With the latest round of 13F filings in the books, hedge funds’ moves relating to different stocks and sectors during the second quarter are now available to those with the data at their disposal. Instead of just presenting the raw data, Insider Monkey further analyzes different trends exhibited by these elite funds during the period. In some of our previous articles, we’ve looked into hedge funds’ most popular stocks, among others, providing great insight for existing or aspiring investors. In this article, we look at some of the large-cap stocks whose shares are being hoarded by hedge funds. These are Air Products & Chemicals, Inc. (NYSE:APD), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), JD.Com Inc(ADR) (NASDAQ:JD), Williams Companies Inc (NYSE:WMB), and Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK).
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We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 118% since then and outperformed the S&P 500 Index by around 60 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
First, let’s have a look at Air Products & Chemicals, Inc. (NYSE:APD), the Allentown, Pennsylvania-based supplier of chemicals and gases for industrial uses. The funds tracked by Insider Monkey that were invested in the stock at the end of the second quarter owned 29.40% of the company’s common stock, more than they did of any other large-cap company. Out of the funds that we track, only two out of the top ten shareholders of the stock reduced their positions. In aggregate, however, the number of funds that were invested in the stock was reduced to 76 from 83. The same was seen in the aggregate value of their investments, dropping by 13.07% to $8.64 billion. During the second quarter, the shares of Air Products & Chemicals, Inc. (NYSE:APD) lost 5.85%. The company recently reported better-than-expected earnings and has provided optimistic guidance for the current quarter, owing to its measures to cut down on costs, which included cutting jobs. At the end of the second quarter, Pershing Square, led by billionaire Bill Ackman, was one of the funds that chose to hoard shares of the company, 20.55 million of them in all, valued at $2.81 billion at the end of the quarter.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is another large-cap stock whose shares many hedge funds in our database held at the end of the second quarter. Although a few hedge funds sold their positions in the stock, many funds increased their stakes. At the end of the second quarter, a total of 98 hedge funds we track were invested in the stock, down from 104 at the end of the first quarter. The 98 hedge funds held 29.10% of the company’s common stock at the end of the second quarter. In spite of the drop in hedge fund owners, aggregate investment value was up to $22.02 billion, an increase of $1.91 billion. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) recently announced a plan to acquire Sprout Pharmaceuticals Inc through one of its subsidiaries. If it goes through, the acquisition will be a great addition to Valeant’s portfolio, coming at a time when the U.S. Food and Drug Administration (FDA) has now approved Sprout’s New Drug Application (NDA) for Addyi, which is used for boosting libido. At the end of the second quarter, billionaire Ackman’s Pershing Square was again the biggest shareholder out of the funds we track. It held a stake of 19.47 million shares valued at $4.33 billion. Other notable shareholders include Jeffrey Ubben‘s ValueAct Capital and John Paulson’s Paulson & Co.
Let’s now move to JD.Com Inc(ADR) (NASDAQ:JD). Out of the 730 actively reporting hedge funds tracked by Insider Monkey, 75 were long in the stock at the end of the second quarter, with the funds owning 25.30% of the company’s shares. The aggregate investment value in the Chinese electronic commerce company by these funds was also up by 43.59% during the quarter to $11.81 billion. The bullish stance by hedge funds on JD.Com Inc (ADR) (NASDAQ:JD) was quite predictive of the stock’s performance in the second quarter, having gained 16.07%. The company is facing stiff competition from China’s largest e-commerce website, Alibaba Group Holding Ltd (NYSE:BABA), which invested in Suning Commerce Group Co Ltd, which is JD.Com’s rival. JD.Com Inc is also facing challenges due to the general slowdown in the Chinese market. At the end of the second quarter, billionaire Lei Zhang’s Hillhouse Capital Management emerged as the biggest shareholder of the company in our database, holding 142.95 million shares valued at $4.87 billion.
Hedge funds were quite bullish on Williams Companies Inc (NYSE:WMB) during the second quarter of 2015. The quarter saw the number of hedge funds invested in the stock increase to 86 from just 60. Their aggregate ownership represented 24.80% of the company’s shares. Most of the funds chose to increase their positions in the stock, while others created new positions, increasing the aggregate hedge fund investment in the stock by 60.68% to $10.64 billion. Out of the top ten shareholders that we track, only three reduced their positions in Williams Companies Inc (NYSE:WMB). The second quarter saw the shares of the Tulsa, Oklahoma-based energy company gain 14.67%. The company has been reviewing its activities, leading to strong earnings results for its most recent reporting period. This was particularly so because of its growing supply of fee-based cash flow, a move that cushions it against commodity prices. The company recently rejected a merger proposal from Energy Transfer Equity (NYSE:ETE), although the books are still open for the company and any other possible suitors, with Spectra Energy Corp. (NYSE:SE) being among them. Out of the hedge funds tracked by Insider Monkey, Corvex Capital, headed by Keith Meister, emerged as the biggest shareholder, with 41.68 million shares valued at $2.39 billion.
To conclude, let’s now look at Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK), the London-based telecommunications and television company. Of the hedge funds monitored by Insider Monkey, 88 of them had long positions in the stock as of June 30, down from 90 at the beginning of the quarter. Similarly, the funds’ aggregate investment was also down to $9.67 billion from $10.14 billion at the beginning of the quarter. Nonetheless, the aggregate ownership of these funds represented 21.70% of the company’s shares. The moves made by these hedge funds in the stock were not overly significant, which is also reflective of the stock’s performance during the second quarter, having gained just 1.65%. Year-to-date however, Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK) is down by 6.33%, mainly being impacted by the stock’s 10.63% loss in share price since the beginning of July. The company recently acquired 138.7 million shares of ITV plc, a London-based media company, boosting its stake in the company to 398.5 million shares, equivalent to an approximate 9.9% of ITV plc’s ordinary shares. Boykin Curry‘s Eagle Capital Management emerged as the biggest shareholder of Liberty Global at the end of the second quarter, owning 30.16 million shares valued at $1.53 billion.
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