There were 659 hedge funds in our system whose 13F portfolios on June 30 consisted of at least 5 long positions in billion-dollar companies. Of those 659 funds, an impressive 627 of them delivered positive returns during the third-quarter from their long positions in those stocks, based on the size of those positions on June 30. All told, their long picks in billion-dollar companies averaged 8.3% returns for the quarter, well above the S&P 500 ETFs’ 3.3% figure. Nonetheless, hedge funds continue to disappoint their investors for the most part, as redemptions have hit the industry hard of late. That can be chalked up to their high fees and the underperformance on the short-side of their portfolios, which provide downside protection but have dragged down overall returns. We recommend investors consider hedge funds’ long stock picks for their market-beating potential and will share four of them in this article, which were in the portfolio of Calixto Global Investors on June 30. They are MicroStrategy Incorporated (NASDAQ:MSTR), Gray Television, Inc. (NYSE:GTN), Sirius XM Holdings Inc. (NASDAQ:SIRI), and HubSpot Inc (NYSE:HUBS).
Calixto Global Investors is a Florida-based hedge fund run by Eduardo Costa. Calixto’s equity portfolio has a total worth of over $183.38 million as of June 30. The fund returned 12.03% in the quarter ended September 30 from its 9 long stakes in companies having a market cap of at least $1 billion. We believe that investors should pay attention to hedge funds’ top picks for a chance to beat the market like Costa’s stock picks did in Q3, so let’s have a look at those aforementioned picks and see how they’ve performed.
Calixto Global Investors grew its holding in MicroStrategy Incorporated (NASDAQ:MSTR) by 64% in the second quarter, ending the period with 181,368 shares of the company which had a total worth of over $31.75 million. The stock lost 4.3% during the third quarter. MicroStrategy Incorporated (NASDAQ:MSTR) saw a decrease in enthusiasm from smart money in Q2, being in 26 hedge funds’ portfolios at the end of June, down by 2 quarter-over-quarter. When looking at the institutional investors followed by Insider Monkey, Eminence Capital, managed by Ricky Sandler, holds the most valuable position in MicroStrategy Incorporated (NASDAQ:MSTR) ($125.7 million position). The second largest stake is held by Glenhill Advisors, led by Glenn J. Krevlin ($94.7 million position). Remaining members of the smart money with similar optimism consist of First Eagle Investment Management and Alex Sacerdote’s Whale Rock Capital Management.
Calixto Global Investors upped its stake in Gray Television, Inc. (NYSE:GTN) by 31% in the second quarter as the fund started the third quarter with over 2.42 million shares of the company. The aggregate worth of these shares was over $26.32 million at the end of June. However, the decision was a rare misstep for the fund, as the stock lost 4.5% in the third quarter. Heading into the third quarter of 2016, a total of 20 of the hedge funds that we follow held long positions in this stock, down by 20% from the first quarter of 2016, as hedge fund sentiment accurately predicted the stock’s movement next quarter. Whetstone Capital Advisors with a $14 million position stands out as one of the top shareholders in the company. Other investors bullish on the company included Citadel Investment Group, Columbus Circle Investors, and Scopus Asset Management.
We’ll check out two more of the fund’s stock picks on the next page.