Billionaire Louis Bacon’s Favorite Stocks Include Amazon, Alphabet & Others

Louis Bacon is the founder of Moore Capital Management and is one of the most famous traders of the past two decades. His personal wealth is more than $1.5 billion and Bacon has donated considerable money to charity too. Although Bacon is best known for his macro investing, his fund also has an equity portfolio value of around $2.5 billion as of March 2016. Given Bacon’s billionaire status, let’s take a closer look at his fund’s top moves for the first quarter.

MOORE GLOBAL INVESTMENTS

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

Louis Bacon
Louis Bacon
Moore Global Investments

#5 Alibaba Group Holding Ltd (NYSE:BABA)

– Shares held (as of March 31): 420,000
– Total Value (as of March 31): $33.19 million
– Percent of Portfolio (as of March 31): 1.34%

Moore Capital cut its holding in Alibaba Group Holding Ltd (NYSE:BABA) by 48% in the first quarter to 420,000 shares as the macro picture for China remains muddy. Although China’s crude consumption is strong, other economic indicators show a sharp slowdown in the country. George Soros, one of Bacon’s contemporaries, has said that China could undergo a financial crisis similar to the one that the United States underwent beginning in 2008. Given that Alibaba Group Holding Ltd (NYSE:BABA) depends on China for most of its revenues, many investors don’t think the company can do well without China’s economy performing strongly. Shares of Alibaba are off by around 2.7% year-to-date.

#4 Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)

– Shares held (as of March 31): 975,000
– Total Value (as of March 31): $43.15 million
– Percent of Portfolio (as of March 31): 1.74%

Like it did with Alibaba, Moore Capital cut its stake in Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) by 48% in the first quarter. Ctrip.com is a leading provider of travel services in China. Given that travel is highly economically sensitive, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)’s growth and earnings could be negatively affected if China’s economy undergoes a hard landing. Ctrip’s dollar-denominated earnings could also decline if the Chinese Yuan continues to depreciate against the dollar. For a growth stock like Ctrip.com, a sharp slowdown in growth could send the stock considerably lower. If growth investors leave, there might not be any value buyers for a while. Ctrip.com isn’t a value stock yet with a forward P/E of 63. Billionaire Ken Fisher’s Fisher Asset Management was a top shareholder of Ctrip.com International at the end of March.

Follow Trip.com Group Limited (NASDAQ:TCOM)