Many of the best performing, most popular hedge fund stocks in 2015 plunged much more than the overall market amid Monday’s meltdown, in some cases by multiples of the market’s decline. Several of these stocks had surged by triple digits last year.
For example, shares of Netflix fell nearly 4 percent, to close at $109.96, after reports that brokerage firm Robert W. Baird downgraded the shares. The stock was the top performer in the Standard & Poor’s 500 stock index last year, surging 134 percent. At the end of the third quarter it was the largest long holding of New York-based Tiger Global Management, which was the third-largest shareholder of the streaming video company. New York–based SRS Investment Management, founded by Tiger Global alum Karthik Ramakrishna Sarma, was the tenth-largest shareholder. Netflix was also the hedge fund firm’s biggest position.
Amazon.com, which was the second-best S&P 500 stock last year, rising 118 percent, fell 5.8 percent on Monday, to close at $636.99. It was the sixth most popular hedge fund stock — along with Microsoft — at the end of the third quarter, with at least 124 firms holding a position, according to Goldman Sachs.
Microsoft fell 1.2 percent Monday, but this was less than the broad market.
Shares of Alphabet’s “A” shares fell 2.4 percent Monday, to close at $759.44. The stock, up about 47 percent last year, was the second most popular hedge fund stock, with 151 investors. They include Greenwich, Connecticut-based Viking Global Investors, which counted Alphabet as its third largest long holding.
Facebook, the third most popular hedge fund stock at the end of the third quarter with 149 holders, fell 2.3 percent, to $102.22, on Monday. The social media giant jumped more than 33 percent last year.
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On the other hand, several once-popular hedge fund stocks that wound up among the biggest losers for 2015 finished this year’s first day of trading in the black.
This was led by SunEdison, one of the worst performing stocks last year. Shares of the alternative energy company surged 13 percent on Monday, to close at $5.75.
Late last week the company made a series of announcements that some commentators did not think were positive developments. For example, it said that a subsidiary agreed to exchange $336 million in debt for shares of TerraForm Power, a SunEdison subsidiary that holds a portfolio of wind and solar assets. Separately, SunEdison agreed to pay $180 million for a 33 percent interest in solar generating capacity held by Dominion, a major producer and transporter of energy. SunEdison then said Terra Nova Renewable Partners, a partnership formed with J.P. Morgan Asset Management – Global Real Assets, simultaneously acquired SunEdison’s interest in the transaction.
Meanwhile, shares of Micron Technology jumped 1.20 percent, to $14.33 on Monday. Investors apparently overlooked the fact that Deutsche Bank cut its price target on the stock from $20 to $17, noting that an unexpected loss was forecasted for the chip maker. Even so, the bank told clients in a note Monday it thinks Micron’s “risk-reward remains attractive for a recovery play in 2016,” and maintained its buy rating on the stock.
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Keith Meister’s Corvex Management bought nearly 600,000 shares of Signet Jewelers between December 9 and December 30, for prices ranging between $116.82 and $122, boosting the New York activist firm’s stake in the jewelry retailer to 7.1 percent.
