Millennium Management is a global investment firm founded by Israel Englander in 1989. It employs a global multi-strategy investment approach, and manages more than $207 billion in assets. In its latest 13F filed with the SEC, the fund disclosed that, by the end of the first quarter of 2016, it held long equity positions valued at more than $40 billion and, while the stakes were very diversified, they had a slight focus on finance, information technology, healthcare and consumer discretionary stocks, which accounted for 16%, 14%, 13% and 12% of the equity portfolio, respectively. In this article, we will take a look into Millennium’s most relevant moves during the first quarter – understood as those positions that suffered a change of 25% or more.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
#5 American Electric Power Company Inc (NYSE:AEP)
– Number of shares owned by Millennium Management as of March 31: 3.45 Million
– Value of Millennium Management’s stake as of March 31: $229.7 Million
Let’s start with American Electric Power Company Inc (NYSE:AEP), which, following a 45% reduction in Mr. Englader’s exposure, fell from the fourth spot in his list to the ninth place during the January-March period. Despite the reduction, he remained one of the largest hedge fund shareholders of record, only outranked by Cliff Asness’ AQR Capital Management, which last disclosed ownership of 5.28 million shares of the company, following an 80% increase in its position. Shares of the public utilities company have lost roughly 2% since the second quarter started, mostly on the back of an Ohio Supreme Court ruling in mid-April, which rejected part of a fee the company wanted to impose to customers to support its transition into a competitive power market. Last week, the stock tumbled again on strong U.S. industrial production and homebuilding figures, which led to surging expectations of a rate hike.
#4 Facebook Inc (NASDAQ:FB)
– Number of shares owned by Millennium Management as of March 31: 2.04 Million
– Value of Millennium Management’s stake as of March 31: $233.4 Million
Next up is Facebook Inc (NASDAQ:FB), which also saw Millennium Management trim its exposure, by 42%, during the first quarter. While the stake remained significant in size, it didn’t put Millennium among the top 10 shareholders in our database. In fact, the largest stockholder among the funds that we track was Andreas Halvorsen’s Viking Global, which started a new position comprising more than 20.1 million shares at the end of March. The position, worth almost $2.3 billion, accounted for more than 10% of the fund’s total equity portfolio’s value. Shares of Facebook have gained 13% since the beginning of the year, mostly driven by the company reporting better-than-expected results. For the first quarter, the social media behemoth posted EPS of $0.77 on revenue of $5.38 billion, beating the Street’s consensus by $0.15 and $120 million, respectively. Last week, CEO Mark Zuckerberg met with conservative leaders to address allegations that the site is politically biased. After the conclave, the Wall Street Journal reported that, “session several attendees said [the meeting] was a productive start to a dialogue that should continue.” In a Facebook post, Zuckerberg assured: “I want to do everything I can to make sure our teams uphold the integrity of our products.”