Billionaire Louis Bacon Bets Big on Finance, Amazon.com, Inc. (AMZN)

Louis Bacon founded Moore Global Investments in 1989 and has been running the fund ever since. Moore Global employs a global macroeconomic approach to investment and manages more than $50 billion worth of assets. At the end of the second quarter, the fund held $2.55 billion worth of investments in public equity, with nearly half of that in the financial sector. Louis Bacon and his team have made a big shift towards financial stocks, as part of a major portfolio overhaul. Four of the fund’s 5 largest equity bets comprise major players in the financial sector.

At Insider Monkey, we measure a hedge fund’s performance by calculating the weighted average returns of each fund’s long stock positions in companies with over $1 billion in market cap. According to this metric, Louis Bacon’s Moore Global managed a 3.6% return from 149 positions that qualify under our rule. So let’s have a look at how Mr. Bacon shaped up his portfolio in a bid to boost his fund’s performance.

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Dividend Is Golden

US banking giant JPMorgan Chase & Co. (NYSE:JPM) has found itself among Moore Global Investments’ top five equity positions at the end of June. During the second quarter, the fund acquired 925,000 shares reportedly worth $57.5 million. Hedge fund interest towards JPMorgan Chase & Co. (NYSE:JPM) was slightly up at the end of June, compared to the end of March, as the number of funds from our database invested in the stock rose by two to 99.  Lansdowne Partners is also betting big on this stock, as it held 23.5 million shares worth $1.46 billion. JPMorgan Chase & Co. (NYSE:JPM) pays an annual dividend of $1.92 per share, providing investors with a 2.84% yield, which is one of the highest among banking companies. The stock is currently trading at a trailing Price to Earnings (P/E) multiple of 11, lower than the industry average of 16. JPMorgan Chase & Co’s earnings multiple is also the smallest among the stocks that form the Dow Jones Industrial Average Index.

Still Bullish On Fidelity National Information Services

Fidelity National Information Services Inc (NYSE:FIS) is still a major position in the fund’s portfolio, as Bacon and his team have slightly increased it during the quarter. According to its latest 13F filing, Moore Global held 825,132 shares worth $60.8 million at the end of June. At the end of the second quarter, roughly 12.5% of Fidelity National Information Services Inc (NYSE:FIS)’s common stock was held by 47 of the funds followed by Insider Monkey, down from 49 a quarter earlier. Billionaire Ken Griffin is also optimistic about the prospects of this company, as his fund, Citadel Investment Group, had its stake increased by 4470% to 5.25 million shares valued at $386 million. Last year, Fidelity National Information acquired SunGuard, one of its competitors, for $9.1 billion in a bid to spur growth. Fidelity National Information Services Inc (NYSE:FIS) also saw its debt load balloon to more than $11 billion and the management has decided to focus on reducing the debt level, with analysts expecting it to shed roughly $1.2 billion worth of debt by the end of 2017.

Big Bet On Citigroup

Louis Bacon and his team have also placed a big new bet on Citigroup Inc (NYSE:C). Over the course of the second quarter, Moore Global amassed a little over 1.5 million shares reportedly worth $63.6 million. Analysts are also bullish on Citigroup Inc (NYSE:C). Of the 24 analysts polled by Yahoo! Finance, eight recommend the stock as a ‘Strong Buy’ and 15 see it as a ‘Buy’, with an average price target of $54 per share. This implies an upside potential of 13% given Thursday’s closing price of $47.36 per share. The company has a market cap of $138 billion and pays an annual dividend of $0.31 per share, which provides investors with a 0.65% yield. Hedge fund sentiment towards Citigroup Inc (NYSE:C) cooled down a bit during the quarter, as the number of long hedge fund positions fell to 97 from 101 registered at the end of March. Harris Associates, owned by Natixis Global Asset Management, held the largest stake in the company, having indicated ownership of 28.3 million shares worth $1.2 billion in its latest 13F filing.

Analysts Like BofA Too

Having liquidated his prior investment in Bank of America Corp (NYSE:BAC) during the first quarter, Louis Bacon has changed his mind and has bought back most of the shares he had dumped. According to its latest regulatory filing, Moore Global held 5.0 million shares of Bank of America, a position valued at $66.3 million. So far this year, Bank of America Corp (NYSE:BAC) has been slowly crawling back after the strong sell-off that started in December, 2015. Shares are currently trading at $16 apiece, down by 2.7% year-to-date. With the Federal Reserve looking more and more likely to increase interest rates in the near future, investors have grown optimistic about banking stocks, pushing BofA up by 11% in August alone. Analysts at Robert W. Baird have recently upgraded the stock to ‘Outperform’ from ‘Buy’, while Goldman Sachs has reiterated its ‘Conviction-Buy’ rating and the $17 price target. At the end of June, Bank of America Corp (NYSE:BAC) could be found in the equity portfolio of 102 of the funds tracked by Insider Monkey, down from 110 a quarter before. Billionaire Ken Fisher is also betting big on BofA, with his fund, Fisher Asset Management, holding 43.3 million shares, up by 1% during the quarter.

Hedge Funds Just Love Amazon

Louis Bacon has replaced Alphabet Inc (NASDAQ:GOOGL) with Amazon.com, Inc. (NASDAQ:AMZN) as his number one bet. Moore Global had its stake in the e-commerce giant increased by 69% to 133,126 shares worth $95.2 million at the end of the quarter. Amazon.com, Inc. (NASDAQ:AMZN) was the third most popular stock among the funds in our database at the end of the quarter, with 145 of them having reported a long position, up from 133 recorded at the end of the previous quarter. Andreas Halvorsen’s Viking Global also has a sizable stake in Amazon, having reported ownership of 3.28 million shares in its latest 13F filing, down 5% from the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) has announced today a partnership with South Korea’s LG Electronics to integrate Amazon’s virtual assistant Alexa with its electrical appliances, allowing users to control them via voice-recognition technology. In exchange, LG will add Amazon’s Dash technology to its devices, which will help users order household items more easily.

Disclosure: none.