D E Shaw Makes Massive Investments in Apple, Disney, More

David E. Shaw is an American computer scientist and investor who founded D.E. Shaw & Co., L.P. in 1988. The hedge fund manages a 13F portfolio of over $59.68 billion. David E. Shaw, a PhD from Stanford University, attained fame due to his work in high-speed quantitative trading based on parallel computer networks. Mr. Shaw was also a faculty member at Columbia University. He has worked for Morgan Stanley and President’s Council of Advisors on Science and Technology under Bill Clinton’s era.  In this article, we will take a look at D.E. Shaw & Co., L.P’s top 5 picks of the third quarter.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Apple Inc. (NASDAQ:AAPL)

– Shares Owned by D.E. Shaw & Co., L.P. (as of September 30): 6.68 million

– Value of D.E. Shaw & Co., L.P.’s Holding (as of September 30): $755.56 million

D.E. Shaw & Co boosted its stake in Apple Inc. (NASDAQ:AAPL) by 178% in the third quarter, amassing a total of 6.68 million shares of the company, which had an aggregate value of $755.56 million. Investment firm Canaccord Genuity recently said Apple’s profit share in the smartphone industry skyrocketed to 106% in the third quarter from 75% in the previous quarter, primarily due to its rival Samsung’s Galaxy Note 7’s troubles. Japanese newspaper Nikkei recently claimed that Apple is considering moving some of its manufacturing from China back to the States, and has asked its Taiwanese manufacturer Foxconn to look into the feasibility of this crucial change. President-elect Donald Trump has vehemently vowed to bring technology manufacturing back from Asia to create more jobs in the States. At the end of the third quarter, 145 hedge funds in our database of 742 funds were long Apple Inc. (NASDAQ:AAPL), up from 116 funds a quarter earlier.

Walt Disney Co (NYSE:DIS)

– Shares Owned by D.E. Shaw & Co., L.P.(as of September 30): 4.45 million

– Value of D.E. Shaw & Co., L.P.’s Holding (as of September 30):    $413.45 million

D.E. Shaw loaded up Walt Disney Co (NYSE:DIS) in the third quarter, buying over 4.28 million new shares of the company. The fund now owns 4.45 million Disney shares, which have a total market value of $413.45 million. Recently, Deutsche Bank upgraded Walt Disney to ‘Buy’ from ‘Hold’ and set a price target of $112. The bank is now confident on the company’s outlook for future because of the improvements in ESPN’s decline rate and expects growth in consumer products due to the slated release of Cars 3 and Spiderman: Homecoming in 2017. 51 hedge funds tracked by Insider Monkey were bullish on Walt Disney Co (NYSE:DIS) at the end of the third quarter. Alex Snow’s Lansdowne Partners owns 9.59 million shares of the company as of the end of Q3.

Bristol-Myers Squibb Co (NYSE:BMY)

– Shares Owned by D.E. Shaw & Co., L.P. (as of September 30): 7.28 million

– Value of D.E. Shaw & Co., L.P.’s Holding (as of September 30): $392.78 million

D.E. Shaw bought 6.02 million shares of Bristol-Myers Squibb Co (NYSE:BMY) in the third quarter, ending the period with a total of 7.28 million shares of the company. The updated position has a net worth of $392.78 million. The company recently disclosed that it received approval from European Commission for its Hodgkin lymphoma drug, Opdivo (Nivolumab).  Bristol-Myers Squibb reported third quarter EPS $0.77 on $4.83 billion revenue, above the forecasts of $0.65 EPS and $4.79 billion revenue. For full year 2016, the company sees EPS of $2.80-$2.90, versus prior guidance of $2.55-$2.65 and the consensus of $2.63. At the end of the September quarter, 50 hedge funds from our system held long positions in Bristol-Myers Squibb Co (NYSE:BMY).

United Technologies Corporation (NYSE:UTX)

– Shares Owned by D.E. Shaw & Co., L.P.’s (as of September 30): 3.20 million

– Value of D.E. Shaw & Co., L.P.’s Holding (as of September 30): $325.32 million

D.E. Shaw upped its stake in United Technologies Corporation (NYSE:UTX) by 95% in the third quarter. The fund now owns a total of 3.20 million shares of the Connecticut-based company, as of the end of Q3. The company earned $1.76 a share in the third quarter, above the estimates of $1.67 a share, while revenue in the quarter came in at $14.4 billion, versus the consensus estimate of $14.27 billion. Ken Fisher’s Fisher Asset Management owns 8.32 million shares of United Technologies Corporation (NYSE:UTX), as of the end of the third quarter.

Alphabet Inc (NASDAQ:GOOG)

– Shares Owned by D.E. Shaw & Co., L.P.’s (as of September 30): 413,192

– Value of D.E. Shaw & Co., L.P.’s Holding (as of September 30):    $321.17 million

D.E. Shaw boosted its stake in Alphabet Inc (NASDAQ:GOOG) by 109% in the third quarter, amassing a total of 413,192 shares of the company. The aggregate value of the position is $321.17 million. Google’s parent company reported third quarter EPS of $9.06, versus the analyst estimate of $8.64, while revenue of $22.25 billion was in-line with the estimates. The stock is up down around 1% so far this year.   A total of 137 hedge funds in Insider Monkey’s database owned shares of Alphabet Inc (NASDAQ:GOOG), as of the end of the third quarter.

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