Fidelity National Information Services (FIS), Inphi Corporation (IPHI) & Two More: Did Maplelane Capital’s Picks Live Up to the Hype?

There were 659 hedge funds in our system whose 13F portfolios on June 30 consisted of at least five long positions in billion-dollar companies. Of those 659 funds, an impressive 627 of them delivered positive returns during the third-quarter from their long positions in those stocks, based on the size of those positions on June 30. All told, their long picks in billion-dollar companies averaged 8.3% returns for the quarter, well above the S&P 500 ETFs’ 3.3% figure. Nonetheless, hedge funds continue to disappoint their investors for the most part, as redemptions have hit the industry hard of late. That can be chalked up to their high fees and the underperformance on the short-side of their portfolios, which provide downside protection but have dragged down overall returns. In this article we are going to examine four companies that were in Maplelane Capital‘s portfolio at the end of the June quarter, including Fidelity National Information Services (NYSE:FIS), Inphi Corporation (NYSE:IPHI),  Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and MicroStrategy Incorporated (NASDAQ:MSTR). 

Leon Shaulov‘s Maplelane Capital has an equity portfolio whose value climbed to $3.79 billion as of the end of September, from $2.35 billion at the end of June. The fund’s 52 long positions in companies that were worth $1 billion or more on June 30 delivered a weighted average return of 14.84% in the third quarter. Even though these returns differ from the fund’s actual returns, because they don’t include short positions, holdings in micro-cap companies, and some other instruments, they still offer good insight into the fund’s investment expertise on the long side of its portfolio. Therefore, we’ll take a closer look at the fund’s positions in the aforementioned companies, and see what kind of return they delivered in the third quarter.

We’ll start with Fidelity National Information Services (NYSE:FIS), a financial services technology company, in which Maplelane Capital raised its stake by 50% in the June quarter, to 900,000 shares. In the following three months, the stock advanced by 4.9%, but by the end of September, the fund trimmed its stake by 55%, to 400,000 shares, which were worth $30.81 million.

At Q2’s end, a total of 47 of the hedge funds that we follow were bullish on this stock, a dip of 4% from the first quarter of 2016. More specifically, Cantillon Capital Management was the largest shareholder of Fidelity National Information Services (NYSE:FIS) in our system, with a stake worth $555.9 million reported as of the end of June. Trailing Cantillon Capital Management was Citadel Investment Group, which amassed a stake valued at $386.8 million. Eagle Capital Management, OZ Management, and D E Shaw also held valuable positions in the company.

During the June quarter, Maplelane Capital boosted its stake in Inphi Corporation (NYSE:IPHI) by 88%, creating a position that was valued at $36.92 million. The boosting of the stake was a good investment move, seeing as the stock returned 35.8% in the third quarter. By the end of September, the fund further raised its stake by 30%, reporting a position that was valued at $65.21 million, counting 1.5 million shares, and comprising 1.72% of its portfolio’s value.

At the end of the second quarter, a total of 25 of the hedge funds in our system held long positions in this stock, a 17% fall from the first quarter of 2016. One of the largest stakes in Inphi Corporation (NYSE:IPHI) was reported by Columbus Circle Investors, which amassed a stake valued at $17.6 million. Renaissance Technologies, Shellback Capital, and Driehaus Capital also held valuable positions in the company.

We’ll check out two more of the fund’s stock picks on the next page.

Another stock that brought a positive return for the fund in the third quarter was Take-Two Interactive Software, Inc. (NASDAQ:TTWO), which, in that period, advanced by 18.9%. Maplelane Capital first raised its stake in the company in the June quarter by 7%, to 800,000 shares, and then by the end of September, the fund lowered its stake by 25% to 600,000 shares, which were worth $27.05 million.

At the end of the second quarter, Maplelane was one of 47 hedge funds tracked by Insider Monkey that were long this stock, a 12% hike from the previous quarter. The largest stake in Take-Two Interactive Software, Inc. (NASDAQ:TTWO) was held by Eminence Capital, which reported holding $144.2 million worth of stock as of the end of June. It was followed by Greenlight Capital with a $103.7 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and Ivory Capital (Investment Mgmt).

In MicroStrategy Incorporated (NASDAQ:MSTR), the fund trimmed its stake in the June quarter, and then further in the September quarter, by 20% and 47%, respectively. Hence, on September 30, the fund’s position in the company contained 86,154 shares, which were worth $14.43 million. In the third quarter the stock brought a negative return of 4.3%, while over the past 12 months, it’s advanced by 16.35%.

At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a 7% decline from the previous quarter. According to Insider Monkey’s hedge fund database, Eminence Capital, managed by Ricky Sandler, held the number one position in MicroStrategy Incorporated (NASDAQ:MSTR). Eminence Capital had a $125.7 million position in the stock, comprising 2.5% of its 13F portfolio. Sitting at the No. 2 spot was Glenhill Advisors, led by Glenn J. Krevlin, which held a $94.7 million position. Some other peers with similar optimism comprised First Eagle Investment Management, Alex Sacerdote’s Whale Rock Capital Management, and Eduardo Costa’s Calixto Global Investors.

Disclosure: None