Amid Horrendous Year, Crispin Odey Turns to These Stocks for Reprieve

Crispin Odey is a London based hedge fund manager and the founder of Odey Asset Management. Odey was successful on some bets made to capitalize on “Brexit”, though his performance for 2016 has been quite poor. His long short European fund was down by almost 35% as of mid-September 2016. The lackluster performance in 2016 has followed fund losses in 2014 and 2015 as well. This has resulted in the the fund losing over 70% of its assets under management (AUM) over the last one year, as per HSBC. In the article below, we look at some of the major stock holdings of Crispin Odey that might turn around his fortunes.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

Kinross Gold Corporation (NYSE:KGC) was amongst the top buys of Odey Asset Management for the quarter ending September 2016 and comprised more than 10% of its 13F portfolio. The fund held 35 million shares of this stock, up more than 20 million shares from the second quarter. Of the 22 analysts covering this stock, 13 have rated it as a hold while 6 analysts have rated it as a buy. Apart from Odey Asset Management, other hedge funds like David Iben’s Kopernik Global Investors, Arrowstreet Capital, Manatuck Hill Partners, Jabre Capital Partners also have long positions in this stock, as of September 30. Although gold hasn’t done well recently due to increasing inflation expectations, it could do well in the long run if inflation gets out of control or if geopolitical conflict arises.

Fitbit Inc. (NYSE:FIT) constituted 5.4% of Odey Asset Management’s portfolio as of September 30th 2016, with the fund reporting a holding of more than 5 million shares worth $75 million. Odey added more than 1.8 million shares in the quarter. Shares haven’t’ done well this year as the commoditization threat of Fitbit’s products weigh on the stock. The company recently made some waves by buying certain software assets from Pebble. Management hopes the acquistion will help Fitbit develop products faster and help it better retain its market-share against competitors. As per our database, 35 hedge funds held 11.2% of the company’s float as of September 30^th.

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) comprised 3.45% of Odey Asset Management’s portfolio as of September 30th 2016, up from just 0.75% in the previous quarter. Approximately 1.94 million shares worth $47.7 million was held by the fund as of September 30th 2016. Like other drug companies, Valeant sold off somewhat on Wednesday on the back of President-Elect Donald Trump’s remarks that he aims to bring down drug prices. If Trump succeeds, Valeant may have a more difficult turnaround ahead of it than previously expected. Many analysts on Wall Street don’t believe Trump will hurt the sector as much, however, due to potential offsetting regulatory and tax cuts. The number of funds as per our records, having Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) in their portfolio declined to 58 during the third quarter from 60 in the quarter earlier. The value of their holdings however, increased by 33% to $2.81 billion quarter on quarter.

Odey added 1.55 million shares of Ameria’s largest homebuilder, D.R. Horton, Inc. (NYSE:DHI), to its portfolio during the third quarter, bringing the fund’s total 13F holdings in the stock to 1.57 million shares valued at $47 million, as of September 2016. D.R. Horton reported an EPS of 75 cents per share for the quarter ending September 2016, missing the Street by 2 cents per share. Other top hedge fund holding positions in this stock include Edgar Wachenheim‘s Greenhaven Associates, Robert Hockett’s Covalent Capital Partners, Ken Heebner’s Capital Growth Management and Ross Margolies’s Stelliam Investment Management. Although interest rates are expected to rise, a strong economy could potentially ensure brisk demand.

Last but not least, Odey increased its position in Facebook Inc (NASDAQ:FB) by over 300% in the third quarter to 274,758 shares at the end of September. Facebook Inc (NASDAQ:FB) reported a strong third quarter with revenues increasing to $7 billion for the quarter ending September 2016 up from $6.4 billion in the quarter earlier. Earnings per share also increased to 82 cents from 71 cents during the same time. Of the 742 elite funds we track, 149 funds owned $16.28 billion of Facebook Inc (NASDAQ:FB) and accounted for 4.70% of the float on September 30, versus 148 funds and $15.24 billion respectively on June 30.

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