GLG Partners, founded by billionaire Noam Gottesman, has filed its latest 13F with the SEC, revealing a public equity portfolio worth $3.8 billion as of the end of the third quarter. GLG Partners was founded in 1995 as a sub-division of Lehman Brothers International (Europe), and later became independent in 2000. The fund, now part of Man Group, currently is managed by Teun Johnston and Mark Jones. GLG Partners has a diversified portfolio which includes technology, energy, finance, and healthcare stocks. During the third quarter, the fund opened positions in over 160 companies, and sold its holdings in over 140 companies. In this article, we are going to focus on GLG Partners’ top stock picks for the third quarter.
Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 53 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. a 48.7% gain for the S&P 500 Index (see more details here). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).
#5 Hudson City Bancorp Inc. (NASDAQ:HCBK)
– Shares held (as of September 30): 4.91 million
– Total Value (as of September 30): $49.97 million
Hudson City Bancorp Inc. (NASDAQ:HCBK) represents GLG Partners’ fifth-most valuable holding, and the fund upped its position in it by 6% during the third quarter. On Nov. 2, M&T Bank Corporation (NYSE:MTB) announced that it completed the acquisition of Hudson City Bancorp Inc. (NASDAQ:HCBK), and merged it into a subsidiary of M&T. In a statement, M&T Bank said that Hudson City’s branches will continue to operate under the same name, as a division of M&T Bank, until they are converted to M&T’s network, which is expected to occur in the first quarter of 2016. Clint Carlson’s Carlson Capital held 10.71 million shares of Hudson City Bancorp as of the end of September.
#4 McKesson Corporation (NYSE:MCK)
– Shares held (as of September 30): 279,376
– Total Value (as of September 30): $51.69 million
GLG Partners raised its share ownership in McKesson Corporation (NYSE:MCK) during the third quarter by 29%. California-based McKesson Corporation is engaged in distributing pharmaceuticals and providing health information technology, medical supplies, and care management tools, and has a market cap of $43.65 billion. For the quarter ended Sept. 30, McKesson Corporation (NYSE:MCK) reported a profit of $617 million, or $2.63 per share, a significant increase compared to the $469 million, or $1.99 per share, that it earned in the same year-ago period. Meanwhile, the company’s quarterly revenue rose by 10% to $48.8 billion, while analysts were expecting the company to report EPS of $2.99 on revenue of $47.8 billion. In addition, McKesson Corporation (NYSE:MCK)’s board recently approved the repurchase of up to $2 billion of shares, which have lost 8.57% year-to-date. Another investor that sees value in the stock is Andreas Halvorsen’s Viking Global, as it owns 2.27 million shares as of the end of September.
On the next page, we will talk about the top three stocks of GLG Partners, including Cheniere Energy Inc. (NYSEMKT:LNG).