For the first time in a while, a non-techno name has come up as hedge funds’ top buy in the first quarter of 2014. According to FactSet‘s quarterly report on hedge fund ownership, the largest 50 hedge funds increased their holdings in Verizon Communications Inc. (NYSE:VZ) by 320% quarter over quarter. The report says that roughly $3 billion of Verizon shares were bought in the first quarter by the hedge fund industry’s bigwigs.
The report goes on to show that Lansdowne Partners, Adage Capital and Two Sigma Advisors are among the big hedge funds who made Verizon their largest new position. Lansdowne topped the list with a purchase of 13.5 million shares of the phone company.
Hedge funds buy Verizon feverishly
While FactSet only tracks the largest 50 hedge funds, the heightened interest in the telecom major is clear in other places as well. According to whalewisdom.com, ownership in Verizon Communications Inc. (NYSE:VZ) increased 53% from 4Q2013 to 1Q2014, which is even more staggering when considering that VZ is a large company. Whalewidom’s data shows that Verizon appeared in 1,646 of the 13F filings, of which 187 funds had it in their top ten holdings. Citadel Advisors, D.E. Shaw, Renaissance Technologies and Viking Global made major additions to already-existing stakes, while Third Point, Paulson & Co., Hayman Capital and Luxor Capital initiated new stakes.
eBay, Actavis, Liberty Global also hold hedge funds’ interest
The tech stock that kept the big hedge funds busy in the first quarter was eBay Inc (NASDAQ:EBAY), according to FactSet. The online shopping company purchased by Icahn Associates, Glenview Capital Management, Highfields Capital Management, JANA Partners, OZ Management, Omega Advisors, and D.E. Shaw & Co. Carl Icahn d eBay to split its PayPal business into a separate entity. Other favorite picks of top hedge funds – Liberty Global plc (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK), Actavis plc (NYSE:ACT) and Walgreen Company (NYSE:WAG). Third Point and Lone Pine Capital bought major stakes in Actavis, whereas York Capital, Discovery Capital and Blue Ridge Capital increased their positions.
Healthcare was a popular sector among hedge funds in the first quarter. The report found that the industry had the highest increase in ownership quarter over quarter. Other than Actavis, Illumina, Inc. (NASDAQ:ILMN) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) were popular holdings in hedge fund portfolios. Healthcare was followed by telecom and consumer discretionary.
Hedge funds cut exposure in General Motors, Kinder Morgan and Bank of America
The top 50 hedge funds were found shedding their positions in Kinder Morgan Inc (NYSE:KMI), General Motors Company (NYSE:GM) and Bank of America Corp (NYSE:BAC). The selling was widespread in the automobile company, as most funds cut exposure. Those that reduced their positions included Greenlight Capital’s complete sale of its 17 million shares. Other major sellers were Moore Capital, Jana Partners, Glenview Capital and Eton Park. The biggest sellers of Kinder Morgan were Kayne Anderson Capital Advisors and Omega Advisors, whereas D.E. Shaw & Co. and Viking Global Investors sold major stakes in Bank of America.
Favorite foreign holding was Baidu
Among foreign companies, the hedge fund industry expressed heightened interest in Baidu Inc (ADR) (NASDAQ:BIDU), in which $1.2 billion flowed in. The Chinese Internet company was bought by Lone Pine Capital, Viking Global, S.A.C Capital and Maverick Capital. Two foreign telecom companies that drove hedge fund interest were Mobile TeleSystems OJSC (ADR) (NYSE:MBT) and VimpelCom Ltd (ADR) (NASDAQ:VIP), which are based in Ukraine and Russia, respectively.
Apple Inc. (NASDAQ:AAPL) continues to be the largest holding of the top 50 hedge funds, however, three of these funds cut exposure in the iPhone maker so that it was no longer their top equity holding.