Benjamin A. Smith’s Laurion Capital Management recently filed its 13F Form for last quarter with the U.S. Securities and Exchange Commission. Therein, the investment firm disclosed its top picks by the end of 2014. Its largest holding – excluding stock options and ETFs – was in Apple Inc. (NASDAQ:AAPL), with a stake of 1.74 million common shares. The fund’s other biggest bets for last year included Visa Inc (NYSE:V) and Actavis plc (NYSE:ACT).
Laurion Capital Management is a New York-based hedge fund, launched in 2005 by Benjamin A. Smith and Sheehan Maduraperuma. Previously, these two managers had been employed by JP Morgan, serving as managing director of the equity derivatives division and Vice President, respectively. Mr. Smith’s current investment firm has adopted a multi-disciplinary investment approach, employing a variety of strategies, such as model-based trading and relative value trading. In addition to using a great deal of leverage in its investment programs, Laurion Capital’s trading strategies are generated primarily by computer-driven programs. Furthermore, by relying heavily on quantitative models, the hedge fund’s investment professionals are not granted as much trade-by-trade discretion as in other investment firms. At the end of 2014, Laurion Capital boasted a highly diversified equity portfolio, which was valued at around $4.3 billion.
Excluding its holdings in stock options and ETFs, the New York-based hedge fund revealed Apple Inc. (NASDAQ:AAPL) as its top pick at the end of 2014. At the end of the third quarter, this equity represented 3.9% of the firm’s equity portfolio and since then, the stock has gained more than 24%. Over the past year, Laurion Capital’s top pick performed even better, gaining around 62% since last February. This comes as little surprise, considering the company’s growth over the past years and the reputation is has gained with major hedge funds. In fact, the technology firm enjoys the backing of a wide range of institutional investors, such as Carl Icahn’s Icahn Capital LP, which is the largest shareholder amongst the funds we are tracking. Its position in Apple Inc. (NASDAQ:AAPL) amounts to 52.7 million shares, accounting for approximately 15.8% of this investment firm’s equity portfolio. David E. Shaw’s D E Shaw is also betting big on the technology giant, with a stake of 11.6 million shares. As Apple continues to enjoy the positive sentiments from investors on Wall Street, the stock is viewed by many as a great short-term, as well as long-term play. The only question is how much more growth will share prices experience.
The second largest position in Laurion Capital’s equity portfolio at the end of last quarter was Visa Inc (NYSE:V), with a stake of 306,200 Class A Common Shares. The hedge fund increased its exposure by 25% since the third quarter and has been betting on the company for several years. This seems like a sure bet as a long-term investment, considering share prices grew by 19% over the past year, while the stock has gained more than 220% over a 5 year period. Furthermore, Visa continues to perform better than expected, recently announcing an increase in its quarterly profit and beating the earnings consensus estimate of $2.18 per share by registering an actual EPS of $2.52. Also, in addition to Laurion Capital, the company is backed by numerous institutional investors, such as Ken Fisher’s Asset Management, which owns 3.58 million shares. Andreas Halvorsen’s Viking Global is also betting on Visa Inc (NYSE:V) and holds a stake of 3 million shares of common stock.
Finally, the third equity to make the cut of Laurion Capital’s top picks at the end of 2014 was Actavis plc (NYSE:ACT), with a position of 199,800 shares. Mr. Smith’s fund has been betting on the pharmaceutical company since the third quarter, when it disclosed the purchase of 179,100 shares. Since it revealed entering this new position in its third quarter 13F filing, the company’s share price has gained 14%. Furthermore, while the stock is trading at around $278 per share, the analysts at Citi recently raised Actavis plc (NYSE:ACT)’s price target to $325 per share and continue to maintain their “buy” rating. This new assessment is due to the potential seen in biosimilars, which are being developed by the company in partnership with Amgen, Inc. (NASDAQ:AMGN) and could result in a large increase in revenue.
Disclosure: none.
