Amish Mehta‘s SQN Investors held an equity portfolio worth $164.25 million at the end of June. The fund mainly invests in the technology sector, which represented over 60% of its portfolio. According to our calculations, SQN generated a return of some 24.57% in the third quarter and is up by 15.8% year-to-date. Our methodology includes only six positions in companies worth at least $1.0 billion as of the end of a particular quarter, in this case, the second.
Even though, SQN’s actual returns can be different from our results, because we don’t take into account its small-cap picks, four of which represented the fund’s largest positions heading into the third quarter. In addition, we exclude investments that are not disclosed in a fund’s 13F filing. Nevertheless, we can still get an idea if SQN Investors is a fund that, whose stock picks we can follow in order to generate market-beating returns.
Without any further ado, let’s take a look at SQN’s four largest holdings in companies worth over $1.0 billion. The investor significantly increased its stake in all of these stocks (all of which are from the technology space) during the second quarter and this move paid off pretty well as we will see further in this article.
In Infoblox Inc (NYSE:BLOX), SQN boosted its position by some 340% to 813,802 shares worth $15.27 million at the end of June. In the following three months the stock surged by nearly 41%, so we can assume that the position that was initiated in the first three months of 2016 generated pretty strong returns for the fund. Overall, heading into the third quarter of 2016, a total of 25 of the hedge funds tracked by Insider Monkey were long Infoblox Inc (NYSE:BLOX), down by 4% over the quarter. Hound Partners, managed by Jonathan Auerbach, held the biggest position in Infoblox Inc (NYSE:BLOX), as it had $78.5 million invested in the stock. The second most bullish fund manager was Starboard Value LP, led by Jeffrey Smith, holding a $72.2 million position. It’s worth also mentioning that Sahm Adrangi’s Kerrisdale Capital dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising about $6.2 million in stock.
IAC/InterActiveCorp (NASDAQ:IAC) saw SQN raise its stake by 144% over the quarter to 259,536 shares valued at $14.61 million on June 30. Subsequently the stock gained some 11% between July and September, helping lift the returns of 35 funds from our database that were bullish on this stock. Among them, Eric Bannasch’s Cadian Capital had the biggest stake in IAC/InterActiveCorp (NASDAQ:IAC) worth $125.85 million at the end of June. Other investors bullish on IAC/InterActiveCorp (NASDAQ:IAC) included Amy Minella’s Cardinal Capital, David Einhorn’s Greenlight Capital, and Blue Mountain Capital, led by Andrew Feldstein and Stephen Siderow.
SQN raised its exposure to Pegasystems Inc. (NASDAQ:PEGA) by 39% to 515,095 shares worth $13.88 million during the second quarter. During the third quarter, the stock appreciated by 9.5%, which is the smallest gain registered among stocks covered in this article. A total of 20 fnds tracked by Insider Monkey held long positions in Pegasystems Inc. (NASDAQ:PEGA) at the end of June, down by 17% from the previous quarter. Among them, Cadian Capital held a $32.7 million stake at the end of June. On the other hand, Peter Muller’s PDT Partners and Dmitry Balyasny’s Balyasny Asset Management sold out their positions in Pegasystems Inc. (NASDAQ:PEGA) worth $900,000 and $800,000 million between April and June.
On the other hand, shares of Yelp Inc (NYSE:YELP) surged by 37.4% between July and September, while SQN had entered the quarter with a stake containing 442,200 shares that had been raised by 23% during the previous three months. At the end of the second quarter, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 36% from the end of March. Tybourne Capital Management, managed by Eashwar Krishnan, held the number one position in Yelp Inc (NYSE:YELP), having reported a $186.7 million stake in its last 13F filing. Other funds bullish on Yelp, include D.E. Shaw, Citadel Investment Group and Debra Fine’s Fine Capital Partners, which assembled the most outsized position in Yelp Inc (NYSE:YELP) and had $22.9 million invested in the company at the end of the quarter.