Moore Global Investments was founded in 1989 by Louis Bacon, who employs a macro approach to stock picking and has built the firm into one of the largest hedge funds around, with more than $32 billion in assets under management. According to its latest 13F filing, Moore Capital’s equity portfolio carries a market value of $3.22 billion, after Louis Bacon embarked on a major overhaul of it during the fourth quarter, initiating 151 new positions and selling out of 146 former ones. Insider Monkey calculates a fund’s long stock picking skill by looking at the weighted average returns of its long positions in companies with a market cap that exceeds $1 billion, based on the size of those positions at the beginning of each quarter. Our analysis has yielded a loss of 4.4% for Moore Global Investments’ qualifying picks during 2015, while Eashwar Krishnan‘s Tybourne Capital Management, which held an equity portfolio with a similar value, registered a return of 23% during the same period. In this article we’ll take a look at the billionaire’s top picks heading into 2016, coming off his best quarter of 2015, when his 184 qualifying stock picks returned 5.4%.
We determine hedge fund sentiment by analyzing the equity portfolios of some of the best-performing hedge funds and institutional investors. Through extensive research, we have determined that the due diligence that these investors employ, as well as their long-term focus makes them perfect targets to emulate (read more details here).
We’ll start with Moore Global’s fifth-largest position, Citigroup Inc (NYSE:C). During the fourth quarter, Mr. Bacon increased his investment in the banking giant by a whooping 2,248% to amass 1.53 million shares valued at $78.9 million. For the fourth quarter, Citigroup Inc (NYSE:C) reported revenue of $18.64 billion and adjusted earnings of $1.06 per share, above analysts’ forecasts of $17.87 billion in revenue and earnings per share of $1.05. It was not enough, however, to stop the plunge of the stock, which is now down by 23% for the year. Boykin Curry is also bullish on Citigroup Inc (NYSE:C), having increased his holding by 3% during the quarter to 25.2 million shares valued at $1.31 billion at the end of December.
Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), one of Mr. Bacon’s new bets, made it into Moore Global’s top-five positions by the end of the quarter. According to its 13F filing, the fund held 1.9 million shares worth in excess of $88 million at the end of December. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is set to release its fourth quarter earnings on March 17 and investors are looking for revenue of $2.82 billion and a loss of $0.06 per share. The company’s recent spending spree, aimed at gaining market share and becoming a dominant player among Chinese travel agencies, has some investors worried, especially since the company has been taking on large amounts of debt to finance its investments in eLong, Inc. (ADR) (NASDAQ:LONG) and Qunar Cayman Islands Ltd (NASDAQ:QUNR). As a result, shares of Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) have tumbled by 9.3% since the start of the year.
Turn the page to take a look at Mr. Bacon’s top three equity bets for early 2016.