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5 Gems from Peconic Partners’ Strong Technology Portfolio

William Harnisch‘s New York-based Peconic Partners was founded in 2000 and is focused on delivering long-term returns to investors. At the end of September the market value of the firm’s public equity portfolio stood at $611.99 million, with the technology sector comprising about 18% of that value. The firm’s portfolio is highly concentrated, with its top ten holdings representing 84.47% of the value of its portfolio. In this article, we’ll take a look at Peconic’s top technology picks, which includes two of those conviction top ten stocks.

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, Insider Monkey looks at only the aristocrats of this group, around 730 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge, not because they are not good at picking stocks on the long side of their portfolios. Hedge funds did in fact manage to outperform the market on the long side of their portfolios. In fact, the 15 most popular small-cap stocks among hedge funds has returned 102% since the end of August 2012, beating the S&P 500 Index by 53 percentage points (see the details here).

William Harnisch
William Harnisch
Peconic Partners LLC

#5 NXP Semiconductors NV (NASDAQ:NXPI)

 – Shares held (as of September 30): 18,500

 – Total Value (as of September 30): $1.61 million

During the September quarter, Peconic slashed its holding in the $21.89 billion semiconductor company by 73%. NXP Semiconductors NV (NASDAQ:NXPI)’s stock has appreciated by nearly 16% this year, and Peconic may feel its valuation is now becoming stretched, with it sporting a price-to-book ratio of over 37, well above many of its industry peers. FBR Capital nonetheless reiterated its ‘Outperform’ rating on the company last month, though it did revise its price target to $105 from $115. Among the over 700 hedge funds that we track at Insider Monkey, Eric W. Mandelblatt‘s Soroban Capital Partners is the largest stockholder of NXP Semiconductors NV (NASDAQ:NXPI), owning about 5.05 million shares.

#4 LogMeIn Inc (NASDAQ:LOGM)

 – Shares held (as of September 30): 50,000

 – Total Value (as of September 30): $3.41 million

The $1.74 billion provider of cloud-based service offerings has seen its stock surge by more than 40% this year. Peconic continues to be bullish on the company, upping its stake in it by 25% during the third trimester. However, the general sentiment among the funds that we track was slightly bearish during this period. 22 funds had investments worth $177.57 million in the company at the end of September, down from 25 firms at the end of June, though their aggregate investments were up from $162.63 million, partly due to stock price appreciation. Eric Bannasch tops the list of those 22 shareholders, as his firm Cadian Capital held about 561,400 shares of LogMeIn Inc (NASDAQ:LOGM) valued at $38.26 million at the end of September.

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