Daniel Benton’s Andor Capital Management has recently filed its 13F with the SEC for the second quarter. Andor is a tech-focused fund and the sector amasses more than a half of its $1.08 billion equity portfolio. According to the filing, Andor held 28 long positions at the end of June, while its top 10 holdings accounted for around 70% of the total portfolio value. In this article, we will take a closer look at Andor’s top three picks, which include Tesla Motors Inc (NASDAQ:TSLA), Avago Technologies Ltd (NASDAQ:AVGO), and Apple Inc. (NASDAQ:AAPL).
Daniel Benton is a former employee of Art Samberg’s Pequot Capital Management and he founded Andor Capital Management in 2001 together with his colleague Christopher James. James left Andor in 2004 and launched his own firm Partner Fund Management. The long/short fund has had solid returns from its tech picks since its inception, but shut down during the financial crisis in 2008.
We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012, while their 15 most popular small-cap picks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated a double-digit annual alpha simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and our strategy has managed to return 123% since then, beating the S&P 500 ETF (SPY) by around 65 percentage points (see more details here).
The electric car maker Tesla Motors Inc (NASDAQ:TSLA) represents Andor Capital Management’s largest holding, which contains 1.0 million shares valued at $268.26 million, accounting for almost 25% of the total equity portfolio. Tesla’s stock has advanced by more than 17% since the beginning of the year. In its latest financial results, Tesla Motors Inc (NASDAQ:TSLA) posted earnings of $0.48 per share and revenue of $1.2 billion, which were slightly above estimates. However, the company also lowered its delivery guidance to the range between 50,000 and 55,000 units. In addition, last week, Tesla announced a stock offering worth $500 million and plans to use the proceeds to accelerate its growth in the domestic and international markets. Andor is the largest shareholder of Tesla Motors Inc (NASDAQ:TSLA) in our database, followed by Dmitry Balyasny’s Balyasny Asset Management, which cut its stake by 27% on the quarter to 310,700 shares. However, many funds from our database also own “Call” and “Put” options underlying shares of Tesla.
With 625,000 shares valued at $83.08 million, Avago Technologies Ltd (NASDAQ:AVGO) jumped to the second spot in Andor’s equity portfolio, after the investor added 275,000 shares during the second quarter. Avago Technologies Ltd (NASDAQ:AVGO) is a $32 billion company that operates in the wireless communications market. The stock has jumped by 21% year-to-date and trails a P/E of 49.20, which is significantly above the Semiconductor industry average of 18.00. The stock gained a significant level of popularity among hedge funds we track as 71 investors disclosed holding $4.71 billion worth of stock as of the end of June, compared to 46 funds holding $3.10 billion worth of stock a quarter earlier. In this way, the funds we track held more than 13% of the company’s stock at the end of the second quarter. One of the most bullish investors is Andreas Halvorsen‘s Viking Global, which has initiated a stake in Avago Technologies Ltd (NASDAQ:AVGO) that contains 4.77 million shares, according to its latest 13F.
Moreover, Andor doubled its position in Apple Inc. (NASDAQ:AAPL) to 500,000 shares worth $62.71 million as of the end of June. The company’s stock has lost more than 11% since July 21, when the company reported its latest quarterly results, which mostly came above the estimates, but the iPhone sales missed the expectations. Investors are also concerned with Apple Inc. (NASDAQ:AAPL)’s sales in China, as it loses market share in the country aside from the fact that China is currently struggling with a significant slump of its equity markets. Nevertheless, at the end of June, Apple was the second-most popular stock, with 142 funds from our database holding $2.13 billion worth of stock. The largest shareholder of Apple Inc. (NASDAQ:AAPL) in our database is billionaire Carl Icahn, which owns 52.76 million shares, followed by Ken Fisher’s Fisher Asset Management, which holds 11.01 million shares.