Don’t Miss What Segantii Just Bought During Its Crazy Stock Buying Spree

Simon Sadler‘s Segantii Capital Management Ltd. was established in 2007 and is based out of Hong Kong. The fund, which mainly invests in Asia-Pacific equities, uses a multi-strategy investment approach to pinpoint high-potential stocks. A former trader at both Dresdner Kleinwort Benson and Deutsche Bank, Sadler’s own firm has been highly successful since inception, returning 17% annually through March 2016.

As the fund’s assets have swollen thanks to its success, it made a strong push into the U.S market in the third quarter, with the value of its 13F portfolio more than quadrupling during the quarter to $367.81 million. The fund added 60 positions to its 13F portfolio during the quarter, while only unloading 11 holdings. In this article, we’ll take a look at some of the stocks and ETFs that the successful fund was buying in Q3, which included Yahoo Inc. (NASDAQ:YHOO), the Financial Select Sector SPDR Fund (NYSEARCA:XLF), Ryanair Holdings Plc (NASDAQ:RYAAY),  Mobil’nye Telesistemy PAO (ADR) (NYSE:MBT), and the SPDR S&P 500 EFT Trust (NYSEARCA:SPY).

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

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Let’s start with Yahoo Inc. (NASDAQ:YHOO), which Segantii initiated a position in during the third quarter, adding 406,752 shares of the company to its portfolio, valued at $17.31 million on September 30. Verizon appears intent on completing its purchase of Yahoo despite the latter’s disclosure of a massive data breach after the fact. AOL CEO Tim Armstrong recently stated that the deal is more likely to happen than not. Of the hedge funds in our database, 90 funds held $8.27 billion worth of Yahoo shares in their portfolios at the end of the September quarter, equaling 19% of the stock’s float.

Segantii Capital Management also initiated a position in the Financial Select Sector SPDR Fund (NYSEARCA:XLF) during the third quarter. The fund held 530,000 of the ETF’s shares at the end of the quarter, worth $10.09 million, with the position accounting for 2.74% of its 13F portfolio’s value. The ETF invests in financial sector stocks, as its name implies, and Sadler and his team are likely bullish on it at the prospect of it performing better in the future as interest rates rise. Berkshire Hathaway and JP Morgan each account for more than 10% of the ETF’s weighting as of December 6. Among the funds we track, 26 funds held $582.96 million worth of the ETF’s stock in aggregate at the end of September, up from a mere $205.96 million in holdings on June 30.

We’ll check out three more of the fund’s bullish Q3 moves on the next page.

107,899 shares of Ryanair Holdings Plc (NASDAQ:RYAAY) were added to Segantii Capital Management’s portfolio during the September quarter, with the new holding being valued at $7.79 million at the end of the quarter. Ryanair was recently downgraded to ‘Hold’ from ‘Buy’ courtesy of Deutsche Bank, which is bearish on the European airline industry as a whole. However, the position has worked out thus far for Segantii, as RYAAY has gained nearly 10% in the fourth quarter, rebounding to its pre-Brexit stock price. Other hedge funds were also bullish on the stock in Q3, as the number of funds with long positions in it rose to 24 by the end of the quarter from 21 at the start of it.

Segantii Capital Management also initiated a position in Mobil’nye Telesistemy PAO (ADR) (NYSE:MBT) during the September quarter, buying 908,448 shares of the company, worth $7.08 million at the end of September. Both Citi and UBS have recently upgraded the stock to ‘Buy’ from ‘Neutral’, with UBS believing that litigation risk is now fully priced into the stock. The company now trades at a P/E ratio of just 5.33, which is lower than many of its peers. Benjamin A. Smith‘s Laurion Capital Management opened a 2 million-share position in MBT during the third quarter.

Lastly is the SPDR S&P 500 EFT Trust (NYSEARCA:SPY), in which Segantii Capital Management took a position in during the September quarter. The investment firm held 32,000 shares of the SPDR S&P 500 EFT Trust worth $6.87 million as of the end of September. The well-known SPDR S&P 500 EFT Trust is designed to track the performance of the S&P 500 Index as closely as possible. Weightings in top S&P 500 stocks like Apple, Microsoft, and Exxon Mobil are identical to the weighting of those stocks in the actual index. Naturally, the ETF has enjoyed the fruits of the broader market’s recent rally, gaining 2.5% in the fourth quarter. 89 hedge funds that we track hold about $28.19 billion worth of the ETF’s shares as of September 30, making it the most popular ETF among them.

Disclosure: None