Senator Investment Group was founded in 2008 by former Merrill Lynch co-workers Douglas Silverman and Alexander Klabin. The New York-based hedgie utilizes long/short and event-driven strategies for its fund and holds a $10.42 billion public equity portfolio. That portfolio is well-diversified, with consumer discretionary, finance, and healthcare stocks getting slightly more capital than the stocks of other sectors. At the same time, but on another street in Manhattan is hedge fund Third Point Management led by its founder Dan Loeb. The billionaire’s fund was founded in 1995 and has assets under management of roughly $18 billion and a public equity portfolio of $10.82 billion as of March 31, with its largest stakes in healthcare, technology, and finance. After analyzing the portfolios of the two large funds, we discovered a number of notable stocks in which both hold positions. Those stocks are Allergan PLC (NYSE:AGN), Anheuser Busch Inbev SA (ADR) (NYSE:BUD), Dollar General Corp. (NYSE:DG), Delta Air Lines, Inc. (NYSE:DAL), Ally Financial Inc (NYSE:ALLY), Constellation Brands, Inc. (NYSE:STZ), Yum! Brands, Inc. (NYSE:YUM), Liberty Global plc – Class C Ordinary Shares (NASDAQ:LBTYK), NXP Semiconductors NV (NASDAQ:NXPI), Mohawk Industries, Inc. (NYSE:MHK), J M Smucker Co (NYSE:SJM) and IAC/InterActiveCorp (NASDAQ:IACI), and we’ll study the first three on that list in more detail.
In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds actually managed to outperform the market on the long side of their portfolio, proving they haven’t lost their stock picking touch (and we only track the best of the best of this group). In fact, the 15 most popular stocks among the elite hedge funds we track has returned 142% since the end of August 2012 and beat en the S&P 500 Index by 83 percentage points (see the details here). This is a huge margin, which is why hedge funds’ recent purchases are a strong indicator that should be heeded.
Follow Doug Silverman And Alexander Klabin's Senator Investment Group
In Allergan PLC (NYSE:AGN), which until two weeks ago was traded as Actavis Plc (NYSE:ACT), Dan Loeb increased his stake by 4% during the first quarter to 3.58 million shares, while Douglas Silverman and Alexander Klabin decreased their stake by 17% to 1.70 million shares. Allergan PLC, which also has the attention of both Bill Ackman and Scott Ferguson, has returned 21.5% year-to-date and is up by 39.5% during the last year. Allergan Plc has been having a busy spring, with the merger between Actavis Plc and Allergan itself, along with the news last week regarding a possible buyout of Kythera Biopharmaceuticals Inc (NASDAQ:KYTH). Allergan CEO Brent Saunders says that no deals involving a sale of that company’s generic drug business will be considered, since those are important parts of its portfolio. The comment was made as a response to advice from investment banks to spin-off the generic drug businesses. Nehal Chopra, representing Ratan Capital Group decreased her stake in Allergan during the quarter by 1%, leaving her with 393,193 shares.
In the Belgium brewer Anheuser Busch Inbev SA (ADR) (NYSE:BUD), Silverman and Klabin opened a position of 2.00 million shares during the quarter, while Dan Loeb decreased his stake by 12%, also leaving him with 2.00 million shares. Anheuser Busch, founded in 1852, has roughly 200 different brands ans has returned 12.6% year-to-date, though only 9.9% during the last year. The earnings reported for the first quarter showed an increase in profits to $2.68 billion from $1.37 billion, impressing the market even if its revenues decreased slightly. Rumors earlier this spring that London-based Diageo plc (ADR) (NYSE:DEO) was about to acquire Anheuser Busch Inbev SA (ADR) (NYSE:BUD) haven’t gained any traction and seem to be nothing more than rumors at this point. James Dinan‘s York Capital Management increased its stake in the beer producer during the first quarter by 71%, leaving it with 2.70 million shares with a value of $329.33 million.
Follow Dan Loeb's Third Point
Finally, let us turn our attention to Tennessee-based variety store and discount retailer Dollar General Corp. (NYSE:DG), in which Dan Loeb left his 4.00 million shares untouched during the first quarter, while Silverman and Klabin increased their stake by 25% to 3.00 million shares. Dollar General is up by 10.9% year-to-date and 27.1% during the last year and is currently trading around its all time high. The earnings per share for the first quarter increased by 16.7% compared to the same quarter the year before, and revenue growth was above the industry average. Ken Griffin increased his stake in Dollar General Corp. (NYSE:DG) by 193% to 7.21 million shares during the first quarter.
Disclosure: None
