In a 13F Form filed with the U.S. Securities and Exchange Commission, Paul Singer’s Elliott Management revealed its top picks for the fourth quarter. The largest position in the fund’s equity portfolio was its stake in Hess Corp. (NYSE:HES), which amounted to 17.80 million shares at the end of the year, with them since adding another 1.0 million shares to that total. The hedge fund’s other big bets at the close of the year included EMC Corporation (NYSE:EMC), Juniper Networks, Inc. (NYSE:JNPR), and Family Dollar Stores, Inc. (NYSE:FDO).
Elliott Management is a New York City-based hedge fund that was founded by Paul Singer in 1977. The firm has been operating successfully for almost four decades and has been under Mr. Singer’s continuous management since it was launched. Elliott Management, along with Elliott International, are part of a larger entity called Elliott Management Corporation, which has around $15 billion in assets under management and caters to a wide range of institutional and wealthy investors. According to its latest 13F filing, Mr. Singer’s fund has an equity portfolio valued at $9.59 billion, with around 36% of its holdings belonging to companies active in the energy sector.
Hess Corp. (NYSE:HES) was Elliott Management’s top pick last quarter, accounting for 13.7% of the fund’s total holdings. The investment firm has been betting big on this stock for quite some time now, as it has been amongst its top positions since 2013. Despite gaining almost 62% in 2013, share prices struggled last year, losing around 11%, after plummeting in October. In addition to the news of the company’s President and COO, E&P P. Gregory Hill unloading 3,800 shares at the end of the year, and another 20,650 shares last week, numerous Wall Street analysts claim the company will underperform this quarter. Nevertheless, Hess Corp. (NYSE:HES) seems to be one of Elliott Management’s long-term bets, and this quarter, the fund increased its stake in the company further. Whereas the firm disclosed ownership of 17.80 million shares at the end of the fourth quarter, its current holding in the company amounts to 18.80 million shares.
With a stake of 33.5 million shares of common stock, EMC Corporation (NYSE:EMC) ranks as the second largest position in Elliott Management’s equity portfolio. The investment firm acquired a huge activist stake in the company during the third quarter and sent a letter to the board of directors recommending ways to enhance shareholder value. In the letter, the hedge fund suggested that a great deal of value was obscured by EMC Corporation (NYSE:EMC)’s so-called Federation structure. One of the ideas pushed by Elliott Management included the company spinning-off its virtualization software unit, VMware, Inc (NYSE:VMW), in which it holds an 80% stake. According to Mr. Singer’s fund, by taking such measures management would be taking a step in the right direction, towards recognizing the company’s enormous value.
In addition to seeing share prices grow 18.9% last year, EMC Corporation enjoys the backing of Kenneth Mario Garschina’s Mason Capital Management. This investment firm increased its exposure to the stock by 88% last quarter and now owns 15.36 million shares, despite slashing many of its positions and cutting the value of its equity portfolio by more than 55%, showing a clear bullishness on this particular stock.
Elliott Management also held Juniper Networks, Inc. (NYSE:JNPR) amongst its top picks last quarter, disclosing a position of 39.24 million shares. During the fourth quarter, the hedge fund increased its stake in the company by just under 1.57 million shares overall. Furthermore, although share prices remained practically stagnant last year, the stock has gained around 7.5% year-to-date. Yet while the stock is not favored by all investors, Mr. Singer’s firm remains optimistic, holding the spot as Juniper Networks, Inc. (NYSE:JNPR)’s largest institutional investor. In addition to Elliott Management, this equity is also favored by Ric Dillon’s Diamond Hill Capital, which held a position of 8.45 million shares as of the end of the year.
Finally, Mr. Singer’s fund was also bullish regarding Family Dollar Stores Inc. (FDO) last quarter, revealing a stake of 8.10 million shares. Considering the fund held 3.29 million shares at the end of the third quarter, this represents a 145% increase in its exposure to the company. The optimism displayed by Elliott Management towards this stock was shared by numerous institutional investors last quarter, including Nelson Peltz’ Trian Partners, which owned 8.36 million shares. However, due to the announced merger with Dollar Tree, Inc. (NASDAQ: DLTR), Trian has since trimmed its exposure by over 6 million shares in order to avoid getting stuck in the middle of a merger arbitrage play. Nevertheless, Family Dollar Stores Inc. (FDO) performance last year was solid, as the stock gained around 21.8% in 2014.
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