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Top Fund Managers in Q1: Risky Trades or Smart Stock Bets?

Tracey Ryniec
  • (0:20) - Exploring The 13F Filings
  • (1:30) - Learning From Fund Managers: Warren Buffett and Berkshire Hathaway
  • (5:30) - What To Learn From David Temper's Growth Investing 
  • (18:15) - David Einhorn's Down Performance: Value Investing
  • (21:00) - What Stocks Should You Be Watching?
  • (28:40) - Should You Be Following The Hedge Funds?
  • (37:00) - Episode Roundup: BABA, MU, STMP, JD, PCG, BIDU, SQ, GM, CMG, QSR, AMZN
  •             Podcast@Zacks.com

 

Welcome to Episode #178 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks Senior Strategist, Kevin Cook, to discuss what the top hedge fund managers were buying, or selling, in the first quarter of 2019.

Every year, Tracey and Kevin have discussed the 13-F filings, which money managers with over $100 million under management, must file with the SEC forty-five days after the end of the quarter. The 13-F reveals what stocks were bought, and sold, during the quarter.

Berkshire Hathaway Buys Amazon

The first big surprise, which was revealed by Warren Buffett himself ahead of the Berkshire Hathaway annual meeting, was that Berkshire added its first position in Amazon AMZN in the first quarter.

Berkshire bought almost $1 billion worth, which sounds like a lot but is only 0.43% of Berkshire’s portfolio, ranking it at 27th in the portfolio.

By comparison, Apple is now a 23.7% position in the portfolio worth $47 billion.

But unlike Apple, Amazon isn’t normally considered a value stock so this purchase was controversial, to say the least.

Making Bets on China

Who’s afraid of a trade war?

Not David Tepper of Appaloosa whose largest position continues to be Micron MU at 22.8% of his portfolio.

He also sold Alibaba BABA shares last year, only to buy them again in 2019. Is he that confident that a trade agreement is coming?

Is Concentration Paying Off?

While Tepper is concentrated in Micron, and Buffett is a believer in Apple, Bill Ackman at Pershing Square has gone all in on the consumer.

Ackman’s largest position is Chipotle CMG which is now 19.7% of his portfolio. That is followed in a close second by Restaurant Brands QSR at 17.8% and then Lowe’s at 13.6%.

That’s nearly 50% of his total portfolio in just 3 consumer names, but it has paid off as Chipotle shares are up 64% year-to-date.

But is that much concentration too risky, even for a professional investor?

Big fund managers made some other interesting bets in the first quarter that might leave you scratching your head.

Find out what those trades are and much more in this week’s podcast.

 [In full disclosure, the author of this article owns shares of AMZN in her personal portfolio.]

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
 
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
 
Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report
 
Micron Technology, Inc. (MU) : Free Stock Analysis Report
 
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