Billionaires Rob Citrone and Jim Simons are in harmony as far as the future prospects of Amazon.com, Inc. (NASDAQ:AMZN), Facebook Inc (NASDAQ:FB), Priceline Group Inc (NASDAQ:PCLN), and Horizon Pharma PLC (NASDAQ:HZNP) are concerned. The above companies were added to the portfolios of both Discovery Capital Management and Renaissance Technologies during the first quarter.
Rob Citrone worked as a portfolio manager at Fidelity Investments and Tiger Management before he established Discovery Capital in 1999. The fund’s annualized returns since its inception hover around 17%.
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Simons’ Renaissance Technologies uses high frequency trading to exploit market inefficiencies. The fund charges particularly high fees of 36% for its exceptional returns owing to large transaction costs that go hand-in-hand with its trading strategy.
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Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole. These small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Moreover, since the beginning of forward testing from August 2012, the strategy worked just as our research predicted, outperforming the market every year and returning 144% over the last 32 months, which is more than 84 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
While Simons acquired some 1.15 million shares of Amazon.com, Inc. (NASDAQ:AMZN) valued at $428.98 million during the first quarter, Citrone initiated his own long position of 240,800 shares in addition to a call position on 500,000 shares of Amazon.com, Inc. (NASDAQ:AMZN) worth about $89.60 million and $186.05 million respectively. The $200.98 billion e-commerce giant is up by a staggering 39.1% year-to-date. Amazon has been under scrutiny for avoiding taxes in European countries by funneling its sales through low-tax Luxembourg. The company has given in to the pressure and has started booking revenue in individual European countries starting on May 1. Other prominent stockholders of Amazon.com, Inc. (NASDAQ:AMZN) are Ken Fisher‘s Fisher Asset Management and Boykin Curry’s Eagle Capital Management with 2.47 million and 2.23 million shares respectively.
A total of 2.65 million shares of Facebook Inc (NASDAQ:FB) valued at $217.60 million were acquired by Jim Simons’ fund during the first quarter. Citrone’s bet on the company amounted to 686,000 shares valued at $56.40 million. Facebook Inc (NASDAQ:FB)’s stock is up by nearly 25% over the past year. Monthly active users for the company’s social media platform stand at 1.44 billion with mobile accounting for 73% of the company’s ad revenues according to its first quarter financial results. Facebook also reached a new milestone in terms of daily video views for the quarter, which reached four billion. Stephen Mandel’s Lone Pine Capital is the largest stockholder of Facebook Inc (NASDAQ:FB) within our database, with 8.11 million shares valued at $666.51 million.
Priceline Group Inc (NASDAQ:PCLN) is another new holding of both billionaire managers, with Renaissance Technologies now owning 135,200 shares valued at $157.40 million. Citrone meanwhile acquired some 55,800 shares of his own valued at $64.94 million. Although the $60.69 billion online travel company beat the top and bottom line estimates for its first quarter financial results, Priceline Group Inc (NASDAQ:PCLN)’s stock is only up by a modest 2.7% year-to-date. The main reason for this is a rather conservative guidance provided by its management for the next quarter. Lone Pine Capital is the largest stockholder of Priceline Group Inc (NASDAQ:PCLN) as well, with 1.33 million shares valued at $1.55 billion at the end of March.
On the healthcare front, both funds have added Horizon Pharma PLC (NASDAQ:HZNP) to their portfolios. Renaissance initiated a position in the company of nearly 359,400 shares valued at $9.33 million, while Discovery Capital’s new stake amounted to 237,000 shares valued at $6.16 million. Horizon Pharma PLC (NASDAQ:HZNP)’s stock is up by more than 150% so far this year, while Leerink Swank recently initiated coverage on it with an ‘Outperform’ rating and a price target of $37, which offers about 16% upside to the current trading levels. James E. Flynn’s Deerfield Management holds about 12.79 million shares of Horizon Pharma PLC (NASDAQ:HZNP) valued at $332.23 million.
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