Billionaire Israel Englander’s Catapult Management Is Betting Big On These 5 Stocks for Q4

Catapult Capital Management is a New York-based long/short equity hedge fund subsidiary of Millennium Management, an alternative asset management firm founded by billionaire Israel Englander in 1989. Millennium Management employs over 1,800 people across its offices in the United States, Europe and Asia and manages nearly $32.5 billion of investors’ money, as of November 1, 2015.  Catapult Capital Management recently submitted its 13F filing with the Securities and Exchange Commission for the reporting period of September 30. The filing revealed that at the end of September, Catapult Capital’s U.S equity portfolio was worth $264.5 million, a significant decline from the nearly $696 million that it was worth at the end of June. The filing also revealed that the equity portfolio of Catapult saw a very high quarter-over-quarter turnover of 134.44% during the period. In this article we will take a closer look at Catapult Capital’s top five stock picks going into the fourth quarter.

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#5 NuVasive, Inc. (NASDAQ:NUVA)

 – Shares Owned by Catapult Capital Management (as of September 30): 135,000

 – Value of Holding (as of September 30): $6.51 Million

The 85,000 shares of NuVasive, Inc. (NASDAQ:NUVA) that Catapult Capital Management bought during the third quarter helped the company jump 97 spots quarter-over-quarter to become the fund’s fifth-largest equity holding by the end of September. Shares of NuVasive, Inc. (NASDAQ:NUVA) have largely remained in the range of $45-to-$55 this year and currently trade up by 11% year-to-date. On October 29, analysts at Canaccord Genuity reiterated their ‘Buy’ rating and $58 price target on the stock, which represents a potential upside of over 10%. Of the 37 hedge funds covered by Insider Monkey that reported owning a stake in the company at the end of the third quarter, Andrew Feldstein and Stephen Siderow‘s Blue Mountain Capital was its second-largest shareholder, having initiated its stake in the third quarter by purchasing 1.66 million shares of NuVasive, Inc.

#4 Aetna Inc (NYSE:AET)

 – Shares Owned by Catapult Capital Management (as of September 30): 72,877

 – Value of Holding (as of September 30): $7.97 Million

Aetna Inc (NYSE:AET) also made a big jump in Catapult Capital’s portfolio, from being its 20th-largest equity holding at the end of June to being its fourth-largest at the end of September, thanks to Catapult upping its stake by 45% during the third quarter. However, a lot of hedge funds didn’t feel the same way towards the company during the period, as the number of hedge funds in our database that reported having a stake in Aetna Inc (NYSE:AET) dropped to 70 from 80. Shares of Aetna rose steadily throughout the first half of the year, but have been on a gradual decline ever since the company announced that it would be acquiring Humana Inc (NYSE:HUM) for $37 billion in July. Last month, shareholders of Aetna voted overwhelmingly in favor of the merger. However, some analysts are still skeptical about the deal going through due to the regulatory hurdles it faces. Daniel S. Och‘s OZ Management was one of the funds that initiated a stake in the company during the third quarter; it held over 3.75 million shares of Aetna Inc as of September 30.

#3 Zoetis Inc (NYSE:ZTS)

 – Shares Owned by Catapult Capital Management (as of September 30): 195,525

 – Value of Holding (as of September 30): $8.052 Million

With its shares falling by 14.45% during the third quarter coupled with Catapult Capital Management reducing its stake in the stock by 60% during the same period, Zoetis Inc (NYSE:ZTS) fell from being Catapult’s top stock pick, to third. Shares of Zoetis Inc (NYSE:ZTS) have largely been range-bound throughout the year and currently trade up by 8.71% year-to-date. On November 2, Zoetis Inc announced that it would be acquiring the world’s leading aquatic health group, PHARMAQ Holding AS, for $765 million. The popularity of Zoetis Inc saw a significant drop among hedge funds during the third quarter, with only 60 funds covered by Insider Monkey disclosing a stake in it by the end of the period, down from 70 at the start of it. Among the funds that sold its stake in the company during the third quarter was Dmitry Balyasny‘s Balyasny Asset Management.

#2 Edwards Lifesciences Corp (NYSE:EW)

 – Shares Owned by Catapult Capital Management (as of September 30): 63,543

 – Value of Holding (as of September 30): $9.034 Million

Though Catapult reduced its stake in Edwards Lifesciences Corp (NYSE:EW) by 48% during the July-to-September period, the company still managed to jump two spots quarter-over-quarter and become the fund’s second-ranked stock pick. Shares of the heart valve systems manufacturer have performed very well in the fourth quarter and trade up by 28.63% year-to-date. On November 19, the company announced that its shares will undergo a 2:1 split before the markets open for trade on December 14. The popularity of Edwards Lifesciences Corp (NYSE:EW) among hedge funds didn’t see any major change during the third quarter, with 46 firms long Edwards, unchanged during the quarter. Ken Griffin‘s Citadel Investment Group increased its Edwards Lifesciences holding by 78%, giving it ownership of over 2.2 million shares and making it the largest shareholder of the company in our database.

#1 Allergan PLC (NYSE:AGN)

 – Shares Owned by Catapult Capital Management (as of September 30): 42,500

 – Value of Holding (as of September 30): $11.55 Million

Finally, the 325% boost to its Allergan PLC (NYSE:AGN) holding vaulted it to the top of Catapult’s portfolio. Interestingly, Allergan PLC (NYSE:AGN) was also the most held stock among hedge funds covered by Insider Monkey at the end of September, with 151 of the 720+ funds we cover reporting being long the stock. Shares of Allergan PLC rallied significantly in late-October after reports emerged that pharmaceutical giant Pfizer Inc. (NYSE:PFE) was in early talks to acquire the company. However, following the age-old mantra of ‘buy on rumor, sell on news’, the stock of Allergan PLC actually dropped on November 23 after it was formally announced that Pfizer Inc. will be buying it for $160 billion. Farallon Capital, founded by Thomas Steyer, was one of the hedge funds that reduced its stake in Allergan during the third quarter; it held 894,411 shares of it as of September 30.

Disclosure: None