The Morning Brief: Two Popular Hedge Fund Stocks Surge

April 28, 2017   Stephen Taub

Shares of Alphabet, the parent of Google, and Amazon.com soared in after-hours trading Thursday.

Two of the most popular hedge fund stocks that have propelled sharp rebounds for many long-short funds this year, especially the Tiger Management descendants, are signaling a great day for the markets heading into the final session of the month. Alphabet, the parent of Google, and Amazon.com each posted quarter revenues and earnings that easily beat expectations after the markets closed on Thursday. Both shares classes of Alphabet, as well as shares of Amazon.com, surged into the $900 range, a new high for all of them. One of the biggest winners is O. Andreas Halvorsen’s Viking Global Investors. At year-end, the two classes of Alphabet combined were its largest long position while Amazon.com was fourth. However, one big loser could be David Einhorn’s Greenlight Capital, which has been touting the shorting of its so-called Bubble Basket, which it has admitted in the past includes Amazon.com, among other stocks.

Shares of Alphabet’s two classes of stock surged more than 4 percent in after-hours trading. At year-end, the A shares were the third most popular stock among hedge funds while the C shares were the sixth most popular. In addition to Viking, the A shares were the third largest long of Valinor Management at year-end, while the C shares were the third largest U.S. long of David Tepper’s Appaloosa Management.

Shares of Amazon.com jumped nearly 4 percent in after-hours trading. It was the fifth most widely-held stock among hedge funds at year-end. It was the largest U.S. long of Tiger-related funds Discovery Capital Management and Tybourne Capital Management and the third largest U.S. long of Tiger Seed/Cub Tiger Global Management.

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Soroban Capital Partners reported that as of April 18 it owned 17.6 million shares of Praxair Inc., or 6.2 percent of the total outstanding. At year-end it owned 2.4 million shares of the industrial gases company. We won’t know for another two weeks or so how many shares Soroban held in the company at the end of the first quarter.

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Adage Capital Partners disclosed that as of April 18, it owned more than 1.5 million shares of Audentes Therapeutics Inc. or 5.62 percent of the total. At year-end, the hedge fund held just 442,000 shares of the biotechnology company working on developing new gene therapy treatments.


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