Daniel Benton‘s Andor Capital Management is a tech-focused fund that has recently disclosed its equity portfolio via a 13F filing with the US Securities and Exchange Commission. According to our analysis that includes a fund’s 13F holdings in companies with market cap above $1.0 billion, Andor’s 15 long equity positions returned 3.4% in 2015, which is a pretty good result, taking into account the market turmoil witnessed last year and the losses registered by many other investors. According to the fund’s 13F filing, the value of its equity portfolio increased 10.3% during the fourth quarter to nearly $702 million. However, the portfolio was fairly concentrated with long positions in only 17 stocks. In this post, we are going to analyze the fund’s top five stock picks going into 2016, which alone in aggregate amassed over 65% of the value of the fund’s equity portfolio.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space, where the 15 most popular stocks among a select group of investors can deliver a double-digit alpha per year over the long term (see the details here).
#5 Amazon.com, Inc. (NASDAQ:AMZN)
– Shares Owned by Andor Capital Management (as of December 31): 60,000
– Value of Holding (as of December 31): $40.55 million
Andor Capital Management boosted its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 140% during the fourth quarter, amid a 30% rise registered by the stock during the same period. Though this year the stock has lost over 20% so far, analysts feel that this is a temporary phase and the stock will rebound. The main reasons for their optimism are the strong growth in its Web Services business, the rising level of its profitability and its dominant market position. On February 18, analysts at Canaccord Genuity upgraded the stock to ‘Buy’ from ‘Hold’ and also raised their price target by 25% to $750. Billionaire Stephen Mandel‘s Lone Pine Capital also increased its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 14% to 2.2 million shares during the last three months of 2015.
#4 Netflix, Inc. (NASDAQ:NFLX)
– Shares Owned by Andor Capital Management (as of December 31): 400,000
– Value of Holding (as of December 31): $45.75 million
Amid a 10.7% rise in Netflix, Inc. (NASDAQ:NFLX)’s stock during the fourth quarter, Andor Capital Management increased its stake in the company by 24%. Netflix’s stock has also lost over 20% of its market capitalization so far this year. However, unlike Amazon.com, some analysts are skeptical whether Netflix, Inc. (NASDAQ:NFLX)’s stock can recoup its losses in the short to medium term. Their major concerns are the company’s high free cash flow burn rate, the rise in its debt, slow US subscriber growth and the challenges it will face after expanding to new markets. On February 12, analysts at FBR & Co. downgraded the stock to ‘Market Perform’ from ‘Outperform’ and lowered their price target to $100 from $125. Donald Chiboucis‘ Columbus Circle Investors reduced its stake in the company by one-third to 681,166 shares during the October-December period.