: Latest Exposure Levels

Dan Loeb's hedge fund Third Point returned 1.4% in April and is now up 10.1% for the year. His Offshore Fund has returned 19% annualized, manages $6.8 billion, and recently closed to investors.


Equity Exposure

As of the end of April, Third Point's largest net long equity exposure was in the consumer sector at 10% and energy at 9.5% according to their latest monthly factsheet. Their overall equity exposure is 60.2% long, -13.4% short, leaving them net long 46.8%. This marks a slight increase in net long exposure from last month, up 4.6%. In this arena, Third Point is largely focused on spin-outs.

Credit Exposure

Third Point is overall 29.4% net long credit with their largest exposure coming from mortgage backed securities at 17.1% and distressed at 11.9%. These levels remain largely the same from last month. They also remain short government credit at -4.7%.

Top Positions

- Gold
- Delphi Corp
- El Paso (EP)
- NXP Semiconductor (NXPI) ~ multiple securities held
- Technicolor (TCH) ~ multiple securities held

This is the first time we've seen a mention of Technicolor in their portfolio. Notably absent from their top positions this time around is Chrysler, which was their third largest holding last month. Delphi continues to be a top holding for Third Point and a few days ago we highlighted that David Einhorn's Greenlight Capital bought Delphi recently as well.

Third Point's winners in the past month include gold, LyondellBasell (LYB), NXPI, Delphi, and El Paso (EP). Losing positions in April include short A, Icelandic Banks (debt), CVR Energy (CVI), Sunoco (SUN), and NewPage.

You can read Third Point's theses on CVR Energy and El Paso here.

Hedge Fund Third Point Reduces Net Long Exposure: Latest Positioning

Dan Loeb's hedge fund firm Third Point LLC has released its March performance and exposure report. Third Point returned 0.9% in March and is up 8.6% year to date versus 5.9% for the S&P 500. Third Point's Offshore Fund now has an annualized return of 19%.

Latest Exposure Levels

Third Point is net long equities to the tune of 42.2%. This is a decrease of 14%, down from last month's 56.2% net long exposure. As various crises (risk) around the world escalated, Third Point has ratcheted their exposure down. In Loeb's year-end letter, he voiced that he was concerned about the consensus bullish view.

Third Point's largest net exposure is in energy, basic materials, and consumer. In credit, Third Point is 17.1% net long asset backed securities (RMBS & CMBS exposure), 11.5% net long distressed, 6.1% net long performing and -5.1% short government securities. Their credit allocations are largely unchanged from last month.

Third Point's Top Positions:

1. Gold
2. Delphi Corp
3. Chrysler
4. El Paso Corp (EP)
5. NXP Semiconductor (NXPI) ~ multiple securities held

In February, we highlighted how Loeb started El Paso as a new position and it remains one of their top holdings. This month, their exposure to NXP Semiconductor (NXPI) replaces LyondellBasell (LYB) as their fifth largest position.

NXPI is a prime player in the NFC (near field communications) space that seems to be sweeping the mobile industry as interest in mobile payments heats up. The company recently priced a secondary offering at $30 per share and has been doing a roadshow to drum up investor interest. This offering significantly helps liquidity in the stock and should allow larger hedge funds to accumulate positions.

Top Winners & Losers for Third Point

We get a glimpse at some of Third Point's other positions with their top winners from the month, including: CVR Energy (CVI), Short A, Statoil Fuel & Retail ASA (SFR), Aveta, and Health Net (HNET). Their top losing positions for the month include Potash (POT), PHH Corp (multiple securities held), Inmarsat, ProSieben (multiple securities held), and El Paso.

To see analysis of Loeb's portfolio and the investment thesis behind some of his picks, check out our Hedge Fund Wisdom newsletter.

Dan Loeb & Third Point's Latest Positioning & Exposure

Dan Loeb's Third Point Offshore Fund recently released its January performance and the fund was up 3.9% for the month compared to a 2.4% return in the S&P 500. To date, Third Point has seen 18.9% annualized returns with a low correlation to the market (0.42).

Equity Exposure

In equities, Loeb's hedge fund has its highest net long exposure in basic materials at 16.4% net long. Their second highest exposure comes with a 12.9% net long position in the consumer sector. In total, Third Point is 68.9% long and -7.9% short, leaving the fund 61% net long.

Credit Exposure

Loeb is 31.1% net long credit with his largest exposure in mortgage backed securities (MBS) at 19.3% net long. He is also 12.3% net long distressed and -10.1% short Government bonds.


Top Positions

As of the end of January, Third Point's top positions remain unchanged from previous months:

1. Gold (physical)
2. Delphi (multiple securities held)
3. Chrysler (multiple securities held)
4. Potash (POT)
5. Lyondell Basell (LYB)


Top Winners & Losers

Third Point's portfolio attributed positive performance in the month to shares of Potash (POT), Smurfit-Stone Container (SSCC), Massey Energy (MEE), NXP Semiconductor (NXPI), and Aveta. We recently highlighted how Third Point opposes SSCC's takeover and other hedge funds have been active in the name as well. SSCC is one of the many post-reorganization equities found in Loeb's portfolio. Last year we cited how Third Point likes post-reorg equities and just recently we noted that John Paulson likes them too.

Regarding his position in NXP Semiconductor, Loeb highlighted NXPI in a recent letter. The company is involved in near field communications and is seen as a prime play on mobile payments. Third Point also saw solid performance from its position in Massey Energy as the company received a takeover offer from Alpha Natural Resources (ANR).

Positions that negatively affected Third Point's portfolio last month include Gold, Brenntag AG (ETR:BNR), Mead Johnson Nutrition (MJN), African Barrick Gold (LON: ABG), and Accuride (ACW).

To learn to invest like this hedge fund manager, check out Dan Loeb's recommended reading list.

Dan Loeb & Third Point's Latest Exposure Levels

Dan Loeb's Third Point Offshore Fund finished 2010 up 33.5%, compared to an S&P 500 return of 15.1%. Since inception in December of 1996, Third Point has returned an impressive 18.6% annualized. The hedge fund manager recently released its latest December exposure levels so we wanted to provide readers with an update.

Here are Third Point's top holdings as of year end:

1. Gold
2. Delphi Corp (multiple securities held)
3. Chrysler (multiple securities held)
4. Potash (POT)
5. Lyondell (LYB)

You can learn about more of Third Point's investments in our newsletter. Physical gold continues to be a massive position for Loeb and he potentially could be using the precious metal as some sort of tail risk hedge. Interestingly enough, Third Point continues to own Potash (POT) even after BHP Billiton's bid for the company failed. It appeared as though the hedge fund originally purchased POT as a arbitrage trade but maybe they like the natural resource exposure as an inflation play. Or maybe they still see the company as a viable takeover target, who knows.

Lastly, Lyondell finally shows up as a top holding for Third Point as the company exited bankruptcy. The chemical maker's equity now trades under ticker symbol LYB. Back in the second quarter we noted Loeb's fondness for post re-organization equities, and that portfolio theme continues.

Exposure Levels

Third Point has its highest net long equity exposure in basic materials and financials. In total, they are 60.1% long, -8.4% short, leaving them 51.7% net long equities. One geographic note is that Third Point had previously been net short the Asia region, but are now net long ever so slightly.

In terms of credit exposure, Third Point has its highest net long exposure in mortgage backed securities (MBS) at 19.4%, followed by distressed at 14.2% net long. Third Point is also net short government securities at -10.9%. Overall in credit the hedge fund is 32% net long.

Top Winners

In Loeb's portfolio, big winners include Delphi (multiple securities held), NXP Semiconductor (NXPI), Lyondell (LYB), Chrysler (multiple securities held), and Accuride (ACW). He highlighted NXPI in his recent letter to investors as Third Point participated in the IPO and sees upside in the name. Shares of Accuride also recently started trading in late December after re-listing on the New York Stock Exchange.

Top Losers

Third Point's portfolio saw weak performance from the following plays: three undisclosed short positions (undoubtedly due to the market's large rally), Fortis (multiple securities held), as well as State Bank of India (BOM:500112), a name we have previously not seen disclosed.

That wraps up our summary of Third Point's end of year exposure levels. You can check out more of Third Point's portfolio in our newsletter. And to learn to invest like Dan Loeb, check out his recommended reading list here.

Dan Loeb's Third Point Q3 Letter to Investors

Dan Loeb's hedge fund firm Third Point is finally out with its third quarter letter to investors. The first half of Loeb's letter focuses on Ben Bernanke and the second half focuses on Third Point's portfolio. The latter portion is what we'll highlight below.

Third Point recently received AR Magazine's award for event driven fund of the year. Third Point now manages $3.6 billion and at the end of the third quarter its Offshore Fund was up 19.2% for the year. The fund now has seen 18.2% annualized returns since inception, an obvious reason to track them. Recall that we've provided commentary and analysis of Loeb's investments in our newsletter. And if you desire to be a successful investor like Loeb, head to his recommended reading list.


Anadarko Petroleum (APC)

Turning to Loeb's recent commentary, he touches on his firm's position in Anadarko Petroleum. We originally revealed this position back in August and he purchased debt securities in June and July due to the opportunity presented as a result of the Gulf oil spill.

Of the investment he writes, "Our analysis was correct and in hindsight, investors could have generated similar returns by investing in anything 'Macondo-related (e.g. RIG, BP and Anadarko equities). However, Anadarko bonds offered similar upside to the aforementioned securities but with effectively zero downside in the event that either our thesis on the severity of the spill was incorrect or there was a material decline in oil and.or natural gas prices, and so we delivered excellent risk-adjusted returns."

In his commentary, Loeb mentions that all oil spill related securities have rallied furiously since the event. He doesn't mention whether or not Third Point still owns these securities and almost makes it sound like he has since exited the position (but that's speculation on our part).


NXP Semiconductor (NXPI)

Loeb also reveals a new position in his letter as Third Point participated in NXPI's IPO. He notes that, "the company is in the final stages of completing a substantial operational and capital structure restructuring, which is driving free cash flow, rapid deleveraging and attractive new opportunities like a leadership position (>50% market share) in Near Field Communications, a fast emerging mobile payment technology being adopted by Google Android, Nokia and Blackberry." The most interesting thing here is that despite the rally in shares, Loeb sees "substantial upside" in this stock.

Top Positions

While not specifically listed in the letter below, we have since seen Third Point's November portfolio update where they list the following as their top positions:

- Gold
- Delphi (multiple securities held)
- Potash (POT)
- Chrysler (multiple securities held)
- Lyondell (LYB)

Of note are the fact that Loeb owns physical gold, not the exchange traded fund. Fellow hedge fund manager David Einhorn of Greenlight Capital stores physical gold and John Burbank of Passport Capital also prefers the physical metal.

Embedded below is Third Point's third quarter letter to investors:



You can download a .pdf copy here.

To see what else Dan Loeb has invested in, be sure to check out our Hedge Fund Wisdom newsletter. And to learn to invest like this hedge fund manager, head to Loeb's recommended reading list.