Jacob Mitchell’s Antipodes Partners is an Australia-based hedge fund founded in 2015 which now has offices in both Sydney and London. The investment company, which is listed on the Australian stock market under the ticker APL, manages over $8 billion in assets, including over $20 million of its own money.
Antipodes uses a pragmatic value approach when constructing its portfolios, seeking out stocks with high margins of safety and low volatility. Its strategy has thus far resulted in lackluster performance since inception, trailing its benchmark MSCI All Country World Net Index by 28.2 percentage points through August 2020, delivering slightly less than half the cumulative returns of that index during that time.
Antipodes Partners added five new positions to its portfolio during Q2, four of which were tech stocks. We’ll take a look at those new positions, as well as one tech stock that the fund sold off during Q2.
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Stocks Bought in Q2
VMware, Inc. (NYSE:VMW)
– Shares Bought During Q2: 592,675
– Value of Holding (as of June 30): $91.78 million
– Q3 Return: -7.23%
Antipodes bought stakes in both VMware, Inc. (NYSE:VMW) and Dell during Q2. Both stocks received a boost late in the quarter after Dell announced it was mulling its options on what to do with its $50 billion stake in VMware, which could include unloading it.
That news spurred a flurry of hedge fund activity in both stocks. Antipodes was just one of many funds to buy VMware during Q2, which saw a 56% spike in ownership among the hedge funds tracked by Insider Monkey’s database. That buying surge has yet to yield positive results for the buyers, as VMW dipped by 7% in Q3.
Dell Technologies Inc. (NYSE:DELL)
– Shares Bought During Q2: 877,933
– Value of Holding (as of June 30): $48.23 million
– Q3 Return: 23.21%
As noted above, Antipodes also took a stake in Dell Technologies Inc. (NYSE:DELL) during Q2, a stock which fared much better in Q3, with shares rising by 23.2%. A July analysis by Deutsche Bank suggested that Dell would have 20-30% upside in the wake of parting with its VMware stake. The stock’s Q3 surge has since eaten into some of that potential upside however and it remains to be seen what Dell will ultimately do with its VMW assets, though a spinoff seems likely at this point.
Micron Technology, Inc. (NASDAQ:MU)
– Shares Bought During Q2: 668,199
– Value of Holding (as of June 30): $34.43 million
– Q3 Return: -8.85%
Antipodes also added chipmaker Micron Technology, Inc. (NASDAQ:MU) to its portfolio during Q2, predicting a turnaround for the stock which has fallen by 14% in 2020. Micron is facing a difficult challenge going forward however, effectively losing Huawei as a customer in mid-September after the grace period for making shipments to the Chinese tech giant closed. Huawei accounted for about 10% of Micron’s business. Micron is also dealing with weakness in the DRAM and NAND markets which could persist into next year.
Roku, Inc. (NASDAQ:ROKU)
– Shares Bought During Q2: 322,979
– Value of Holding (as of June 30): $37.64 million
– Q3 Return: 62.02%
Antipodes became the latest hedge fund that is tracked by Insider Monkey to take a long position in Roku, Inc. (NASDAQ:ROKU). Just ten such funds were long ROKU at the end of 2017, but the stock has received consistently greater support from hedge fund managers over the past two and a half years, culminating in more than 40 funds holding shares as of the middle of 2020. Roku’s streaming service currently boasts more than 40 million subscribers, a figure which is projected to reach 70 million by 2022. ROKU shares had a blowout Q3, gaining 62%, and the stock has continued to move higher early in Q4.
Stocks Sold in Q2
Cisco Systems, Inc. (NASDAQ:CSCO)
– Shares Sold During Q2: 1.77 million
– Value of Holding (as of June 30): –
– Q3 Return: -15.54%
Antipodes unloaded its 1.77 million shares of Cisco Systems, Inc. (NASDAQ:CSCO) during Q2 to close its position in the network hardware and software company. Cisco is facing major headwinds in enterprise IT spending given the dramatic shift to remote work during the pandemic, and that’s been reflected in its two most recent earnings reports which showed major revenue declines. The company also admitted last month that demand in the Americas was still no better than it was back in May. Cisco shares slumped by 15.5% in Q3.
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Video: Top 5 Stocks Among Hedge Funds
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Disclosure: None. This article is originally published at Insider Monkey.
