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Rupert Hargreaves
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Hedge Funds' Favorite Bets in 1st-Quarter 2019

Here's where the world's best investors were investing their money in the first 3 months of 2019

May 23, 2019 | About:

Over the past few weeks, hedge funds have been filing their 13F reports with the Securities and Exchange Commission. These reports give fantastic insight into what the world's best investors are buying and selling.

These filings should only be used as a rough guide as to what the hedge fund industry likes because they are backward-looking documents and only reflect equity positions at the end of each calendar quarter.

There is no way of telling if these funds still own the positions profiled, what price they acquired them and if they did any other trading throughout the period under review.

What's more, these reports only detail equity positions; they exclude credit and cash holdings as well as any other more esoteric assets.

Still, they give us insight into what the hedge fund industry is doing in general. All of the information below is supplied using data from GuruFocus, SEC filings and brokerage reports.

Hedge funds' top bets

For the past few quarters, big names have been buying leading tech stocks, and the first quarter of 2019 was no exception. The most-bought stock last quarter was Microsoft (NASDAQ:MSFT) according to data from GuruFocus with six major names acquiring a position in the technology behemoth. That being said, a number of substantial owners were also selling.

For example, Chris Hohn's TCI Fund Management reduced its ownership position by around 20%. Although it still owns $2 billion worth of stock in the tech giant, the holding has gone down to the third position in the TCI portfolio. It is important to note that Hohn reduced the sizing of all of his three largest positions -- Alphabet, Charter Communications and Microsoft -- during the first quarter.

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He redeployed some of this capital into new positions, but overall, he was a net seller of stocks in the quarter. As noted above, due to the limited information contained on 13Fs, it is difficult to tell what TCI did with this cash.

Moving down the list of the most traded stocks by hedge funds last quarter, coming in at second place is JPMorgan Chase (NYSE:JPM) according to GuruFocus data. Warren Buffett (Trades, Portfolio)'s Berkshire Hathaway (BRK.A)(BRK.B) was the largest buyer during the first quarter, increasing its position by around 20% to 59 million shares in the bank.

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Glenn Greenberg (Trades, Portfolio)'s Brave Warrior Advisors was also a buyer. This firm increased its holding by 7% to just over 2 million shares, which makes this the second-largest holding in the Brave Warrior portfolio after Google's parent company Alphabet. Other funds buying in the quarter include Weitz Value, Markel Asset Management, Maverick Capital and Gardner Russo & Gardner.

Celgene Corp (NASDAQ:CELG) was the next most-bought stock in the first three months of 2019. Some big names initiated some large positions in the company. These include David Abrams' (Trades, Portfolio) Abrams Capital Management, which acquired 6.8 million shares in the business, catapulting it to the top of the Abrams Capital portfolio. This $640 million position now accounts for 18% of assets under management.

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Seth Klarman (Trades, Portfolio)'s Baupost Group also gobbled up shares, buying 4 million units of stock during the quarter, making the position 3.3% of the Baupost equity portfolio (although I estimate this portfolio accounts for just a third of total assets under management). Dan Loeb was also a buyer. He acquired nearly 2 million shares in the company, and Prem Watsa (Trades, Portfolio)'s Fairfax initiated a small position of 15,000 shares.

The final company profiled here is the fourth most-bought by hedge funds during the first quarter of the year, United Technologies (NYSE:UTX).

Bill Ackman (Trades, Portfolio), who is trying to get United to break up, added to his position of 5.8 million shares and he was joined by Dan Loeb's Third Point, which initiated a position for the first time, acquiring 6.5 million shares in the manufacturing group, which made it a 10% portfolio position. Three other notable hedge funds added to their holdings of the stock during the first three months of 2019.

Disclosure: The author owns shares in Berkshire Hathaway.

Read more here:

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Hedge Funds Love Pacific Gas and Electric

Seth Klarman Loads Up on eBay

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About the author:

Rupert Hargreaves
Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors.

Rupert holds qualifications from the Chartered Institute for Securities & Investment and the CFA Society of the UK. He covers everything value investing for ValueWalk and other sites on a freelance basis.

Visit Rupert Hargreaves's Website


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