Sunedison Inc (SUNE), Alibaba Group Holding Ltd (BABA): Indus Capital Partners Focuses on Tech in Q2

Indus Capital Partners is a hedge fund founded by former employees of George Soros’ Soros Fund Management David Kowitz and Sheldon Kasowitz. It is focused on Asian markets, but also invests in US Securities and has an equity portfolio valued at $507.76 million. Indus Capital Partners employs a long-short strategy and almost a half of its equity portfolio is represented by the Technology sector. As of the end of March, the top picks of Indus Capital Partners are Sunedison Inc (NYSE:SUNE), Alibaba Group Holding Ltd (NYSE:BABA) and Herbalife Ltd. (NYSE:HLF).

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 Following the activity of some of the greatest stock pickers is of particular interest to us, because it helps us to build a portfolio from their most popular small-cap picks which has beaten the market by more than 80 percentage points during the last 2.5 years and returned over 137%. While the general opinion is that following the most popular picks among hedge funds can help an investor to outperform the market, we have designed a system that can do that with an even higher margin. The focus of our strategy are stocks from the small-cap space and every quarter we pick 15 companies that are the most popular among the funds from our database (read more details about why we follow hedge funds).

The top holding of Indus Capital is represented by Sunedison Inc (NYSE: SUNE), a global solar energy company, in which the fund holds 5.59 million shares worth $134.20 million. For the current year, Sunedison Inc (NYSE:SUNE) expects that Unlevered Annualized Cash Available for Distribution (CAFD) for retained Megawatts (MW) will be somewhere between $275 and $325 million, while retained MW are expected in the range of 1,840 and 2,000. Among the investors we track, David Einhorn’s Greenlight Capital is the largest shareholders with 24.95 million shares of  Sunedison Inc (NYSE:SUNE), valued at $598.89 million, which is the third-largest stake in its equity portfolio.

In  Alibaba Group Holding Ltd (NYSE:BABA), Indus Capital Partners revealed holding 769,780 shares with a value of $64.08 million. The stock of Alibaba Group Holding Ltd (NYSE:BABA) plunged at the beginning of 2015, after disappointing financial results for the fourth quarter, and is currently down by 12.70% year-to-date. However, it rebounded slightly after strong financial results for the first three months of the year with revenue advancing by 45% on the year to $2.80 billion, although diluted EPS fell by an annual 53% to $0.18. Among other shareholders of Alibaba Group Holding Ltd (NYSE:BABA) are Andreas Halvorsen’s Viking Global and Chase Coleman’s Tiger Global Management, which both raised their stakes by 88% and 16% respectively to 6.94 million shares and 6.69 million shares respectively. On the other hand, Dan Loeb’s Third Point sold out its entire position that previously contained 10.0 million shares.

Herbalife Ltd. (NYSE:HLF) represents the third-largest position in Indus Capital Partners’ equity portfolio, which contains 634,759 shares valued at $27.14 million. During the first three months of 2015, Indus surged its position in the company by more than 200% as the stock advanced by more than 13%. Recently, the global nutrition company cleared some ground in a class action lawsuit as a federal judge approved a settlement of around $17.5 million. Herbalife Ltd. (NYSE:HLF) still remains under investigation from the Federal Trade Commission regarding its business practices that are alleged to be a pyramid scheme, but the settlement helped to convince some investors that Herbalife will be cleared eventually. Billionaire Carl Icahn is one of the investors bullish on Herbalife Ltd. (NYSE:HLF), holding 17.0 million shares.

Disclosure: none