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Should Investors Follow Steve Cohen’s Move On This Chemical Company?

Olin Corporation (NYSE:OLN) is still an attractive investment for Steven Cohen or so suggests his fund’s latest filing with the Securities and Exchange Commission. Point72 Asset Management has disclosed a further increase in its holding of the stock, adding 894,539 shares to its previous stake and taking it to 4.91 million shares or 6.3% of the company’s common stock. Phill Gross and Robert Atchinson‘s Adage Capital Management are among a host of other hedge funds that are betting heavily on Olin.


A legend in the hedge fund world, Steven Cohen started as a trader in Gruntal & Co’s options arbitrage division before making the move to strike out on his own. He started SAC Capital in 1992 with an initial investment of $20 million coming out of his own pocket and grew it into a major funds manager with $14 billion in assets under management. Following charges of insider trading, SAC Capital pleaded guilty for failing to prevent insider trading and agreed to pay a $1.2 billion fine and stop managing money for investors. As a result, Cohen started Point72 Asset Management, a family office where he manages his own fortune and those of his employees and their families. His major plays include several oil and energy stocks, as well as two tech giants:, Inc. (NASDAQ:AMZN) and Google Inc (NASDAQ:GOOGL). According to its latest 13F filing, Point72 holds 536,000 shares of Amazon, up by 63% during the second quarter of 2015, while its stake in Google was increased by 313% to amass 303,800 Class A shares. The fund’s largest equity position continues to be EOG Resources Inc (NYSE:EOG), an oil and gas exploration company with a global presence. Cohen was busy buying this stock during the second quarter, ending it with 2.8 million EOG shares in his portfolio.

Steve Cohen
Steve Cohen
Point72 Asset Management

Hedge funds have been underperforming the market for a very long time. However, this was mainly because of the huge fees that hedge funds charge as well as the poor performance of their short books. Hedge funds’ long positions performed actually better than the market. Small-cap stocks, activist targets, and spin offs were among the bright spots in hedge funds’ portfolios. For instance, the 15 most popular small-cap stocks among hedge funds outperformed the market by more than 60 percentage points since the end of August 2012, returning 118% (read the details here). This strategy also managed to beat the market by double digits annually in our back tests covering the 1999-2012 period.

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