Shopify Inc (SHOP), Amazon.com, Inc. (NASDAQ:AMZN) & More: Should You Follow Light Street Capital Into Its Top Picks?

Glen Kacher‘s Light Street Capital disclosed an equity portfolio worth around $547.6 million as of the end of June. According to our calculations, the fund’s return in the third quarter amounted to 18.11%, based on its long positions in companies worth at least $1.0 billion. Note that our measurements of the weighted returns might be different from the fund’s actual returns, because we don’t consider short positions, or small-cap investments for example. However, these calculations can still be used for assessing the fund’s investment skills.

With this in mind, let’s take a closer look at Light Street Capital’s positions in Shopify Inc (NYSE:SHOP), Amazon.com, Inc. (NASDAQ:AMZN), Expedia Inc (NASDAQ:EXPE), and Facebook Inc (NASDAQ:FB)

There were 659 hedge funds tracked by us, whose 13F portfolios on June 30 consisted of at least five long positions in billion-dollar companies. Of those 659 funds, an impressive 627 of them delivered positive returns during the third-quarter from their long positions in those stocks, based on the size of those positions on June 30. All told, their long picks in billion-dollar companies averaged 8.3% returns for the quarter, well above the S&P 500 ETFs’ 3.3% figure. Nonetheless, hedge funds continue to disappoint their investors for the most part, as redemptions have hit the industry hard of late. That can be chalked up to their high fees and the underperformance on the short-side of their portfolios, which provide downside protection but have dragged down overall returns. We recommend investors consider hedge funds’ long stock picks for their market-beating potential and will share four of them in this article, which were in the portfolio of on June 30.

In Shopify Inc (NYSE:SHOP), a company that provides cloud-based platforms for various enterprises, Light Street Capital lowered its stake by 1% to 1.88 million shares worth around $57.68 million during the June quarter. In the following three months, the stock advanced by 39.5%, and over the past 12 months it is up by 31.1%. At the end of June, a total of 24 funds tracked by Insider Monkey held long positions in this stock, up by 71% from one quarter earlier. More specifically, Abdiel Capital Advisors was the largest shareholder of Shopify Inc (NYSE:SHOP), with a stake worth $74.1 million reported as of the end of June. Whale Rock Capital Management, Renaissance Technologies, and Point72 Asset Management also held valuable positions in the company.

Light Street Capital, trimmed its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 16% to 75,000 shares worth $53.67 million during the second quarter. During the third quarter, shares of Amazon.com, Inc. (NASDAQ:AMZN) returned 17%. The number of funds from our database long Amazon increased by 12 to 145 during the April-June period. Among these funds, Andreas Halvorsen’s Viking Global held the most valuable position in Amazon.com, Inc. (NASDAQ:AMZN) at the end of June, worth close to $2.35 billion. The second most bullish fund manager was Fisher Asset Management, led by Ken Fisher, which held a $1.5 billion position at the end of the second quarter. Some other hedge funds and institutional investors that were bullish comprise Alex Snow’s Lansdowne Partners, Boykin Curry’s Eagle Capital Management and Stephen Mandel’s Lone Pine Capital.

Expedia Inc (NASDAQ:EXPE), was a stock in which Light Street Capital boosted its position by 161% during the June quarter and held 471,051 shares worth $50.07 million at the end of the period. Boosting of the stake was a good move, considering that the stock has returned 10.1% in the following three months. At the end of June, 67 funds followed by our team were bullish on this stock, a change of 3% from the previous quarter. More specifically, PAR Capital Management was the largest shareholder of Expedia Inc (NASDAQ:EXPE), with a stake worth $695.9 million reported as of the end of June. Trailing PAR Capital Management was Altimeter Capital Management, which amassed a stake valued at $478.1 million. Tourbillon Capital Partners, Steadfast Capital Management, and JANA Partners also held valuable positions in the company.

Another stock in which Light Street Capital trimmed its stake during the second quarter is Facebook Inc (NASDAQ:FB). The fund lowered its stake by 48% to 350,000 shares, which were valued at $40 million at the end of June. During the second quarter, the stock brought appreciated by 12.2%. Facebook Inc (NASDAQ:FB) was in 148 funds’ portfolios at the end of June, down from 164 investors a quarter earlier. Among them, Viking Global held the most valuable position in Facebook Inc (NASDAQ:FB), worth close to $2.3 billion. The second most bullish fund manager was Lone Pine Capital, led by Stephen Mandel, which held a $1.25 billion position. Other members of the smart money with similar optimism encompassed Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Armitage’s Egerton Capital Limited and Alex Snow’s Lansdowne Partners.

Disclosure: None