Iridian Asset Management, led by David Cohen and Harold Levy, disclosed 98 long positions in its latest 13F filing with the U.S. Securities and Exchange Commission (SEC) for the reporting period ended September 30. The value of the fund’s equity portfolio was at around $11.83 billion. David Cohen and Harold Levy are special situation investors focused on depressed stocks that are going through significant changes. The two founded Iridian Asset Management in 1996. As of the end of the third quarter, Iridian had around $12.7 billion assets under management. Previously, we’ve discussed Iridian’s top stock picks, let’s take a look at the fund’s top tech holdings.
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 NCR Corporation (NYSE:NCR)
Shares held (as of September 30): 7,154,484
Total Value (as of September 30): $162.77 million
Percentage of Portfolio (as of September 30): 1.38%
NCR Corporation (NYSE:NCR) is a technology company, in which Iridian upped its stake by 15%. The company seems to have a solid financial position, as it posted income from operations of $168 million for the third quarter, up more than 300% compared to the last year. Revenue, however, slipped by 2% to $1.61 billion. During the last three months, shares of NCR Corporation (NYSE:NCR) have gained by 1.15%. At the end of the second quarter, the total number of hedge funds among those we track that were holding shares NCR Corporation jumped to 44, compared to 31 funds at the end of the first quarter, with the aggregate value of these investments dropped to $1.54 billion from $1.61 billion. Marcato Capital Management, run by Richard McGuire, held 10.85 million shares of the company at the end of June.
#4 HP Inc (NYSE:HPQ)
Shares held (as of September 30): 10,193,106
Total Value (as of September 30): $261.05 million
Percentage of Portfolio (as of September 30): 2.21%
Iridian increased its position in HP Inc (NYSE:HPQ) by around 6% during the quarter. Hewlett-Packard separated the company’s PC and printer business from software and enterprise division. Under the new plan, Hewlett Packard Enterprise will focus on the corporate hardware and service business, while HP Inc (NYSE:HPQ) will comprise of PC and printers business. Shares of HP Inc (NYSE:HPQ) have lost over 65% year-to-date. Another investor that loves HP is Richard S. Pzena’s Pzena Investment Management, which owns 19.14 million shares of the company as of the end of September.
On the next page, we’ll talk about Iridian’s three other top three picks, namely Pitney Bowes Inc. (NYSE:PBI), SanDisk Corporation (NASDAQ:SNDK), and Check Point Software Technologies Ltd. (NASDAQ:CHKP).