#3. Yum! Brands Inc. (NYSE:YUM)
– Shares Owned by Tairen Capital (as of June 30): 207,139
– Value of Tairen Capital’s Holding (as of June 30): $17.18 Million
The equity long/short hedge fund firm added a 207,139-share position in Yum! Brands Inc. (NYSE:YUM) to its portfolio during the April-to-June quarter, which was valued at $17.18 million on June 30. The owner of fast food chains KFC, Pizza Hut and Taco Bell plans to separate its China business into a separate company due to a series of food safety scandals that put massive pressure on sales in the country. Yum’s China division has 7,246 outlets, predominantly KFC and Pizza Hut Casual Dining restaurants. Fresh reports suggest that the fast-food giant’s sale of its China franchise recently came to a standstill after failing to agree on the sale price with the two main bidders. China-based private equity fund Primavera and Singapore’s wealth fund Temesek submitted offers for parts of Yum’s assets. The planned spin-off has a targeted completion date of around the end of October. Yum! Brands shares are up by 23% in 2016. Keith Meister’s Corvex Capital was the owner of 21.04 million shares of Yum! Brands Inc. (NYSE:YUM) at the end of the first quarter.
#2. Amazon.com Inc. (NASDAQ:AMZN)
– Shares Owned by Tairen Capital (as of June 30): 28,700
– Value of Tairen Capital’s Holding (as of June 30): $20.54 Million
Tairen Capital also snatched up a new stake of 28,700 shares of Amazon.com Inc. (NASDAQ:AMZN) during the second quarter, which was worth $20.54 million on June 30. The new stake accounted for 4.4% of the hedge fund’s U.S portfolio, which also includes several voluminous investments in exchange-traded funds and options positions, which we will not cover. Just recently, the world’s biggest online retailer reported its third consecutive quarter of record profit, with the company’s second quarter bottom-line increasing to $857 million from just $92 million posted a year earlier. The e-commerce giant’s net sales rose to $30.40 billion from $23.19 billion year-over-year, partially reflecting the strong performance of the company’s Amazon Web Services cloud computing division and an increase in subscriptions for its Prime loyalty program and video service. AWS revenue increased to $2.89 billion from $1.82 billion a year prior, with the unit remaining on track to meet the goal of reaching $10 billion in sales this year. Amazon shares are 11% in the green in 2016. Ken Fisher’s Fisher Asset Management cut its stake in Amazon.com Inc. (NASDAQ:AMZN) by 21% during the second quarter to 1.98 million shares.
#1. Alibaba Group Holding Ltd (NYSE:BABA)
– Shares Owned by Tairen Capital (as of June 30): 1.38 Million
– Value of Tairen Capital’s Holding (as of June 30): $110.10 Million
Alibaba Group Holding Ltd (NYSE:BABA) was the largest position in Tairen Capital’s pool of U.S.-traded holdings at the end of the June quarter, accounting for a whopping 23.6% of the fund’s equity portfolio. The Shanghai-based hedge fund upped its Alibaba stake by 1.29 million American Depositary Shares during the second quarter, to 1.38 million ADS’s. In early July, analysts at Oppenheimer raised their price target on the Chinese e-commerce giant to $110 from $100 and reiterated their ‘Outperform’ rating on it, saying that market participants are “massively underestimating” the company’s cloud computing arm AliCloud. Oppenheimer analysts anticipate a “revaluation of BABA similar to AMZN in 2015” (Amazon.com, Inc. (NASDAQ:AMZN) gained 146% in 2015). On the other hand, renowned short-seller Jim Chanos has voiced his short investment thesis on Alibaba, saying that the company’s accounting practices are “as alarming as Enron’s.” Alibaba ADS’s are up by 2% so far in 2016. Fisher Asset Managements owns 3.22 million ADS’s of Alibaba Group Holding Ltd (NYSE:BABA) as of the end of the second quarter.