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Paul Tudor Jones' Firm Exits S&P 500 ETF Position in 2nd Quarter

Tudor Investment releases quarterly portfolio

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James Li
Aug 26, 2021

Summary

  • Firm shutters holdings in S&P 500 and Industrial Select Sector exchange-traded funds.
  • Firm boosts Nuance Communications holding and takes position in PPD.
  • Firm gains holding in Just Eat Takeaway.com following GrubHub acquisition.
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Paul Tudor Jones (Trades, Portfolio), founder and president of Tudor Investment, disclosed last week that his firm’s top trades during the second quarter include the closure of its positions in SPDR S&P 500 Trust ETF (SPY, Financial) and Industrial Select Sector SPDR Fund ETF (XLI, Financial), a boost to its holding in Nuance Communications Inc. (NUAN, Financial) and a new holding in PPD Inc. (PPD, Financial). The firm also gained a holding in Just Eat Takeaway.com Inc. (GRUB, Financial) while its holding in GrubHub Inc. (GRUB) was dissolved following the merger of the two companies.

The guru established the Boston-based firm in 1980. Tudor seeks to generate strong and consistent returns through innovative research, trading and investment techniques. The firm believes that continual innovation of its systematic investment approaches can expand its edge and compete in rapidly evolving markets.

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As of June 30, Tudor’s $5.29 billion equity portfolio contains 1,562 stocks, with 579 new positions and a turnover ratio of 51%. The top four sectors in terms of weight are technology, health care, industrials and financial services, representing 23.13%, 13.86%, 13.36% and 11.29% of the equity portfolio.

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SPDR S&P 500 Trust ETF

Tudor sold 781,515 shares of SPDR S&P 500 Trust ETF (

SPY, Financial), chopping 6.21% of its equity portfolio. Shares averaged $415.91 during the second quarter.

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According to the State Street Global Advisors’ webpage, the SPDR S&P 500 Trust seeks to track the investment results of the Standard & Poor’s 500 index. On Thursday, the index traded around 4,473.41, down approximately 22.78 points from Wednesday’s close of 4,496.19.

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Gurus with holdings in S&P 500 ETF Trust include

Ray Dalio (Trades, Portfolio)’s Bridgewater Associates and Jana Partners (Trades, Portfolio).

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Industrial Select Sector SPDR Fund

The firm sold 1.694 million shares of Industrial Select Sector SPDR Fund (

XLI, Financial), curbing 3.35% of its equity portfolio. Shares averaged $102.11 during the second quarter.

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According to the fund website, the Industrial Select Sector SPDR Fund seeks to track the performance of the S&P 500 Industrials Index.

Nuance Communications

Tudor purchased 2,505,603 shares of Nuance Communications (

NUAN, Financial), giving the shares 2.58% weight in the equity portfolio. Shares averaged $52.44 during the second quarter; the stock is significantly overvalued based on Thursday’s price-to-GF Value ratio of 3.25.

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GuruFocus ranks the Burlington, Massachusetts-based conversational artificial intelligence software company’s financial strength 5 out of 10 on the back of a strong Altman Z-score of 6 despite interest coverage and debt ratios underperforming more than 80% of global competitors.

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PPD

The firm purchased 2,502,132 shares of PPD (

PPD, Financial), allocating 2.18% of its equity portfolio to the stake. Shares averaged $44.97 during the second quarter.

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According to GuruFocus, the Wilmington, North Carolina-based clinical trial and laboratory service company’s cash-to-debt ratio of 0.22 underperforms more than 80% of global competitors, suggesting low financial strength.

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Just Eat Takeaway and Grubhub

As a result of the two companies’ merger on June 15, Tudor gained 4,527,352 shares of Just Eat Takeaway (

GRUB, Financial) while the firm’s 1,208,267-share stake in Grubhub was dissolved. Just Eat Takeaway’s shares averaged $19.33 during the second quarter.

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GuruFocus ranks the Dutch food marketplace company’s financial strength 6 out of 10 on the back of a strong Altman Z-score of 5.68, a solid Piotroski F-score of 6 and a debt-to-equity ratio that outperforms more than 78% of global competitors.

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Despite high F-scores and Z-scores, Just Eat Takeaway has a Beneish M-score that suggests possible earnings manipulation and a cash-to-debt ratio that outperforms just over half of global competitors.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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