We don’t know the exact details of Einhorn’s short Amazon thesis, but we know that it is based on valuation. “Analysts strain to justify ever high prices” for Amazon he said in his annual investor conference back in January. However, he also disclosed that this short position dragged down his fund’s performance 1.3 percentage points in 2015. With all of this in mind, we’re going to view the key action regarding Amazon.com, Inc. (NASDAQ:AMZN).
Hedge fund activity in Amazon.com, Inc. (NASDAQ:AMZN)
Heading into 2016, a total of 141 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Chase Coleman’s Tiger Global Management has the most valuable position in Amazon.com, Inc. (NASDAQ:AMZN), worth close to $2.1585 billion, corresponding to 17.4% of its total 13F portfolio. The second largest stake is held by Viking Global, led by another Tuger cub Andreas Halvorsen, holding a $1.7353 billion position; the fund has 6.5% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism encompass Ken Fisher’s Fisher Asset Management, Stephen Mandel’s Lone Pine Capital and Lansdowne Partners.
As one would reasonably expect, key hedge funds have jumped into Amazon.com, Inc. (NASDAQ:AMZN) headfirst. Immersion Capital, managed by Michael Sidhom, initiated the most outsized position in Amazon.com, Inc. (NASDAQ:AMZN). Immersion Capital had $159.7 million invested in the company at the end of the quarter. Eric Mindich’s Eton Park Capital also made a $135.2 million investment in the stock during the quarter. The other funds with brand new AMZN positions are James Dinan’s York Capital Management, James Crichton’s Hitchwood Capital Management, and Christopher James’s Partner Fund Management.
Let’s go over hedge fund activity in other stocks similar to Amazon.com, Inc. (NASDAQ:AMZN). These stocks are General Electric Company (NYSE:GE), Facebook Inc (NASDAQ:FB), Johnson & Johnson (NYSE:JNJ), and Wells Fargo & Co (NYSE:WFC). All of these stocks’ market caps are similar to AMZN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GE | 54 | 5733200 | -20 |
| FB | 146 | 10795716 | 18 |
| JNJ | 72 | 4162781 | -2 |
| WFC | 85 | 32556760 | 0 |
As you can see these stocks had an average of 89.25 hedge funds with bullish positions and the average amount invested in these stocks was $13.3 billion. That figure was $17.3 billion in AMZN’s case. Facebook Inc (NASDAQ:FB) is the most popular stock in this table. On the other hand General Electric Company (NYSE:GE) is the least popular one with only 54 bullish hedge fund positions. Amazon.com, Inc. (NASDAQ:AMZN) is not the most popular stock in this group but hedge fund interest is still extremely high. We should note that hedge funds’ consensus large-cap picks generated an annual alpha of 2 percentage points in our backtests. This means Amazon has better than 50% chance to outperform the market in the next 3 months. If you aren’t too worried about the volatility, you should consider it at least as a short-term long play.
