Billionaire Steve Cohen’s Big New Bets On Netflix (NFLX), ConocoPhillips (COP) Plus Other Top Holdings

Famous for being an avid art collector, Steven Cohen was crowned the Hedge Fund King by the Wall Street Journal in 2006, only to fall out of grace several years later as his fund, SAC Capital, pleaded guilty to insider trading violations and agreed to close its doors for outsiders. Cohen himself escaped mostly unscathed, although he is banned from managing outside money until 2018. He closed SAC Capital and founded Point72 Asset Management as a family office to manage his own fortune. The fund’s equity portfolio carried an estimated value of $13 billion at the end of the first quarter, spread across a number of sectors. The fund’s previous top 5 positions were shaken up over the course of the first quarter and in this article we’ll take a look at the new hierarchy.

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Big Bet On Energy

First up is ConocoPhillips (NYSE:COP), a new addition to Point72 Asset Management’s equity portfolio. During the first quarter, the fund amassed 4.31 million shares of the energy company, which were valued at $173 million at the end of March. The slump in oil prices has prompted the management of ConocoPhillips (NYSE:COP) to undertake some painful measures to restructure its cost structure. Analysts at Deutsche Bank have recently declared the stock as “underappreciated” as they reiterated their ‘Buy’ rating and have set a price target of $62 per share, which implies an upside potential of 43%. Deutsche Bank’s Ryan Todd believes the market has not appreciated the company’s efforts to become the “lowest breakeven (capex + dividend) operator” among its peers, according to an investor note. In addition, Todd noted that ConocoPhillips (NYSE:COP) has a “stable multi-year production outlook” and “a strong commitment to return excess cash to shareholders.” Israel Englander‘s Millennium Management has also reported a fresh position in the stock, which amounts to 4.32 million shares.

Trims Exposure To Zoetis

Steven Cohen decided to reduce his fund’s exposure to Zoetis Inc (NYSE:ZTS) amid a hefty 20% drop in the stock price during the first six weeks of the year. According to its latest 13F filing, the fund now holds 3.94 million shares of the animal medicines company, worth roughly $174 million. Although it reported an $1.85 billion stake in Zoetis Inc (NYSE:ZTS) at the end of the quarter, which amounted to 41.8 million shares, Bill Ackman‘s Pershing Square later issued a filing that revealed the sale of 16.85 million shares. The fund now holds 24.97 million shares which account for 5.0% of the company’s outstanding stock. In a letter to investors, Ackman said that they remain to be pleased with Zoetis’ management and unloaded shares for portfolio management reasons. Pershing Square first reported the stake in November 2014 and at the time of the new filing, Zoetis Inc (NYSE:ZTS) shares were up by approximately 16%. The stock is currently trading at a trailing P/E multiple of 62 and its forward P/E of 21 suggests that investors expect the company to significantly increase its earnings over the next 18 months.

As Netflix, Inc. (NASDAQ:NFLX)’s shares tumbled by more than 30% between December and February, Point72 Asset Management used the opportunity to buy the stock on a dip and loaded itself up with roughly 1.82 million shares. The positions carried an estimated value of $186 million at the end of March and was the largest new stake established during the first quarter. Billionaire Chase Coleman is also keeping tabs, as his bet on Netflix, Inc. (NASDAQ:NFLX) accounts for 27% of Tiger Global Management’s equity portfolio. At the end of the first quarter, the fund held roughly 18 million shares valued at $1.84 billion. Netflix’s first quarter results were largely better than expected, as the digital video company posted earnings of $0.06 per share on the back of $1.96 billion in revenue, up by nearly 25% year-over-year. Analysts, in turn, were looking for $1.97 billion in revenue and earnings of $0.03 per share. Netflix, Inc. (NASDAQ:NFLX) reached a membership of 81 million subscribers, as it added 23 million in the US and 4.51 million internationally.

Not Buying the Google Frenzy?

Although there is great optimism about the prospects of Alphabet Inc (NASDAQ:GOOGL) in the hedge fund community, Steven Cohen decided to reduce his fund’s exposure to the stock. At the end of the first quarter, 155 elite funds disclosed a long position in Class A Google shares, up by one over the quarter, while the number of positions in Class C shares was unchanged at 142. Point72 Asset Management’s latest 13F filing shows a 32% reduction in its holding of Class A stock to 257,300 shares worth $196 million, while its holding of Class C shares was reduced to 34,000 shares valued at $25.3 million. Billionaire Andreas Halvorsen is also bullish on Alphabet Inc (NASDAQ:GOOGL), having increased his fund’s stake in the company. According to its latest 13F filing, Viking Global held 2.05 million Class A shares and 1.05 million Class C shares at the end of the quarter. Alphabet Inc (NASDAQ:GOOGL) has recently brought back to light its Project Ara and has announced that the first modular phones will be available next year. With the smartphone market nearing saturation and the upgrade cycle slowing down, investors see modular phones as a niche and Project Ara would allow Google to have a solid head start.

More Facebook!

The recent optimism surrounding Facebook Inc (NASDAQ:FB) has attracted a lot of hedge funds into establishing a long positions and the company surged to the second most popular stock among the hedge funds followed by Insider Monkey. At the end of the first quarter, the number of long hedge fund positions rose to 164 from 146 at the end of December. Cohen is also bullish on this stock, having boosted his fund’s stake by 82% to 2.32 million shares valued at $264 million. Facebook Inc (NASDAQ:FB) first quarter earnings easily topped analysts’ estimates, giving another boost to investor confidence. Revenues came in at $5.38 billion and earnings stood at $0.77 per share, above the consensus of $0.62 per share on the back of $5.26 billion in revenue. The company also announced a proposal to create new class C shares. Shareholders would get two Class C shares for every Class A or Class B shares held, which would allow founder and CEO Mark Zuckerberg to sell some of his shares without diminishing his grip on the business. Andreas Halvorsen has also decided to bet big on Facebook Inc (NASDAQ:FB) and his fund, Viking Global, reported a fresh stake in the company at the end of the quarter, which amounts to 20.1 million shares worth $2.29 billion.

Disclosure: none.