Billionaire Steve Cohen Builds Huge Positions in Alphabet Inc. (GOOGL), Facebook Inc (FB); Ditches Michael Kors Holdings Ltd (KORS)

Billionaire Steve Cohen is the Chairman and CEO of Point72 Asset Management, a family office that has an equity portfolio worth $14.22 billion as of the end of September. The 60-year old hedge fund manager is a passout from Wharton School of the University of Pennsylvania. Before launching Point72, Mr. Cohen had founded SAC Capital in 1992 which was closed down as a result of the biggest insider trading scandal in history that resulted in Cohen paying $1.8 billion as penalties. This did not stop Steve Cohen from pursuing his investment career and he reorganized his firm into a family office. Point72’s mission is to deliver superior risk-adjusted returns having large allocations to consumer discretionary, healthcare and energy sectors. Let us have a look at some of Cohen’s moves during the latest quarter.

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Alphabet Inc (NASDAQ:GOOGL) represents the third-largest holding in Point72 Asset Management’s equity portfolio, as the fund initiated a stake during the third quarter and reported ownership of 419,288 class A shares worth $337.13 million in its latest 13F filing. The stock is trading close to flat year-to-date. There are some fears regarding large technology stocks coming under pressure from the new Trump administration. To make matters worse for the company, its drone delivery deal with Starbucks Corporation (NASDAQ:SBUX) also did not materialize. Aside from Point72 Asset Management, other investors bullish on Alphabet include Andreas Halvorsen’s Viking Global, Mason Hawkins’ Southeastern Asset Management, Ken Fisher’s Fisher Asset Management, and Stephen Mandel’s Lone Pine Capital.

Facebook Inc (NASDAQ:FB) saw Steve Cohen’s fund boost its position by 487% to 2.44 million shares worth $312.90 million during the third quarter. Facebook’s stock is trading very close to its 52 week average price and has returned more than 200% over the last five years. Following the presidential elections, Facebook has been criticized about the way it disseminates news. However, the company’s third-quarter performance has been exceptionally good, as it reported $7 billion in revenues beating analyst estimates of $6.9 billion, while its EPS of $1.09 was higher than the expected $0.97. Nevertheless, even though the company’s revenue surged by 56% on the year, investors are concerned about the future revenue growth.

Amazon.com Inc (NASDAQ:AMZN) ranks on the sixth spot in Point72’s equity portfolio, after the fund cut its stake by 60% during the third quarter and disclosed holding 66,688 shares worth $223 million as of the end of September. Amazon is the world’s largest online marketplace that operates through its three segments: North America, International and Amazon Web Services (AWS). The company’s  stock has gained 10% year-to-date and analysts on average recommend it as a ‘Buy’. Amazon.com Inc (NASDAQ:AMZN) has ‘shocked’ investors with its third-quarter results, which included EPS of $0.52 missing the consensus estimate by $0.26. However, its revenue of $32.70 billion was $10 million above expectations. About 145 hedge funds that we track held $19.8 billion worth of Amazon shares at the end of June.

In Bunge Ltd (NYSE:BG), a company engaged in providing agribusiness and food related services, Point72 held 2.9 million shares worth $171 million at the end of September, after having added 2.72 million shares during the third quarter. For the third quarter, Bunge posted revenue of $11.42 billion, beating the consensus estimate by $1.11 billion, while its EPS of $0.73, missed the expectations by $0.08. The company’s third quarter profits were hit by lower soybean and corn production in South America, but Bunge Ltd (NYSE:BG) expects a better fourth quarter driven by record US corn and soybean harvest. Another shareholder of Bunge Ltd (NYSE:BG) is Clint Carlson’s Carlson Capital, which owned 3.06 million shares of the company at the end of September.

On the other hand, Point72 Asset Management unloaded its entire position in Michael Kors Holdings Ltd (NYSE:KORS), having previously owned 1.94 million shares at the end of June. Michael Kors’ shares have appreciated by some 20% year-to-date and are trading at around 11 times earnings. Among analysts that are covering the stock, 20 have set a ‘Hold’ rating on it and one analyst rates it as a ‘Sell’. The company’s profits might be affected from “continuation of soft traffic trends” as per its executive. Global geopolitical issues, Brexit, foreign currency fluctuations etc. are headwinds for the company. In addition to Steve Cohen, another investor that likes Michael Kors Holdings Ltd (NYSE:KORS) is Cliff Asness of AQR Capital Management, which owns 3.90 million shares of the company, according to its latest 13F filing.

Disclosure: none