28 Hedge Funds That Are Getting Destroyed By These 25 Stocks

Everybody is talking about Bill Ackman’s nearly $2 billion losses in Valeant (VRX). Valeant isn’t the only stock that is costing hedge funds billions. Actually we identified 25 stocks that collectively costed hedge funds a total of $52 billion since the end of June. You can check out the list of these stocks by clicking this link. We identified 125 hedge funds and prominent investors who were among the top 5 holders of these stocks in our database. Since these stocks were among the worst performing stocks recently, some of the hedge funds with large exposures to these stocks will probably report discouraging results over the next few weeks. Media already pounced on Bill Ackman and David Einhorn. Our calculations show that they only owned 2 of the 25 worst performing stocks for hedge funds. One billionaire hedge fund manager had large positions in 9 of these 25 stocks and we are the first financial news site breaking this story. Even Warren Buffett had 3 of these 25 stocks in his portfolio, so Ackman isn’t doing as bad as you think.

Let’s share opinion on the terrible short-term performance of these stocks and hedge funds. These results are absolutely expected. When you cherry pick your stocks, you can always come up with a list of stocks that underperform or outperform by a large margin. Hedge funds follow a certain investment style and sometimes their style falls out of favor and they underperform. Stock picking means you are taking certain risks. Risk taking occasionally leads to large losses. The mysterious hedge fund manager who had large positions in 9 out of the 25 worst performing stocks for hedge funds delivered net annualized returns of 17% through the end of 2014. He outperformed the S&P 500 Index by more than 10 percentage points annually. Anyone can beat the market by a large margin or underperform it by a large margin in the short-term. We are more interested in superior average returns over the long-term. That’s why we don’t think these losses aren’t a big deal, other than the fact that it will cost these hedge funds a total of more than $10 billion in lost incentive fees.

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28. Dan Loeb – Third Point:  Top 5 positions in AGN and SUNE. Check out his portfolio by clicking the link.

27. Jeffrey Tannenbaum – Fir Tree: Top 5 positions in MYL and SUNE. You can check out his portfolio and portfolio history by clicking the link.

26. Keith Meister – Corvex Capital: Top 5 positions in WMB and PAH.

25. John Griffin – Blue Ridge Capital: Top 5 positions in ENDP and PAH. You can check out this billionaire’s stock picks and history by clicking the link too (we won’t repeat this again).

24. Bill Ackman – Pershing Square: Top 5 positions in VRX and PAH.

23. William Gray – Orbis Investment Management: Top 5 positions in BIDU and LBTYK.

22. Phill Gross and Robert Atchinson – Adage Capital: Top 5 positions in BIIB and IBM.

21. First Eagle: Top 5 positions in LBTYK and TWX

20. David Einhorn – Greenlight Capital: Top 5 positions in SUNE and TWX. We just published three articles sharing highlights from Greenlight Capital’s 2015 Q3 investor letter. Einhorn discusses his latest views on SUNE which lost nearly 75% of its value over the last 3.5 months. Here are the articles: part 1, part 2, part 3. Greenlight Capital lost more than 17% through the end of September. Einhorn shares in his investor letter than he cut his fund’s net exposure by 30 percentage points which might explain some of the selling pressure on some of these stocks. Since these stocks are heavily owned by hedge funds, the large short term losses may be temporary in nature if several hedge funds were trying to sell at the same time. Anyway, read our articles to find out Einhorn’s new stock picks as well as latest views about the markets.

19. Barry Rosenstein – Jana Partners: Top 5 positions in BKD and TWX.

18. Richard Perry – Perry Capital: Top 5 positions in WMB and CYH.

17. Richard Pzena – Pzena Investment Management: Top 5 positions in WMT and GS.

16. Boykin Curry- Eagle Capital Management: Top 5 positions in GS and LBTYK

15. Eric Mandelblatt – Soroban Capital Partners: Top 5 positions in WMB and CBS.

14. Jonathon Jacobson – Highfields Capital Management: Top 5 positions in PRGO and CBS.

13. Jacob Gottlieb – Visium Asset Management: Top 5 positions in PRGO and ENDP.

12. Matthew Halbower – Pentwater Capital Management: Top 5 positions in MYL and PRGO.

11. James Dinan – York Capital Management: Top 5 positions in MYL and PRGO.

10. David Shaw – D.E. Shaw: Top 5 positions in YHOO, IBM, and LBTYK.

9. Philippe Laffont – Coatue Management: Top 5 positions in JD, TWX, and ILMN.

8. Warren Buffett: Top 5 positions in WMT, IBM, GS

7. Zach Schreiber – Point State Capital: Top 5 positions in WLL, ABBV, and LNG.

6. Samuel Isaly – Orbimed Advisors: Top 5 positions in CYH, BIIB, HCA, ILMN, and ABBV. We just did an in-depth analysis of OrbiMed’s historical 13F filings. The results look good on the surface. An investor who replicated OrbiMed’s 13F positions with a 2 month delay would have generated an average monthly return of 1.27% between 1999 and 2012. S&P 500 Index delivered an average monthly return of 0.32% during the same period. However, healthcare stocks in general performed well during this period. OrbiMed’s smaller cap stock picks historically performed better than large cap stock picks. If you follow OrbiMed, you will get real-time email alerts as soon as we publish a new article on this healthcare hedge fund.

5. Andreas Halvorsen – Viking Global: Top 5 positions in LNG, AGN, WLL, BIIB, and ILMN.

4. John Paulson – Paulson & Co: Top 5 positions in MYL, AGN, VRX, HCA, and WLL.

3. Daniel Och – OZ Management: Top 5 positions in PRGO, BKD, TWX, YHOO, PAH, ENDP, and AGN.

2. Larry Robbins – Glenview Capital: Top 5 positions in CBS, CYH, BKD, HCA, ENDP, ABBV, and SUNE.

1. Stephen Mandel – Lone Pine Capital: Top 5 positions in HCA, ILMN, ENDP, JD, LNG, WMB, AGN, SUNE, and VRX.