There are over 8,000 hedge funds in existence today, but just an elite group is worth paying attention to. At Insider Monkey, we track nearly 600 of the world’s best money managers and our research shows that their best stock picks can beat the market significantly over the long run.
With that in mind, it’s important to understand that many hedge fund managers tweak their equity portfolios fairly frequently, and some transactions are market moving. Let’s run through some of the biggest trades of the past week.
Long-term activist Jeff Ubben and ValueAct Capital cut a sizable chunk of his Adobe Systems Incorporated (NASDAQ:ADBE) position on Friday, selling about 2.5 million shares in three separate transactions at an average price of $52.10 apiece. After owning 31.3 million shares of the application software company in his last 13F filing, Ubben now owns a little over 28 million shares worth $1.5 billion—about 5.7% of the company. Adobe shares are up 58% since ValueAct first reported a stake in early 2011.
Mega-hedge fund Tiger Global, meanwhile, doubled its position in the London-based BBA Aviation plc (LON:BBA). Billionaire Chase Coleman and Feroz Dewan now own over 11% of BBA’s outstanding shares, and the aviation services small-cap is up 43.5% year-to-date. A dividend yield near 3% is attractive, but we think Tiger Global’s here for the growth—Wall Street expects earnings to grow by 10% next year—at a reasonable valuation. Don’t discount the possibility of a BBA merger either. The company ended strategic talks with Dubai Aerospace Enterprise last month but it’s possible that BBA is open to another option down the road.
Barry Rosenstein’s Jana Partners revealed it now holds 11.7% of Oil States International, Inc. (NYSE:OIS), a slight increase from its last 13F filing. In addition to being a solid long-term play on domestic oil and gas, Jana’s activism has successfully led to plans for a spinoff of Oil States’ accommodations business. Most analysts expect the split to be completed by April or May of next year, but it’s unknown if a real estate investment trust conversion will be in play. Jana and David Einhorn have reportedly pushed for an accommodations-focused REIT; Einhorn holds about half the number of Oil States shares as his activist peer.
Another billionaire, Mario Gabelli and Gamco shared that they now hold a 4.1% passive stake in Lennar Corporation (NYSE:LEN), the third largest homebuilder in the U.S. Gabelli typically goes for cheap stocks in secularly bullish industries and this case is no different. Lennar should benefit from its executive planned estate and apartment rental businesses, both of which are expected to generate a significant portion of the company’s growth over the next half-decade.
In a similar light, Ricky Sandler’s Eminence Capital now owns a significant chunk of Group 1 Automotive, Inc. (NYSE:GPI) in a passive stake reported on Tuesday. This is a new position for Sandler and crew, and shares of the car dealership operator were up slightly last week on the news.
Steve Cohen and SAC Capital, lastly, now own over 5% over Arrowhead Research Corp (NASDAQ:ARWR), a bio-therapeutics company that specializes in nanomedicine. Wayne Holman’s Ridgeback Capital also followed Cohen into Arrowhead last week and biotech guru Peter Kolchinsky is long, so we’ll be watching this stock closely.
Disclosure: none
