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OZ Management Does Complete 180 On Halliburton Co (HAL), Makes Several Other Major Moves in Q4

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OZ Management is one of the largest hedge funds in the world with more than $61 billion in assets under management (for further hedge fund reading, don’t miss the 140 Biggest and Most Famous Activist Hedge Funds). The fund was founded in 1994 by Daniel S.  Och and uses multiple investment strategies such as merger arbitrage, equity restructuring, and more. Its major funds generated strong returns in the 2016 fourth quarter, as the OZ Master Fund was up by 2.7%, while the OZ Credit Opportunities Master Fund was up by 5.9%. These funds were also up by 2.2% and 1.5% respectively in January 2017. In its fourth quarter results, Daniel Och stated that the fund is well positioned to generate returns even in the uncertain environment of the day.

OZ Management reported holding a 13F portfolio valued at $14.3 billion as of December 31 per its latest 13F filing. The filing also showed that the top 10 positions in that portfolio accounted for 25.6% of its value, and that the consumer discretionary and tech sectors were the fund’s favorite, accounting for just over 50% of its 13F portfolio’s value. In this article we’ll examine some of the major purchases and sales made by the fund during the year-ending quarter.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 39.7%, topping the 24.1% gain registered by S&P 500 ETFs. Insider Monkey’s enhanced small-cap strategy registered gains of more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points in the last 4.5 years (see the details here).Och-Ziff Capital Management

OZ Management sold 1.7 million shares of E I Du Pont De Nemours And Co (NYSE:DD) during the December quarter, reducing its holding to 5.4 million shares worth $400 million. However, it still remained the fund’s second-largest position, amounting to 2.78% of its 13F portfolio’s value. The chemicals giant has seen its stock rise by 33% over the last year and currently has a market value of $68 billion. E I Du Pont De Nemours And Co (NYSE:DD) reported fourth quarter revenue of $5.21 billion and adjusted earnings per share of $0.51, a mixed results when compared to analyst estimates of $0.41 in EPS and revenue of $5.3 billion. E I Du Pont De Nemours And Co (NYSE:DD) announced last year that it would merge with American chemical conglomerate Dow Chemical Co (NYSE:DOW) to create a company with a market value in excess of $135 billion. Larry Robbins’ Glenview Capital sold its entire position in the stock during the fourth quarter, which had consisted of 1.82 million shares on September 30.

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OZ Management opened a large new position in Home Depot Inc. (NYSE:HD) call options during the fourth quarter, valued at $390 million, with options underlying 2.9 million shares. The fund also initiated a long position in Home Depot Inc.(NYSE:HD), buying more than a million shares valued at $141 million at the end of 2016, so needless to say, the fund is extremely bullish on the company. Home Depot Inc.(NYSE:HD) has performed well, returning more than 21% to investors over the last year and currently has a market value of $172 billion. 23 analysts out of the 32 covering the stock have Home Depot Inc. (NYSE:HD) rated as a ‘Buy’, while none have it rated as a ‘Sell’. While most brick and mortar retail stocks have been battered in recent times due to Amazon.com, Inc. (NASDAQ:AMZN) gobbling up market share, home improvement retailers have been somewhat insulated from the e-commerce threat. Aaron Cowen’s Suvretta Capital Management also bought a new stake in Home Depot Inc.(NYSE:HD) during the fourth quarter, consisting of 596,700 shares.

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We’ll analyze three more of OZ Management’s biggest Q4 moves on the next page.

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