Apple Inc. (AAPL), Alibaba Group Holding Ltd (BABA): Hedge Fund Think Investments Betting on Tech

Think Investments is a San Francisco-based hedge fund that uses long/short strategy for its investments, managed by a former analyst Shashin Shah. In the current round of 13F filings, Shashin Shah revealed an equity portfolio valued at $270.64 million, with a total of 11 long positions. The fund’s largest holdings are represented by Apple Inc. (NASDAQ:AAPL), Alibaba Group Holding Ltd (NYSE:BABA), Masonite International Corp (NYSE:DOOR), Autohome Inc (ADR) (NYSE:ATHM) and Six Flags Entertainment Corp (NYSE:SIX).

Alibaba Group Holding Ltd (NYSE:BABA), sign on a building, logo, share, stock, New York, offering

Christopher Penler / Shutterstock.com

We pay attention to hedge funds and prominent investors because historically, a select group of their top stock picks (their small-cap picks) delivered superior risk-adjusted returns. Through empirical studies of equity portfolios of the hedge funds from our database, we determined that the 50 most popular large-cap stocks among them had a monthly alpha of about six basis points per month, while the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points between 1999 and 2012. Moreover, since we launched our strategy in August 2012, we managed to obtain returns of more than 139% vs. a less than 60% gain for the S&P 500 ETF (read more details here).

On the first spot is Apple Inc. (NASDAQ:AAPL), one of the most profitable businesses ever, in which investor disclosed a $45.07 million position that contains 362,000 shares, unchanged from the previous quarter. Apple Inc.’s stock inched up by 18% since the beginning of the year and gained more than 40% over the past calendar year. The $750.5 billion tech-giant announced its strong financial results for the second quarter of fiscal year 2015, an increase in net income by 32.73% to $13.57 billion, or $2.33 diluted EPS. Billionaire Carl Icahn is the largest shareholder in Apple Inc. (NASDAQ:AAPL) owning 52.76 million shares, valued at $6.57 billion, which represents 20.48%. In recent days, he issued an open letter to the company’s CEO Tim Cook, in which he expressed his beliefs that the company’s shares are undervalued and stated a price target of $240 per share.

Shashin Shah’s hedge fund increased its stake in Alibaba Group Holding Ltd (NYSE:BABA) by 16.22% to 448,600 shares valued at $37.34 million. The China-based global leader in online and mobile commerce in retail and wholesale trade, reported for the quarter of 2015 a growth in revenue by 45%, compared to the same period of prior year. The company’s net income has fell by 49% to $463 million during the quarter, being primarily affected by the decrease in income from operations. Another large hedge funds that still remain bullish on  Alibaba Group Holding Ltd (NYSE:BABA) are Rob Citrone’s Discovery Capital Management and Andreas Halvorsen’s Viking Global holding 8.77 million shares and 6.94 million shares, respectively.