Was Cliff Asness Right to Bet Big on These Tech Stocks?

Billionaire Cliff Asness founded quant fund AQR Capital Management in 1998. Less than two decades later, AQR Capital has grown to have an equity portfolio of $50.44 billion and is one of the largest hedge funds in the world. Given the strong growth, AQR Capital must be doing something right. Let’s take a look at some of AQR’s tech picks, in which the investor has more than doubled his stakes during the second quarter and how they performed in the following three months.

AQR CAPITAL MANAGEMENT

At Insider Monkey, we track major investors like Asness, in order to identify actionable patterns and profit from their moves. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks lagged the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

Cliff Asness
Cliff Asness
AQR Capital Management

#6 Blackberry Ltd (NASDAQ:BBRY)

Shares held (as of June 30): 3.81 million
Total Value (as of June 30): $31.13 million
Percent Change from First Quarter: 103%

Blackberry Ltd (NASDAQ:BBRY)’s stock lost 25.1% in the third quarter as investors threw in the towel on CEO John Chen’s turnaround plan. Although Blackberry is free cash flow positive, its hardware revenues are contracting. Meanwhile Blackberry’s software, licensing, and services revenue isn’t growing as quickly as investors would like it to. The bulls look forward to Blackberry’s Priv phone launch to change things for the better. The Priv phone will be Blackberry’s first Android-based smartphone and has a slide-out keyboard. If Priv phone sales beat expectations, Blackberry shares could rally. Prem Watsa‘s Fairfax Financial Holdings owned 46.7 million shares at the end of the second quarter.

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