Phill Gross and Robert Atchinson‘s Adage Capital Management has filed its 13F with the SEC for the reporting period of March 31, with the fund holding a public equity portfolio valued at $41.02 billion as of the reporting period. Gross (pictured) and Atchinson maintain a highly diversified public equity portfolio, with their investments spread out across a multitude of sectors, with their largest financial commitments being to the healthcare, technology, and consumer discretionary sectors. With technology stocks representing two of the top three positions in its public equity portfolio, let’s take a look at the top tech stock holdings of Adage Capital, which are Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Facebook Inc (NASDAQ:FB).
We follow hedge funds like Adage Capital 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 144%, outperforming the S&P 500 ETF by nearly 85 percentage points (see more details here).
Apple Inc. (NASDAQ:AAPL) is the second-largest stock investment of the fund and its top tech stock. The investment firm owns 8.87 million shares of the iPhone-maker, with the shares having a market value of $1.10 billion as of March 31. It is quite comfortable to interchange innovation with Apple, as the tech giant keeps on surprising its customers with astounding gadgets. In a recent announcement from General Motors Company (NYSE:GM), the carmaker has announced that it will use CarPlay, Apple Inc. (NASDAQ:AAPL)’s car system, in all of its 2016 Chevrolet models. Interestingly, General Motors will also use Google Inc (NASDAQ:GOOGL)’s Android Auto system alongside CarPlay. These systems are designed to allow easy integration of smartphones with the dashboard interface and reduce driver distraction. Icahn Capital LP and Fisher Asset Management are among the largest stockholders of Apple, which owns one of the most profitable businesses ever.
Microsoft Corporation (NASDAQ:MSFT) comes in at number two in the list of top tech picks of Adage Capital. The current position of the fund in the Windows OS developer amounts to 11.96 million shares valued at $486.29 million. Microsoft Corporation is an equally interesting company that comes up with impressive software products and applications. The tech giant has released an age and gender detector tool, “HowOldRobot”, which will work alongside Bing search results. This tool will be able to determine the age and gender of the subject whose photo is uploaded in the search box. This tool is likely to be available as an option that can be used for personal photographs or other Bing search results. In a separate announcement, Microsoft Corporation (NASDAQ:MSFT) has declared that the upgrades of its Windows 10 operating system will be chargeable after the first year of usage. Windows 10 is the last Windows operating system, with the company saying it will focus on providing upgrades to it in the coming years. ValueAct Capital and Jean-Marie Eveillard‘s First Eagle Investment Management hold large positions in Microsoft Corporation (NASDAQ:MSFT).
Facebook Inc (NASDAQ:FB), the social media behemoth, is another major tech stock in the public equity portfolio of Adage Capital. The one thing that is common in all of these stocks apart from being tech stocks is their innovative approach. Facebook is expanding itself into multiple directions with acquisitions and new projects. Some of its worthy mentions include WhatsApp, Oculus Rift, and Internet.org, the latter of which aims to provide free internet access to the users of developing countries. Adage Capital holds 3.25 million shares of the social network, valued at $266.95 million as of March 31. According to a recent announcement from its Oculus project, customers will likely have to spend about $1,500 for the Oculus Rift headset and a high-powered computer (if they don’t own one) to enjoy the device’s stunning virtual reality experience, which may limit its base of customers slightly. Brendan Iribe, CEO of Oculus, which was bought by Facebook last year for $2 billion, said that the company is trying to bring the cost down to about $1,000. Lone Pine Capital and Philippe Laffont‘s Coatue Management are among the largest investors of Facebook Inc (NASDAQ:FB).