Billionaire Dan Loeb Dumped Apple Inc. (AAPL) And Bought This Tech Stock

Page 1 of 2

By analyzing 13F filings from hedge funds and other notable investors in our database, we can develop investment strategies; for example, we have found that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year (learn more about our small cap strategy). We can also use 13Fs to see how fund portfolios change over time. At the end of September, billionaire Dan Loeb’s Third Point owned 710,000 shares of Apple Inc. (NASDAQ:AAPL) after having increased their holdings by 67% during the third quarter of 2012. Over the next three months, however, Loeb and his team dumped all of these shares and had no long position in Apple Inc. (NASDAQ:AAPL) according to Third Point’s 13F filing for the fourth quarter of the year (see more of Loeb’s recent portfolio activity).

Third Point was adding a number of new stock picks to its portfolio in Q4 while it was selling Apple Inc. (NASDAQ:AAPL) including News Corp (NASDAQ:NWSA) and Morgan Stanley (NYSE:MS). The biggest buy in the tech sector was its 525,000 shares of Equinix Inc (NASDAQ:EQIX), a $10 billion market cap data center services company. Equinix’s stock price is up 42% in the last year, significantly outperforming the broader indices, as the company has delivered impressive growth numbers. Specifically, in 2012 revenue was up 21% from the previous year. The four year CAGR, beginning in 2008, is 28%; this shows that sales growth was only slowing slightly as Equinix has increased in size. The fourth quarter numbers were less good, with revenue only increasing 14% versus a year earlier- this might be random variation but could signify the start of decelerating growth.

Dan Loeb Third PointOver time, however, Equinix has been racking up significant operating costs. As a result while earnings did increase by 60% last year from their levels in 2011, they are up only 37% from 2008 figures. In addition, the market is pricing in very high growth from what Equinix achieved in 2012: the current market cap is 72 times trailing earnings. Even with consensus earnings growth being considerable for the next couple years, the forward P/E- based on projections for 2014- is still higher than we would like at 41. We do like the recent earnings growth rates over 2011 levels, but we would generally want to see a company such as Equinix sustain that performance even if we didn’t have concerns about the revenue numbers from the fourth quarter of the year.

Here are some other hedge funds who like Equinix:

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Top 8 Biggest Charities in the US

FIX 10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!