Tiger Cubs Think A Like to Crowd in Short Positions

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Tiger Cubs Think A Like to Crowd in Short Positions
Source: CNBC Video Screenshot

We actively cover hedge fund short positions (see our European Short Positions page for more information) and have found some interesting trends. The one under discussion today is how Tiger cubs crowd in to short a company. Even though each firm is separately managed, Julian Robertson’s proteges seem to think alike and agree on their stock picks. Judging by the unity in short positions, as you will see below, one comes to think if the same uniformity is shared when it comes to being long on Herbalife Ltd. (NYSE:HLF).

We reported that Patrick McCormack of Tiger Consumer has held a long position in Herbalife for some time now and is pretty bullish about the company, if the cubs agree this much, they might all be long on Wall Street’s latest bone of contention among hedge funds.

In the U.K. some of the largest single bets are held by the cubs. One of the most frequently shorted stocks, Home Retail Group Plc (LON:HOME), is also a bet held by nine funds, which include: Lee Ainslie’s Maverick Capital, with 4.45 percent stake; Steve Mandel’s Lone Pine Capital, with a 1.41 percent stake and Tim Jenkins’ Marble Arch Investments, with a 1.38 percent stake. The Weir Group PLC (LON:WEIR), another favorite in London is shorted by Steadfast Capital with a 2.02 percent stake; Coatue Management, with a 0.99 percent stake and Blue Ridge Capital, with a 3.1 percent state. Dixons Retail PLC (LON:DXNS) is a short position of seven funds including  Lone Pine’s 0.75 percent position, Marble Arch’s 1.67 percent .

We have information that Marble Arch lost in its short portfolio in the fourth quarter of 2012. The losses were large enough to offset the returns from its long book. Stay tuned for more detailed coverage of Tim Jenkins 2012 performance.

As noted earlier, Belgium has a handful of short disclosures and a majority of those are with Delhaize Group (NYSE:DEG). Here the largest bearish bet has been put by Lee Ainslie’s Maverick Capital  which amounts to a 2.27 percent position in Delhaize Group. Another cub, Phillip Lafont’s Coatue Management has a short position of 1.42 percent in the same company. Patrick Mccormack’s Tiger Consumer is not behind, his fund is shorting 1.05 percent of Delhaize. Despite the short interest, Delhaize is going strong. The stock has gained over 35 percent in the last three months.

In Finland, the story of a crowded short bet on Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is pretty popular now. The consensus the Tiger cubs have in the Finnish stocks is quite unparalleled. Out of the thirteen companies that have a negative bet in Nokia, six are Tiger cubs. Viking Global, Lone Pine Capital, Discovery Capital, Maverick Capital, Blue Ridge Capital, Coatue Management all are shorting the Finnish smartphone company. Coatue covered its short in Nokia to 0.49 percent on Jan 14. Another Tiger favorite in Finland is Stora Enso OYJ (HEL:STERV), a paper company. Maverick Capital has a 1.38 percent position, Lone Pine Capital has a 0.92 percent position while Coatue Capital’s Coatue Offshore Master Fund has a bet of 0.62 percent of Stora Enso’s shares.

In France, both Lone Pine Capital and Axial Capital are shorting Neopost SA (EPA:NEO). Overall, Neopost is the short position of about ten firms. Gemalto NV (EPA:GTO) is shorted by five hedge funds, out of which Lone Pine and Maverick Capital hold a 0.98 percent and 1.81 percent position respectively.

In contrast from other European countries, Germany has distinct short disclosures coming from the Tiger cubs. For example, Julian Robertson’s Tiger Management has a bearish bet of 1.08 percent for Powerland AG (FRA:1PL) (ETR:1PL). Despite of this one coming from the Tiger himself, the position is not shared by any cub, or their stake might be lower than 0.5 percent. Chase Coleman’s Tiger Global is shorting 0.63 percent of Global PVQ SE (ETR:QCE). Maverick Capital has a short position in AIXTRON SE (ADR) (NASDAQ:AIXG) and Discovery Capital is shorting 1.8 percent of Wacker Chemie AG (FRA:WCH) (ETR:WCH). Marble Arch Investments has several singul bets in Germany, like in United Internet AG (FRA:UTDI) (ETR:UTDI), SolarWorld AG (FRA:SWV) (ETR:SWV) and Heidelberger Druckmaschinen AG (FRA:HDD)(ETR:HDD).

In Netherlands, TomTom NV (AMS:TOM2) is a favorite with shortsellers. Among the Tiger cubs, Discovery Capital and Marble Arch Investments hold a 0.61 and 1.96 percent position in the navigation systems company. There are less than a dozen disclosures coming from Poland which include the joint bet of Blue Ridge Capital and Discovery Capital on KGHM International Ltd (TSE:QUX).

In Sweden, shortsellers’ crowded pick Elekta AB (STO:EKTA-B) was held both by Lone Pine and Maverick Capital. However, both funds have covered it to below 0.5 percent now. At the same time, Lone Pine has individual positions in both Holmen AB (STO:HOLM-A)  and AB Electrolux (STO:ELUX-A).

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