Stocks that were losing ground in afternoon trading yesterday included National Bank of Greece (ADR) (NYSE:NBG), SouFun Holdings Ltd (NYSE:SFUN), HORSEHEAD HOLDING CORP. (NASDAQ:ZINC), and Youku Tudou Inc (ADR) (NYSE:YOKU). Let’s take a closer look at what triggered these slides and their follow-up performance today, as well as who the money managers are that have been left with a sullen face in the wake of their disappointing day.
First off is the 12.4% dip in National Bank of Greece (ADR) (NYSE:NBG)’s shares. With the uncertainty surrounding Greece’s bailout, the underlying forces at play here are fairly obvious, especially given that the company’s sector of operation, finance is in the most vulnerable spot if negotiations between the Greek government and troika fail. So far this year, the stock has slid by almost 47% following another 4% drop today as Greece’s representatives met with the troika without any new proposal, bewildering and angering some involved. Kevin Kenny‘s Emerging Sovereign Group is the largest stockholder of National Bank of Greece (ADR) (NYSE:NBG) within our database, owning some 13.22 million shares valued at $16.92 million. However, the holding formed a meager 0.59% of the fund’s portfolio value.
The operator of a real estate Internet portal in China, SouFun Holdings Ltd (NYSE:SFUN) slid by more than 14% as Chinese equities continue to nosedive despite the government’s endorsement of a plan to buy $19.3 billion worth of securities to provide some support to the tumbling market. However, the longterm trend in the stock exhibits weakness as well, since it has depreciated by more than 37% over the last year, and another 7.43% in trading today. Among the funds that we track, Kerr Neilson’s Platinum Asset Management held the largest stake in the company, owning some 13.06 million shares valued at $78.35 million. The stake amassed about 1.56% of its portfolio.
Follow Kerr Neilson's Platinum Asset Management
HORSEHEAD HOLDING CORP. (NASDAQ:ZINC)’s stock fell by more than 16% as BB&T downgraded it to ‘Hold’ from ‘Buy’ given the shortfall in the production of zinc during June from the Mooresboro facility amid weakening prices for the metal. So far this year the stock has slid by over 41%, and by more than 2% today. This compares rather unfavourably with the 3.38% rise in the Industrial Metals & Minerals industry. Mohnish Pabrai, who manages the hedge fund by the same name, holds about 6.33 million shares of HORSEHEAD HOLDING CORP. (NASDAQ:ZINC) valued at $80.18 million. The holding represents almost 15% of the fund’s portfolio, so this week’s action may have left Pabrai with a sweaty brow.
Lastly is the 12.7% dip in the Chinese Internet television company, Youku Tudou Inc (ADR) (NYSE:YOKU)’s shares, owing to the same forces that pulled down SouFun Holdings Ltd (NYSE:SFUN). Not on stock on the list rebounded today, as Youku has dropped by another 7% in afternoon trading today. However, the stock is still up by more than 7% year-to-date and is currently trading well above its 52-week low. Although the company missed the estimates for the bottom line in its financial results for the first quarter, it outperformed on the top line front and provided a strong guidance for the second quarter. Kerr Nielson‘s Platinum Asset Management also owns a big stake in the other Chinese equity, about 12.23 million shares of Youku Tudou Inc (ADR) (NYSE:YOKU) valued at $152.94 million, representing about 3.05% of the fund’s portfolio value.
An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like these renowned funds with adequate knowledge and resources can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 80 percentage points and returning over 135%, while hedge funds themselves have collectively underperformed the market (read the details here).
Disclosure: None
