Hedge fund managers continued to flee stocks in the second quarter, but the smart money eyed several potential opportunities, with some placing huge bets on select stocks.
The top 10 hedge funds had aggregated equity holdings of $150 billion at quarter's end, up from $141 billion in the first quarter, while the total number of stock positions held by all 10 hedge fund managers fell to 399 from 408, according to S&P Global Market Intelligence, in its quarterly hedge fund tracker. The report analyzed Securities and Exchange Commission 13F filings by the 10 largest hedge funds by asset size to spotlight big buying and selling trends.
Stocks in the consumer discretionary sector were the most bought in the three months ending June 30, while the technology and health care sectors had the biggest net sells from the top hedge funds, the report said. The quarter saw buying in six of the 10 S&P sectors compared with net selling in nine of the 10 sectors in the first quarter.
The smart money warmed up to Charter Communications (CHTR - Get Report) . The cable service provider was the most bought stock by the 10 largest hedge funds, including Third Point, Tiger Global Management, Glenview Capital Management and Lone Pine Capital.
Apple is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio.
Check out the other most-bought stocks last quarter. We've included the present value of each stake, but readers should be aware that it is possible these hedge funds have already changed their positions in the stocks.
Market Cap: $26.5 billion
Who Bought?: Lone Pine Capital, Third Point
Notably, Lone Pine Capital took a new position in the paints and coatings maker and distributor. Lone Pine Capital bought 1.14 million shares. The stake at present would be worth $327 million.
Daniel Loeb's Third Point also took a new position in Sherwin-Williams. Third Point bought 700,000 shares during the second quarter. The stake, as it stands, would be worth $200 million currently, according to Bloomberg.
The stock is up 10.8% this year.
Market Cap: $70.7 billion
Who Bought?: Lone Pine Capital, Tiger Global Management, Paulson & Co.
Hedge funds bought $688 million worth of Priceline (PCLN) stock in the second quarter, the report said.
Notably, Lone Pine Capital added positions in the online travel company. Lone Pine Capital bought 330,000 shares. As of June 30, Lone Pine owned 1.1 million shares of Priceline, worth $1.61 billion if all shares are still owned, according to Bloomberg.
Tiger Global Management added 199,000 shares of Priceline. The hedge fund's stake totaled 750,000 at quarter's end, worth presently $1.08 billion.
John Paulson also threw his hat into the Priceline ring during the second quarter. He bought 1,700 shares of the stock.
The stock is up 12.3% this year.
Market Cap: $34.8 billion
Who Bought?: Lone Pine Capital
That purchase was from Lone Pine Capital, which added 8.45 million shares of the fast-food owner's stock to its position. As of June 30, Lone Pine owned 9.9 million shares of Yum! Brands, worth currently $893 million if all shares are still owned, according to Bloomberg.
The stock is up 22.2% this year.
Market Cap: $22.5 billion
Who Bought?: ValueAct Capital Management
Hedge funds bought $708 million worth of Baker Hughes (BHI) stock in the second quarter, the report said.
That purchase was from activist investor ValueAct Capital, the fund run by Jeff Ubben, which added 15.6 million shares to its stake in the oilfield services company. ValueAct owned a 9% stake, or 38.8 million shares, of Baker Hughes as of June 30. At present the stake would be worth approximately $2.1 billion.
The stock is up 14% this year.
Market Cap: $69 billion
Who Bought?: Viking Global Investors, Paulson & Co.
A large part of that came from Viking Global Investors, the Greenwich, Conn.-based hedge fund run by Andreas Halvorsen.
Viking Global added 2.97 million shares of Biogen to its position, which totaled 3.2 million shares at June 30. At present the stake would be worth $1 billion.
John Paulson also added to his position of Biogen, picking up 4,700 shares. As of June 30, he held 123,000 shares of Biogen, worth at present $39 million, Bloomberg said.
The stock is up 3.4% this year.
Market Cap: $45 billion
Who Bought?: Viking Global Investors, Long Pine Capital, Third Point, Elliott Management
Hedge funds bought $821 million worth of Shire (SHPG) stock in the second quarter, the report said.
Both Daniel Loeb's Third Point and Steve Mandel's Lone Pine Capital purchased new positions in the Dublin-based biotech company. Third Point purchased 950,000 shares, while Lone Pine bought 2.52 million. Elliott Management also bought 39,000 shares, also a new position.
Additionally Viking Global added approximately 1 million shares to its position. The fund owned 1.16 million shares of Shire at June 30, presently worth $231 million.
Shares of Shire are down 2.5% this year.
Market Cap: $100 billion
Who Bought?: Icahn Capital, Elliott Management
Last quarter, Carl Icahn took the opposite position of the smart money when it comes to Allergan (AGN - Get Report) . Icahn Capital took a new position in the pharmaceuticals company, by acquiring 3.4 million shares, worth at present $858 million (if he still owns the stock), according to Bloomberg.
The billionaire in May revealed he had acquired a "large position" in the Botox maker and expressed his support for CEO Brent Saunders, who he worked with at Forest Labs (which was acquired by Actavis, which subsequently merged with Allergan). "We have every confidence in Brent's ability to enhance value for all Allergan shareholders," he said.
Elliott Management also added 237,000 shares of Allergan last quarter. The firm's position totaled 2.73 million at June 30, with a present value of $690 million.
But the majority of large hedge fund investors either shaved or sold out of their positions in Allergan, including Viking Global, Lone Pine Capital, Third Point and Paulson & Co.
Shares of Allergan are down 19% this year.
Market Cap: $58 billion
Who Bought?: ValueAct Capital Management
That move was because of a new position taken by ValueAct Capital, the fund run by Jeff Ubben. ValueAct bought 2%, or 38 million shares, of the investment bank last quarter. The stake, at present, would be worth $1.16 billion, according to Bloomberg.
That said, the activist investor is unlikely to push for big changes at the investment bank due to its support for CEO James Gorman's strategy and the barrier of government regulation, says TheStreet's James Langford.
"We believe investors under-appreciate the substantial positive operating and structural changes," at Morgan Stanley, ValueAct said in a letter to investors.
Morgan Stanley shares are down 3.9% this year.
Market Cap: $68 billion
Who Bought?: Tiger Global Management, Third Point, Glenview Capital Management, Lone Pine Capital
Three large hedge funds -- Tiger Global, Glenview and Third Point -- added to their existing positions of the cable service provider, while Third Point acquired a new position. All in all, the stock purchases totaled $1.2 billion, according to the report.
Third Point purchased 1.45 million shares, worth at present $364 million.
Tiger Global added 2.48 million shares. Its position totaled 4.25 million shares at June 30, worth currently $1.1 billion. Glenview bought approximately 772,000 shares, for a total of 1.02 million shares, worth about $259 million. Finally, Lone Pine Capital added 643,000 shares. Its stake at quarter's end totaled 4.8 million, worth $1.2 billion at present values, according to Bloomberg.
Shares are up about 25% this year.