NEW YORK (By Sam Forgione Reuters) – Top U.S. hedge funds trimmed bets on a group of closely-watched technology stocks in the fourth quarter in an apparent effort to cut their losses following Donald Trump’s U.S. presidential election victory, regulatory filings showed.
An analysis of nine hedge funds, including Leon Cooperman’s Omega Advisors and Daniel Loeb’s Third Point, showed 10 decreased stakes in the so-called “FANG” stocks which include Facebook, Amazon, Netflix and Google parent Alphabet.
Data also showed two liquidated stakes and three new share stakes. The portfolio shifts occurred in the three months ended Dec. 31.
The general tilt toward portfolio decreases came as Facebook, Amazon and Google fell 10.3 percent, 10.4 percent, and 1.4 percent respectively over the quarter, while Netflix bucked the trend and rallied more than 25 percent. The stocks have since surged, with Facebook gaining the most at more than 16 percent year-to-date.
Trump’s victory in the U.S. election on Nov. 8 led investors to cut bets on most of the FANG stocks, which had already gained significantly over much of last year, and rotate into beaten-down cyclical shares on the view that Trump’s policies of lower taxes and write-offs of capital expenditures would give those shares an opportunity to shine, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Hellwig said tensions between technology companies and Trump were ancillary and likely did not fuel investors’ preference for cyclical stocks over most FANG shares in the fourth quarter.
Cooperman’s Omega Advisors cut its stake in Facebook by 209,300 Class A shares to 68,800 Class A shares, and trimmed its stake in Alphabet by 21,761 Class A shares to 139,395 Class A shares. The hedge fund took a new stake in Amazon, however, of 20,000 shares, the quarterly disclosures with the U.S. Securities and Exchange Commission known as 13F filings showed.
Loeb’s Third Point cut its stake in Facebook by nearly 2 million Class A shares to 3.5 million Class A shares, and reduced its Alphabet stake by 125,000 Class A shares to 425,000 Class A shares.
Philippe Laffont’s Coatue Management cut its stake in Facebook by 201,825 Class A shares, leaving its position in the social network at about 6.1 million Class A shares, while cutting its stake in Amazon by 23,792 shares to 273,298 shares and slashing its stake in Netflix by 1.8 million shares to 2.9 million shares.
Soros Fund Management, while trimming a stake in Amazon, took a new stake in Facebook of 353,686 Class A shares and increased positions in Alphabet and Netflix.
(Reporting by Sam Forgione; Editing by Jennifer Ablan, Bernard Orr)