Duquesne Family Office Goes On a Buying Spree

Now that all hedge funds have released their latest 13F filings, Warren Buffett‘s $1 billion bet on Apple Inc. (NASDAQ:AAPL) has been the main headline. While you should definitely keep track of Buffett’s moves, make sure you take into consideration what Stanley Druckenmiller is doing, especially since the man is a legend of the investment world and has managed an average yearly return of 30% with no down-year during his career. Druckenmiller is now officially retired, but he still manages his own fortune through his family office – Duquesne Capital. Despite the fact that he was very critical of the current status of the economy and the stock market at a recent conference, where he urged investors to sell out of their positions and pile into gold, during the first quarter Druckenmiller initiated several new long positions for his fund. In this article we’ll take a look at the top 5 largest new bets reported in Duquesne’s latest 13F filing.

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Bet On Fizzi Drinks

First up is PepsiCo, Inc. (NYSE:PEP). Over the course of the first quarter, Druckenmiller and his team acquired a total of 353,300 shares of the soft drink giant, a position valued at $36.2 million according to the fund’s 13F filing. Jim Simons‘ Renaissance Technologies doubled its investment in PepsiCo, Inc. (NYSE:PEP) during the same period of time to 3.73 million shares valued at $382 million. Activist investor Nelson Peltz, on the other hand, seems to have given up on his efforts to break the company up as his fund, Trian Fund Management, has exited the stock, previously having reported ownership of 18.3 million shares of Pepsi, which made it the third largest position. So far this year, PepsiCo, Inc. (NYSE:PEP)’s stock has inched up by 3% for the year. In the beginning of May, the company announced an increase in its annual dividend to $3.01 per share from $2.81 per share, which gives its stock a yield of 2.94% at the current levels.

Time To Buy Energy Stocks

Duke Energy Corp (NYSE:DUK), one of the largest electric power holding companies in the US, has also found its way into the equity portfolio of Duquesne Capital. In its latest 13F filing, the fund indicated ownership of 649,100 shares worth approximately $52.3 million at the end of the first quarter. Duke Energy Corp (NYSE:DUK) latest earnings report came in below expectations as the management lamented mild weather and winter storm repairs that affected its performance. The company said it had registered revenues of $5.62 billion, down by 7.3% year over year, and adjusted earnings of $1.13 per share, one cent lower than analysts’ consensus. Duke Energy said it is still on track to achieve its 2016 earnings target of $4.50 to $4.70 per share. Stuart J. Zimmer’s Zimmer Partners is also betting big on Duke Energy Corp (NYSE:DUK), having pledged 5.6% of its equity portfolio to this position. According to its latest quarterly report, the fund currently holds 1.66 million shares worth $134 million.

Duquesne Capital has reported another large bet on an energy company: Southern Co (NYSE:SO), one of the largest utility companies in the United States. The fund’s stake in the company amounts to 1.02 million shares reportedly worth $52.6 million at the end of March. John W. Rogers‘ Ariel Investments has reduced its investment in Southern Co (NYSE:SO) by 3% to some 1.61 million shares valued at $83.5 million. On May 5, the company announced the pricing on its public offering of 18.3 million shares and said it hoped to raise approximately $900 million. Southern Co said it plans to use the proceeds to pay off some of its short term debt and to partially finance its acquisition of AGL Resources Inc. (NYSE:GAS). The two companies agreed to merge in August 2015, with AGL shareholders set to receive $66 per share. Southern Co (NYSE:SO) has recently completed the takeover of PowerSecure International in a deal valued at $425 million. “Today we are thrilled to draw on PowerSecure’s nationally recognized expertise to deliver even greater customer value by developing innovative technologies on the other side of the meter,” said Thomas Fanning, President and CEO of  Southern Co about the acquisition.

Tobacco Still A Good Investment

Is it s good time to buy Philip Morris International Inc. (NYSE:PM) shares? Druckenmiller and his team seem to think so, as they amassed 554,800 shares by the end of the quarter, valued at more than $54.4 million. Natixis Global Asset Management-run, Harris Associates also reported a fresh investment in the tobacco company, having acquired approximately 3.76 million shares worth $369 million at the end of the quarter. Philip Morris International Inc. (NYSE:PM) has recently took a hit in Europe, as the EU’s highest court upheld the union’s strict anti-smoking rules and dismissed the company’s challenge. The 2014 Tobacco Products Directive instated a ban on certain flavors, required larger warning labels and set some limits on electronic cigarettes. Philip Morris International Inc. (NYSE:PM) stock has been a solid performer so far this year and was undeterred by the weak first quarter results. The company posted earnings of $0.98 per shares on the back of $16.08 billion in revenues, below market expectations of $16.28 billion in revenues and earnings of $1.11 per share. The stock ended yesterday’s trading session at $101.71 per share, up by roughly 17% for the year.

More Fizzy Drinks!

The largest new bet reported by Duquesne Capital in its latest 13F filing is The Coca-Cola Co (NYSE:KO). Worth some $64.4 million, the fund’s stake in the beverage corporation amounts to approximately 1.39 million shares. Coca-Cola’s first quarter results were not impressive either, as the beverage giant said it earned $0.34 per share on $10.3 billion in sales, down by 4% year over year. The Coca-Cola Co (NYSE:KO) said its performance was affected by the stronger dollar and by the recent health trends that saw customers shift from fizzy drinks to tea and fruit juice. The stock is currently trading at a P/E multiple of 27, which is almost in line with the industry average of 24. The Coca-Cola Co (NYSE:KO) also pays an annual dividend of $1.34 per share, which represents a yield of 2.10% for the stock. Peter Rathjens, Bruce Clarke And John Campbell‘s fund, Arrowstreet Capital, has also reported a new position in this stock that amounts to 4.44 million shares valued at roughly $206 million.

Disclosure: none