While the S&P 500 has slowed down this year after a sizzling three-year run, it seems that Jason Karp‘s Tourbillon Capital Partners and its 40 picks with a market cap of over $1 billion are not faltering in the least. Our extensive database and analytical tools, which covers over 700 of the most prominent hedge fund managers, says that Jason Karp’s above-mentioned positions could have made someone 9.16% in the second quarter alone, while we’ve calculated his 2015 returns through June 30 at an even more impressive 20.9%. Note that our weighted average returns metric is only an approximation of a fund’s returns from its long positions in stocks with at least $1 billion market caps, and does not factor in investments in smaller companies, short positions, or options, so they may differ greatly from a fund’s actual returns.
The returns might look shocking for someone who doesn’t know who Karp is, but of little surprise to those in the know, after he successfully served as co-chief investment officer at Carlson Capital LP and was the director of research and a money manager of global equities at CR Intrinsic Investors before launching his own long-short fund in 2013. According to its latest 13F filing, Tourbillon Capital is largely focused on the services sector, in which 37.98% of the value of holdings in its public equity portfolio was invested, while technology stocks were next at 20.13%. In our opinion, the outstanding performance of Tourbillon Capital Partners and the stocks behind it should not stay unnoticed by the general public, therefore in this article we are going to review several large, well-performing holdings in the portfolio of the hedge fund manager, including Expedia Inc (NASDAQ:EXPE), Amazon.com Inc (NASDAQ:AMZN) and Horizon Pharma PLC (NASDAQ:HZNP).
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We don’t just track the latest moves of funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked brilliantly, outperforming the market every year and returning 135%, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
Following a hike of 352%, the total position of Tourbillion Capital Partners in Expedia Inc (NASDAQ:EXPE) included 3.43 million shares worth $322.87 million at the end of March. Over the second quarter of the year, the stock of the $13.77 billion online travel company appreciated by 14.70%, realizing the best expectations of Jason Karp (or so we imagine). At the beginning of 2015, Expedia announced its plans to acquire another online booking service, Orbitz Worldwide Inc (NYSE:OWW) for $12.00 per share in cash. The deal was approved by shareholders in May, and the merged company will control around 75% of the US market and 5-6% of the global travel market, which significantly expands its profitability potential. Among the other prominent hedge funds that we follow, Paul Reeder and Edward Shapiro‘s PAR Capital Management held some 3.66 million shares, valued at $344.5 million, leading the list of top investors in Expedia Inc (NASDAQ:EXPE).
The total position of Tourbillion Capital Partners in Amazon.com Inc (NASDAQ:AMZN) included 365,000 shares worth $135.82 million at the end of March. The position was increased by 83% during the first quarter. During the second quarter, Amazon.com Inc (NASDAQ:AMZN)’s bet returned Karp and other shareholders 19.20% in equity gains. Currently Amazon is planning to boost its sales and profitability through the new Amazon Prime service. For a $99 per year subscription, customers get quite a few pleasant bonuses, including two-day shipping of many items, without a minimum purchase threshold, free Kindle books to borrow, and a free video streaming service. On July 15, Amazon will host a Prime Day with attractive discounts and daily deals to celebrate its anniversary and promote the service. Ken Fisher‘s Fisher Asset Management held some 2.47 million shares worth $917.46 million.
The total position of Tourbillion Capital Partners in Horizon Pharma Inc (NASDAQ:HZNP) included 2.67 million shares worth $69.21 million after the first three months of the year, a 114% increase from its position on December 31. The company is engaged in the production and development of medicine for various arthritis, inflammation, and orphan diseases. During the April – June period, the stock of this $5.55 billion biopharmaceutical company surged by 38.40%. This week Horizon Pharma announced its plans to acquire Depomed Inc (NASDAQ:DEPO) for some $29.25 per share. The management of Horizon believes that this deal will increase revenues and profits greatly through operational synergies. In the meantime, James E. Flynn‘s Deerfield Management owns around 12.79 million shares of the company, valued at $332.23 million as of March 31, having increased its own holding of Horizon Pharma Inc (NASDAQ:HZNP)’s stock by 10% during the first quarter of this year.
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