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.
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#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.
#3 Amazon.com, Inc. (NASDAQ:AMZN)
– Shares held (as of March 31): 78,500
– Total Value (as of March 31): $46.6 million
– Percent of Portfolio (as of March 31): 1.88%
Moore Capital trimmed its holding in Amazon.com, Inc. (NASDAQ:AMZN) by 48% from January 1 to March 31. Given that Amazon’s shares have surged over the last 12 months, Moore Capital could be taking some profits off the table. Amazon.com, Inc. (NASDAQ:AMZN)’s cloud service continues to dominate its peers, with first-quarter revenue of $2.57 billion, up 64% year-over-year. The division’s operating profit more than tripled from a year ago to $604 million. Given the large total market size of the market, Amazon’s Web Services segment could continue to outperform for several more years before the law of large numbers eventually slows it down. Venture Capitalist Chamath Palihapitiya thinks Amazon could be a $3 trillion company over the next 10 years, with Amazon Web Services accounting for roughly half of that value.
#2 Fidelity National Information Services (NYSE:FIS)
– Shares held (as of March 31): 825,000
– Total Value (as of March 31): $52.23 million
– Percent of Portfolio (as of March 31): 2.10%
Fidelity National Information Services (NYSE:FIS) was a new position in Moore Capital’s equity portfolio in the first quarter. The fund established a stake of 825,000 shares worth $52.23 million at the end of March. Analysts like the stock because Fidelity National Information Services (NYSE:FIS) trades at just 16x forward earnings estimates and synergies from the company’s SunGard acquisition could exceed expectations. The stock has also been a solid performer of late, having rallied over 20% year-to-date. Aside from Bacon’s fund, 48 other funds that Insider Monkey tracks also owned shares of the company at the end of the first quarter.
#1 Alphabet Inc (NASDAQ:GOOGL)
– Shares held (as of March 31): 166,000
– Total Value (as of March 31): $126.64 million
– Percent of Portfolio (as of March 31): 5.10%
Moore Capital raised its stake in Alphabet Inc (NASDAQ:GOOGL) by 80% in the first quarter to 166,000 shares. Although Alphabet Inc (NASDAQ:GOOGL) missed both top and bottom line expectations for its first quarter with EPS of $7.50 on sales of $20.26 billion versus estimates of $7.97 per share and $20.37 billion, respectively, many investors think the company is a good long-term holding because of the company’s nearly unassailable position as the leading search and mobile operating system provider. Although the transition to messaging bots and virtual reality might cause some short term financial misses along the way (as the company figures out how to add ads into the interfaces), Google’s world-class workforce and its leading position in AI make it a must-hold for many investors, including 155 elite funds at the end of March.