Zweig-DiMenna Associates Reduces Stake In Top Tech Holdings In Q2

Zweig-DiMenna Associates is a Connecticut-based long/short equity fund established by Joseph ‘Joe’ DiMenna in 1984, in partnership with his mentor, famous stock investor and financial analyst Martin Edward Zweig. Prior to founding Zweig-DiMenna Associates, DiMenna worked at Zweig Cos., which he joined in 1977 while still a student at Fairfield University’s Dolan School of Business. Zweig-Dimenna recently filed its 13F disclosing its equity positions as of June 30. According to the filing, Zweig-DiMenna Associates’ U.S. public equity portfolio was worth $1.81 billion at the end of June, significantly lower than the $2.39 billion that it was worth at the end of March. The filing revealed that at the end of June, Zweig-DiMenna Associates was most bullish on consumer discretionary and information technology stocks, which accounted for 27% and 20% of the fund’s equity portfolio respectively. In this article we are going to look to the fund’s largest tech holdings, which are Facebook Inc (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), and Alibaba Group Holding Ltd (NYSE:BABA).

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At Insider Monkey, we pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 123% since then and outperformed the S&P 500 Index by around 65 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Joe Dimenna
Joe Dimenna

Zweig-DiMenna Associates reduced its holdings in its top tech pick Facebook Inc (NASDAQ:FB) by 13% during the second quarter. At the end of June the fund owned 433,858 shares of the company, worth $37.21 million. Shares of the social networking giant have witnessed a consistent rise since mid-2013 and are up by more than 18% year-to-date. On July 29, the company reported better-than-expected second quarter earnings. EPS for the quarter came in at $0.50 on revenue of $4.04 billion, while Wall Street was expecting the company to report EPS of $0.47 on revenue of $3.99 billion. According to a study released by consulting firm Deloitte recently, Facebook contributed $29 billion to the global economy and supported around 660,000 jobs globally during 2014. According to recent reports, the company is also testing a new marketplace feature on its platform in the Sydney, Australia and Auckland, New Zealand markets, which will allow users to buy and sell products from fellow users. Apart from Zweig-DiMenna Associates, Donald Chiboucis‘ Columbus Circle Investors was another hedge fund that reduced its holding (by 9%) during the second quarter. At the end of June, Columbus Circle Investors owned 3.19 million shares of the company.