Steve Cohen is one of the most successful hedge fund managers in the U.S, ranking 72 on Forbes’ list of the World’s Billionaires, with a fortune estimated at $12.7 billion. He founded Point72 Asset Management, a family-controlled investment company, in 2014 as the successor to his hedge fund S.A.C. Capital Advisors, which he founded in 1992 with $20 million. In 2013, the SEC brought charges against Mr. Cohen for failing to prevent insider trading at his fund, to which S.A.C. Capital plead guilty later that year. Mr. Cohen is barred from managing money for outside investors until 2018, according to a settlement he reached with the SEC, and rumors have claimed that he does indeed have interest in doing so again once able.
According to the latest 13F filing reported by the Connecticut-based hedge fund, it manages a portfolio with holdings valued at $14.69 billion. In this article we’ll analyze five of the most noteworthy bullish moves made by the successful family office during the second quarter and delve into the performance of each stock in question to see what Mr. Cohen and his team might see in them.
Hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Amazon.com, Inc. (NASDAQ:AMZN)
– Shares Owned by Point72 Asset Management (as of June 30): 666,620
– Value of Point72 Asset Management’s Holding (as of June 30): $477.04 million
Point72 acquired 536,020 shares of Amazon.com, Inc. (NASDAQ:AMZN), increasing its holding in the company by 410% during the second quarter. The total stake now accounts for about 3.25% of the value of the hedge funds’ equity portfolio. Last month, Amazon reported second quarter earnings that blew past analysts’ forecasts. The e-commerce giant earned $1.78 per share on $30.4 billion in revenue, while the Street was expecting just $1.11 in EPS on $29.55 billion in revenue. Amazon expects an even better top-line in the third quarter, anticipating revenue to come in between $31 billion and $33.5 billion. Recently, Amazon’s competitor Wal-Mart Stores Inc. (NYSE:WMT) acquired web retailer Jet.com, but analysts believe that the new combo will not be able to surpass the burgeoning sales and popularity of Amazon. Shares of Amazon.com, Inc. (NASDAQ:AMZN) have gained over 13% in 2016.
KAR Auction Services Inc (NYSE:KAR)
– Shares Owned by Point72 Asset Management (as of June 30): 3.26 million
– Value of Point72 Asset Management’s Holding (as of June 30): $136.35 million
Point72 increased its stake in KAR Auction Services Inc (NYSE:KAR) by 127% during the second quarter, buying 1.83 million shares of the company and lifting the total value of its stake in the Indiana-based auction services company to $136.35 million. Earlier this month, KAR Auction posted second quarter earnings which fell short of bottom-line estimates, with diluted EPS coming in at $0.44, though it surpassed revenue targets by a wide margin, with revenue of $771.8 million. KAR Auction Services Inc (NYSE:KAR) shares have gained over 10% in value so far in 2016. Amy Minella’s Cardinal Capital is another notable fund invested in the stock, owning about 1.98 million shares of the company as of June 30.
On the next page we’ll discuss the rest of the major bullish moves made by Point72 during the second quarter.