Now that all hedge funds have released their latest 13F filings, Warren Buffett‘s $1 billion bet on Apple Inc. (NASDAQ:AAPL) has been the main headline. While you should definitely keep track of Buffett’s moves, make sure you take into consideration what Stanley Druckenmiller is doing, especially since the man is a legend of the investment world and has managed an average yearly return of 30% with no down-year during his career. Druckenmiller is now officially retired, but he still manages his own fortune through his family office – Duquesne Capital. Despite the fact that he was very critical of the current status of the economy and the stock market at a recent conference, where he urged investors to sell out of their positions and pile into gold, during the first quarter Druckenmiller initiated several new long positions for his fund. In this article we’ll take a look at the top 5 largest new bets reported in Duquesne’s latest 13F filing.
At Insider Monkey, we track around 790 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Bet On Fizzi Drinks
First up is PepsiCo, Inc. (NYSE:PEP). Over the course of the first quarter, Druckenmiller and his team acquired a total of 353,300 shares of the soft drink giant, a position valued at $36.2 million according to the fund’s 13F filing. Jim Simons‘ Renaissance Technologies doubled its investment in PepsiCo, Inc. (NYSE:PEP) during the same period of time to 3.73 million shares valued at $382 million. Activist investor Nelson Peltz, on the other hand, seems to have given up on his efforts to break the company up as his fund, Trian Fund Management, has exited the stock, previously having reported ownership of 18.3 million shares of Pepsi, which made it the third largest position. So far this year, PepsiCo, Inc. (NYSE:PEP)’s stock has inched up by 3% for the year. In the beginning of May, the company announced an increase in its annual dividend to $3.01 per share from $2.81 per share, which gives its stock a yield of 2.94% at the current levels.
Time To Buy Energy Stocks
Duke Energy Corp (NYSE:DUK), one of the largest electric power holding companies in the US, has also found its way into the equity portfolio of Duquesne Capital. In its latest 13F filing, the fund indicated ownership of 649,100 shares worth approximately $52.3 million at the end of the first quarter. Duke Energy Corp (NYSE:DUK) latest earnings report came in below expectations as the management lamented mild weather and winter storm repairs that affected its performance. The company said it had registered revenues of $5.62 billion, down by 7.3% year over year, and adjusted earnings of $1.13 per share, one cent lower than analysts’ consensus. Duke Energy said it is still on track to achieve its 2016 earnings target of $4.50 to $4.70 per share. Stuart J. Zimmer’s Zimmer Partners is also betting big on Duke Energy Corp (NYSE:DUK), having pledged 5.6% of its equity portfolio to this position. According to its latest quarterly report, the fund currently holds 1.66 million shares worth $134 million.