EMS Capital is a New York City-based hedge fund managed by Edmond M. Safra, with more than $1.4 billion of assets under management and an equity portfolio worth more than half a billion dollars, mainly focused on information technology (46%) and consumer discretionary (37.8%) stocks. Let’s take a look at the fund’s top positions for the second quarter of 2014, Facebook Inc (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX), Tripadvisor Inc (NASDAQ:TRIP), in order to find out if any of them deserve further research.
First off is Facebook Inc (NASDAQ:FB), the $195 billion market cap social networking company. Despite a 16% decrease in the fund’s stake, the company retained its front-runner position for the fourth consecutive quarter. EMS Capital last disclosed ownership of 845,000 shares of Class A stock, worth more than $56 million. Much larger is Philippe Laffont’s Coatue Management’s bet. The fund holds the largest long position at Facebook Inc (NASDAQ:FB) – amongst the funds that we keep track of, with 5.87 million shares worth more than $395 million.
Despite its high valuation (is Facebook Overvalued?), reasons to feel bullish about Facebook Inc (NASDAQ:FB) abound. However, opinion amongst hedge funds and analysts seems divided. While some continue to buy (and recommend buying) Facebook’s stock, others seem to believe that it would be better to sell while prices are so high, and seek to invest later, when prices drop. Nonetheless, this last scenario does not seem particularly likely; analysts expect the stock price to continue to rise, at least another 13% over the next year.
Netflix, Inc. (NASDAQ:NFLX) came in second. The $28.7 billion market cap internet television network witnessed an 8% increase in EMS Capital’s position. The fund now owns more than 108,000 shares, worth over $47 million.
Netflix, Inc. (NASDAQ:NFLX)’s stock traded at relatively low prices over the second quarter, especially during April, so one can understand why hedge funds have been buying the stock –which has already recuperated more than 7% of its price since the end of the quarter. Once again Philippe Laffont’s Coatue Management is the largest hedge fund shareholder of record, and also took advantage of the low stock prices to increase its participation in the company by 35%. These funds are probably betting on Netflix, Inc. (NASDAQ:NFLX)’s superior subscription business model, its international expansion (and the consequent scale advantages derived from it), and on the growth potential of the video-on-demand industry.
Last in this list is Tripadvisor Inc (NASDAQ:TRIP), a $14 billion market cap online travel company to which EMS Capital boosted its exposure by 30% over the second quarter. The fund now owns 390,000 shares of Common Stock. The largest hedge fund shareholder of record, Panayotis Takis Sparaggis’ Alkeon Capital Management, also raised its stake in Tripadvisor Inc (NASDAQ:TRIP), by 9%, and now owns 2.66 million shares, worth more than $280 million.
One of the major events that took place over the second quarter, and could have motivated the aforementioned bullishness is Tripadvisor Inc (NASDAQ:TRIP)’s acquisition of LaFourchette, one of the leading Internet and mobile restaurant reservation systems in France and Spain. The purchase was aimed at attracting more users and better monetizing its restaurant traffic.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned.