Steve Cohen‘s Point72 Asset Management has disclosed several filings for the end of June, in which it has reported changes to holdings from its equity portfolio. Among the companies mentioned in Point72’s filings are: Olin Corporation (NYSE:OLN), Nationstar Mortgage Holdings Inc (NYSE:NSM), BioDelivery Sciences International, Inc. (NASDAQ:BDSI). Let’s take them one by one and see the changes that the investor has made in his holdings.
A couple of words about Point72 Asset Management. It is a group of hedge funds that is currently managing billionaire Steven Cohen’s personal wealth, after he closed his former firm, SAC Capital Advisors that he founded in 1992. After an investigation by the Securities and Exchange Commission regarding insider trading allegations, the fund pleaded guilty and paid $1.2 billion in penalties and faced the indication of several employees and portfolio managers. As of the end of March, Point72 manages an equity portfolio valued at $14.67 billion, with Visteon Corp (NYSE:VC), EQT Corporation (NYSE:EQT) and Suncor Energy Inc. (USA) (NYSE:SU) representing the largest holdings.
We follow hedge funds like Point72 Asset Management because our research has shown that their stock picks historically managed to generate alpha even though the filings are up to 45-days delayed. We used a 60-day delay in our back tests to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012, during which time they have returned more than 135%, outperforming the S&P 500 ETF by some 80 percentage points (see more details here).
Olin Corporation (NYSE:OLN) is one of the companies that Mr. Cohen is bullish on, as Point72 reported ownership of 4.06 million shares, versus 227,900 shares held previously. In this way, as of the end of June, the investor holds around 5.2% of the company’s outstanding stock. Moreover, the filing added that Point72 acquired shares as Olin Corporation (NYSE:OLN) was closing its merger with the Dow Chemical Co (NYSE:DOW), under the terms of which, Dow has separated a part of its chemical business and merged it with a wholly-owned subsidiary of Olin. Under the terms of the merger agreement, the shareholders of Dow Chemical would receive 50.5% of Olin’s stock, with existing shareholders owning the other 49.5%. According to its latest 13F filing, Point72 holds approximately 954,600 shares of Dow Chemical as of the end of March. Another shareholder of Olin Corporation (NYSE:OLN) is billionaire Israel Englander‘s Millennium Management with 609,900 shares.