Balyasny Asset Management L.P. is a Chicago-based multi-strategy hedge fund founded in 2001 by its current CEO and managing partner, Dmitry Balyasny. The institutional investment firm has additional offices in other major metropolises in the U.S. and worldwide. Balyasny’s firm utilizes a mix of investment strategies such as technical analysis, fundamental analysis, and cyclical analysis to manage its portfolio. A few years ago, Balyasny Asset Management started to engage in macro investing yet again after taking a halt in this type of investing for almost five years. At the end of March, the period for which Balyasny Asset Management’s latest 13F filing with the SEC covers, the value of the fund’s public equity portfolio was valued at $12.38 billion. In this article we will cover the four largest public equity holdings of Balyasny when measured by the value of the shares held, which are Amazon.com Inc. (NASDAQ:AMZN), Peabody Energy Corporation (NYSE:BTU), Penn National Gaming Inc. (NYSE:PENN) and Expedia Inc. (NYSE:EXPE).
We follow hedge funds like Balyasny Asset 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).
Balyasny Asset Management added to its position in Amazon.com Inc. (NASDAQ:AMZN) during the first quarter. The hedge fund’s position in the largest Internet-based retailer in the U.S. was lifted to 428,055 shares valued at $159.27 million, a big increase from just 117,572 shares held at the end of 2014. Although Amazon’s shares have skyrocketed by nearly 38% since the beginning of the year, there are no signs that the stock will stop rising over the coming months. It is anticipated that Amazon.com Inc. will start selling its private-label food and household items via its Fresh grocery delivery service, which is currently available in a few cities throughout the United States. Amazon could actually increase its profit margins by selling a wide portfolio of private-label products. Ken Fisher’s Fisher Asset Management and Boykin Curry’s Eagle Capital Management owned sizable positions in Amazon.com Inc. (NASDAQ:AMZN) at the end of the first quarter, consisting of 2.47 million shares and 2.23 million shares, respectively.
Balyasny Asset Management revealed a new position in Peabody Energy Corporation (NYSE:BTU) in its latest 13F filing. Balyasny purchased a 27.31 million-share stake valued at $134.34 million as of March 31. Despite the fact Peabody’s shares have plunged by more than 55% this year as the U.S. coal industry has been experiencing its worst slump in decades, Wall Street analysts are very bullish on Peabody Energy Corporation, suggesting that the stock will more than double by the end of the year. Peabody and the coal industry in general have been harmed by slow economic recovery, new clean air regulations and cheap natural gas, which resulted in a decrease in the company’s bond rating to B2 (i.e. high credit risk) by Moody’s Corporation (NYSE:MCO). Nevertheless, Peabody is very likely to achieve a turnaround as the pace of recovery in the U.S. economy continues to increase, which will undoubtedly stimulate the development of the U.S. coal industry. David Iben’s Kopernik Global Investors is the second-largest shareholder of Peabody Energy Corporation (NYSE:BTU) among the hedge funds we track, owning 9.28 million shares.