Famous for being an avid art collector, Steven Cohen was crowned the Hedge Fund King by the Wall Street Journal in 2006, only to fall out of grace several years later as his fund, SAC Capital, pleaded guilty to insider trading violations and agreed to close its doors for outsiders. Cohen himself escaped mostly unscathed, although he is banned from managing outside money until 2018. He closed SAC Capital and founded Point72 Asset Management as a family office to manage his own fortune. The fund’s equity portfolio carried an estimated value of $13 billion at the end of the first quarter, spread across a number of sectors. The fund’s previous top 5 positions were shaken up over the course of the first quarter and in this article we’ll take a look at the new hierarchy.
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Big Bet On Energy
First up is ConocoPhillips (NYSE:COP), a new addition to Point72 Asset Management’s equity portfolio. During the first quarter, the fund amassed 4.31 million shares of the energy company, which were valued at $173 million at the end of March. The slump in oil prices has prompted the management of ConocoPhillips (NYSE:COP) to undertake some painful measures to restructure its cost structure. Analysts at Deutsche Bank have recently declared the stock as “underappreciated” as they reiterated their ‘Buy’ rating and have set a price target of $62 per share, which implies an upside potential of 43%. Deutsche Bank’s Ryan Todd believes the market has not appreciated the company’s efforts to become the “lowest breakeven (capex + dividend) operator” among its peers, according to an investor note. In addition, Todd noted that ConocoPhillips (NYSE:COP) has a “stable multi-year production outlook” and “a strong commitment to return excess cash to shareholders.” Israel Englander‘s Millennium Management has also reported a fresh position in the stock, which amounts to 4.32 million shares.