(Corrects paragraph 11 to “fourth quarter,” from “second quarter”)
By Svea Herbst-Bayliss and Sam Forgione
NEW YORK, Feb 17 (Reuters) - Top U.S. hedge fund management firms, including David Einhorn’s Greenlight Capital and Philippe Laffont’s Coatue Management, cut their stakes in Apple Inc during the fourth quarter, ahead of the iPhone maker’s strong rally this year, according to regulatory filings.
Apple was a big winner in 2014, with its shares racking up returns of 37.72 percent. The company’s stock is up more than 16 percent in the year to date and hit an intraday record on Tuesday of $129.45 per share. Last week, its stock market value ballooned above $700 billion, bigger than Switzerland’s gross domestic product.
Although Apple is the biggest position in Coatue Management’s portfolio, the firm sold 1.7 million shares at the end of the quarter, or 15 percent of its stake in the company, leaving it with 8.9 million shares, according to a regulatory filing on Tuesday.
In a filing on Friday, Greenlight cut Apple holdings by 6.2 percent to 8.6 million shares during the quarter.
Eric Mandelblatt’s Soroban Capital Partners sold 4.3 million Apple call options, liquidating the fund’s position. And David Tepper’s Appaloosa Management hedge fund revealed that it had dissolved its stake in Apple.
Last week, billionaire activist investor Carl Icahn said the technology company’s shares should be trading at $216 apiece, equivalent to a market capitalization of about $1.26 trillion.
The moves by Greenlight and Coatue were revealed in quarterly disclosures of manager stock holdings, known as 13F filings, with the U.S. Securities and Exchange Commission. They are of great interest to investors trying to divine a pattern in what savvy traders are selling and buying.
But relying on the filings to develop an investment strategy comes with some peril because the disclosures are backward-looking and come out 45 days after the end of each quarter.
Still, the filings offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side.
The filings do not disclose short positions, or bets that a stock will fall in price. As a result, the public filings do not always present a complete picture of a management firm’s stock holdings.
The following are some of the hot stocks and sectors in which hedge fund managers either took new positions or exited existing positions in the fourth quarter.
Coatue Management opened a new position, buying 964,155 shares, as the pharmaceutical company Actavis Plc won the high-stakes battle to buy Botox maker Allergan Inc.
Daniel Loeb’s Third Point upped its stake by 20 percent to 3.5 million shares. But Neil Chriss’ Hutchin Hill cut its position by 13 percent, selling 17,201 shares to own 28.3 million at the end of the quarter.
Activist investor ValueAct bought 2.9 million shares to own 8.2 million at the end of the quarter.
The biotechnology company is being pressured by hedge fund investor Daniel Loeb to break itself apart and has seen its share price rise in the last quarter.
Alex Denner, who now runs Sarissa Capital after working for Carl Icahn, upped his stake by 165 percent to 50.6 million shares.
Farallon Capital Management put on a new position in the oilfield services company, which will be bought by rival Halliburton Co, buying 3.5 million shares.
Activist fund ValueAct Capital, which like Farallon is located in San Francisco, took an even bigger new position, buying up 14.9 million shares. ValueAct also took a 20.9 million-share stake in Halliburton.
John Burbank’s Passport Capital, which made money early this year by betting against energy exchange-traded funds, added a position in Bank of America Corp, buying 2.8 million shares.
Jon Jacobson’s Highfields Capital upped its stake in eBay Inc by 39 percent when it added 1.8 million shares to own 6.5 million at the quarter’s end. Third Point bought 5.5 million shares to own 10 million shares.
Tiger Consumer cut its holdings by 28 percent to 854,980 shares. Aaron Cowen’s Suvretta Capital bought 629,600 shares, putting on a new position.
Caxton Associates made a new bet, buying 1.2 million shares in the automaker.
Coatue raised its stake in the European cable operator by 34 percent and bought 1.4 million shares to own 5.6 million shares. Tiger Consumer sold 527,956 shares, leaving it with 1.5 million shares.
Coatue cut its position by 13 percent, selling 287,415 shares to own 1.8 million shares. Tiger Consumer, however, opened a new position, buying 182,098 shares.
Highfields Capital put on a new position in the high-end electric car maker, buying 91,296 shares. Tesla shares fell late last year but climbed anew in early 2015.
Third Point nearly doubled its stake by buying 5 million shares to own 11.2 million.
The solar energy company saw its shares drop late last year but recover in the last months.
Passport Capital slashed its position by 81 percent, selling 6 million shares to own 1.4 million at the end of the quarter.
The animal health company, which made headlines when activist investors William Ackman and Scott Ferguson bought big stakes, also saw new interest from other hedge funds. Highfields Capital bought 252,000 shares. (Reporting by Svea Herbst-Bayliss and Sam Forgione; Compiled By Jennifer Ablan; Editing by Jonathan Oatis)