Browsing articles from "March, 2014"

Friday News – Good Day for the Rich, GS and Pot Smokers

Mar 7, 2014   //   by Profitly   //   Market, News  //  Comments Off on Friday News – Good Day for the Rich, GS and Pot Smokers

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U.S. gets positive job numbers after 2 months of dissapointment (WSJ)

Mohamed El-Erian trying to undermine a colleague? (Reuters)

Putin is crushing the Russian stock market (Bloomberg)

Good news for marijuana enthusiasts (NYPost)

Turns out elevators go up and down at Goldman Sachs (CNN)

Household net worth hits a record (WSJ)

There is a chase for the creator of Bitcoin happening right now (WSJ)

Where Hedge Funds Are (And Aren’t) Putting Their Money

Mar 5, 2014   //   by Profitly   //   Profitly  //  1 Comment

 

Factset is one of my favorite websites. They have great information covering many areas of finance. In case you haven’t heard of it before, Factset Research Systems Inc., is:

A multinational financial data and software company headquartered in Norwalk, CT. The company provides financial information and analytic software for investment professionals.

Not all of their data is available to the public, but they do publish great reports quite frequently. Learning more about the markets, where money is flowing, and staying up to date on recent news will make you a better trader. Knowledge is power! This is just as good as having stock trading tips and tricks.

Anyways, one of Factset’s recent posts (link) compiled some stats from 13F Season (a quarterly filing required of institutional investment managers with over $100 million in qualifying assets). Factset’s data gives us a sector breakdown of where hedge funds bought and sold in the recent quarter. In this particular report, energy represented the biggest area that hedge funds found value at the end of 2013. The Reformed Broker points out that this makes sense since energy was a laggard sector and long/short equity guys are frequently driven by valuation. When a sector is lagging, the valuation is likely lower therefore drawing in people looking for value plays.

According to the report, the top 50 hedge funds added a majority of their exposure to the Energy sector. How much exactly? The funds added more than half a billion dollars in exposure to each of four North American companies related to oil and gas, refining, or energy equipment and services: Whiting Petroleum, Valero Energy Corporation, Talisman Energy, and Cameron International.

Some of the noteworthy information from these companies would be that Valero Energy rose nearly 50% since the beginning of Q4, before falling roughly 7% over the past few trading sessions. Sounds like that was a pretty good play following a poor year for hedge funds. The report also shows that the most overweight sector continues to be Consumer Discretionary, as +8.2 percentage points relative to the S&P 500.

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Image via FactSet

In analyzing the 50 largest hedge funds, Factset found some other noteworthy information as well. Hedge funds increased their equity exposure by 3.6% in the fourth quarter of 2013. Which company saw the highest increase in exposure? That would be Apple, with inflows of +$1.8 billion. That was primarily due to half-billion dollar purchases from Coatue Management, Citadel Advisors, and Icahn Associates (o hey Uncle Carl!). There were some further inflows into Apple after the 4Q, at least according to Icahn’s twitter account. These purchases exclude activity after the end of the fourth quarter, including two half-billion dollar purchases Mr. Icahn tweeted in late January.

There was also increased exposure in Crown Castle spread across several funds. Crown is an American corporation that provides infrastructure for broadcasting and mobile telephony. The wireless infrastructure firm’s exposure grew in the aggregate fund portfolio by $1.1 billion but no individual fund purchased more than $0.3 billion worth. The company was in the news several times late last year, notably for acquiring the rights to AT&T towers valued at $4.8 billion, issuing positive guidance for fiscal year 2013 and 2014, and for equity and debt issuance. The stock has been said to underperform lately, which is likely what drew in money from the funds.

The financial sector also saw some large purchases, in particular Citigroup and Bank of America. Citi may not have been the best bet. It crumbled in January after some negative news regarding their forex desk and investigations. I wouldn’t be surprised to see some outflows in the next set of 13-F’s.

Hedge funds also took a liking to IPO’s, including the most popular of the fourth quarter, Twitter. Both Lansdowne Partners and Gilder, Gagnon, Howe & Co. were two of the three largest hedge fund owners with positions in the stock. Neither of those firms were in Twitter’s top ten shareholders overall as of the end of the 4Q. Factset’s data showed that the two firms hold nearly $350 million in the stock, which amounts to 60% of the top 50 hedge funds’ overall position but only 1.1% of Twitter’s total shares outstanding.

So which companies saw hedge funds lowering their exposure? The report shows that several individual funds sold large interests in several equities in Q4. First, Apollo Capital Management completed its liquidation of LyondellBasell Industries in a sale that represented approximately $2.4 billion. Then Coatue Management and Lone Pine Capital liquidated their stakes that totaled more than $1 billion in Equinix, which is a provider of network-neutral data center and colocation services.

 

Monday Morning News – All Eyes On Ukraine

Mar 3, 2014   //   by Profitly   //   Market, News  //  Comments Off on Monday Morning News – All Eyes On Ukraine

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All eyes are on Ukraine (CNN)

Fannie Mae’s profits may not be a long term thing (WSJ)

Muni bonds are back in favor (WSJ)

Winter storm misses New York but crushes the nation’s capital (Bloomberg)

Warren Buffet’s bet on a rising economy pays off (WSJ)

All eyes are on Putin even after the Olympics (Bloomberg)

Citigroup is off to a horrible start in 2014 (WSJ)

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