Indus Capital’s Latest 13F Shows Bets on Technology and Basic Materials Sectors

David Kowitz’s Indus Capital is a New York based hedge fund founded in 2000 by David Kowitz and Sheldon Kasowitz, who had previously worked for George Soros as fund managers. The fund employs a long-short investment strategy and is focused on Asian and European markets, having offices in London, Singapore, Tokyo, and Hong-Kong.

The fund has presented its Form 13F at the U.S. Securities and Exchange Commission recently. In this filing, the fund disclosed its equity positions as of March 31, 2014. Its first quarter equity portfolio is divided between ETFs, that comprise about 40% of its total value, technology stocks (25%) and basic materials stocks (15%).

Over the quarter, Indus Capital opened 12 new positions, increased its stakes in 16 of its preexisting holdings, and sold out of 17 stocks. Let’s take a look at the five companies in which Mr. Kowitz’s fund owns the largest long positions in terms of value.

Sunedison Inc (NYSE:SUNE)

The fund’s most valuable equity position is, same as in the previous quarter, in Sunedison Inc (NYSE:SUNE). This $5.2 billion market cap semiconductor and solar technology company saw Mr. Kowitz’s fund increase its stake by 7% over the quarter. At the end of March, Indus Capital owned more than 12 million shares of Sunedison Inc (NYSE:SUNE), valued at over $226 million, which accounts for about 18% of its equity portfolio’s total value.

Other funds that are betting on Sunedison Inc (NYSE:SUNE) are Rishi Bajaj, Toby Symonds, And Steve Tesoriere’s Altai Capital, which declared holding more than 18.4 million shares in its latest 13F, and John Lykouretzos’ Hoplite Capital Management, which started a position with 16 million shares during the first three months of the year.

Another company that felt Indus Capital’s bullishness is HDFC Bank Limited (ADR) (NYSE:HDB), a $37.5 billion market cap banking and financial services provider. Over the quarter, the fund increased its position in HDFC Bank Limited (ADR) (NYSE:HDB) by 124%, to 1.79 million shares, worth about $73 million.  This makes it the company’s second largest hedge fund shareholder (amongst the funds that we track), only outranked by Ken Fisher’s Fisher Asset Management, which owns 4.8 million shares of HDFC Bank Limited (ADR) (NYSE:HDB), up by 11% over Q1.

Indus Capital has also increased its holding in NuStar Energy L.P. (NYSE:NS) by 30%, to 650,000 shares. This position, worth over $35 million, accounted for almost 3% of the fund’s equity portfolio. Even more bullish is Dmitry Balyasny’s Balyasny Asset Management, which almost doubled its position in NuStar Energy L.P. (NYSE:NS) to 2.3 million shares during the first quarter.

Rockwood Holdings, Inc. (NYSE:ROC) is a $5.5 market cap developer, manufacturer and marketer of value-added specialty chemicals and materials used for industrial and commercial purposes. Between Jan. 1 and March 31, Mr. Kowitz’s fund almost tripled its exposure to the company, and last declared owning 422,700 shares, worth roughly $31 million. William B. Gray’s Orbis Investment Management also upped its stake in Rockwood Holdings, Inc. (NYSE:ROC) by 7%, to approximately 3.95 million shares.

Finally, there’s Nu Skin Enterprises, Inc. (NYSE:NUS), a $4.3 billion market cap direct selling company, which develops and distributes personal care products and nutritional supplements that are sold under the Nu Skin and Pharmanex category brands. Indus Capital has initiated a position with 299,012 shares, worth about $24 million, during the first quarter. Another fund that recently started a position in the company is J Kevin Kenny Jr’s Emerging Sovereign Group, which acquired 2.26 million shares of Nu Skin Enterprises, Inc. (NYSE:NUS), valued at more than $187 million by the end of the quarter.

Disclosure: Javier Hasse holds no position in any stocks mentioned

 

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