Investing
Steve Cohen's Point72 Power Moves During Q1 Featured Walmart, Intel, Nvidia and McDonald's
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The Stamford, Connecticut-based hedge fund, Point72 Asset Management released its trading report for the March quarter this week. The hedge fund founded in 2014 by Steven Cohen told the SEC that it had a value of $32.29 billion at the end of March, growing 9.74% during the first quarter of 2023 from $29.42 billion in December.
Known for his razor-sharp investment acumen and legendary Wall Street prowess, Cohen has built a financial empire that leaves even the most-seasoned financiers in awe. With a disciplined yet audacious approach, he has mastered the art of navigating the treacherous waters of the market, transforming Point72 into a beacon of success. He’s also been the majority owner of the New York Mets Major League Baseball team since September 2020.
But it’s not just about the numbers for Cohen; it’s about embracing a philosophy that transcends traditional thinking. From cultivating a culture of relentless curiosity to fostering a team of intellectual renegades, Point72 is a haven for innovation and outside-the-box solutions.
“My belief is if you’re not innovating and not adapting, then you’re dying,” Cohen once said.
Innovating AND Adapting
The fund rapidly increased its total number of holdings from 1,474 at the beginning of the quarter to 2,187, representing a 48% increase of disclosed positions in securities including shares, bonds, exchange-traded fund and more. The chart below shows the fluctuation in the reported value of the fund over the last eight years since inception.
The fund’s reported market value, from data compiled by Fintel, is currently at all-time highs despite choppy and volatile equity markets.
The top five positions in the fund by portfolio weight are: The SPDR S&P 500 ETF (US:SPY) put options [4,28%], Meta Platforms Inc (US:META) [1.62%], Broadcom Inc (US:AVGO) (1.41%), Amazon.com (US:AMZN) [1.29%] and Walmart (US:WMT) [1.28%].
Biggest Increases
The fund’s position the SPDR S&P 500 ETF puts saw a whopping surge, with an allocation increase of 2.65% in the portfolio to a 4.28% weight. This strategic move indicates that Point72 is positioning itself to capitalize on potential market downturns while keeping its finger on the pulse of the benchmark gauge.
With retail giant Walmart Inc, Point72 initiated a new $415 million position making up 1.28% of the fund. The stock has traded relatively sideways over the last 30 months, retaining gains made in the lead up to the pandemic.
The fund also initiated a position in Intel Corp (US:INTC) with a 1.05% portfolio weight worth $340 million. The move demonstrated a belief in the company’s transformative strategies which include targeting $3 billion in cost savings in 2023 on a path to $8-10 billion by the end of 2025 which should support margins during this period of inflation.
Another bearish bet was placed on Invesco’s QQQ Trust (US:QQQ) in the form of put options worth $289 million. The ETF tracks the Nasdaq 100 index. As the index is heavily skewed to technology conglomerates, this could be seen as a bet against general tech that will partially hedge the funds exposure to stocks in the sector.
Point72 also started a new position NVIDIA Corp (US:NVDA), a true titan in the semiconductor industry with a $272 million purchase equating to 0.84% of the fund. NVDA shares are on a tear again after giving up most of its gains in 2022 as investors rush back into stocks with AI exposure.
Other notable increases during the quarter were in McDonald’s (US:MCD), Alphabet (US:GOOGL, US:GOOG), T-Mobile US (US:TMUS) and AT&T Inc (US:T).
Top Decreases
The biggest allocation decrease by the hedge fund was in Fidelity National Information Services (US:FIS), with two-thirds of its position, or a 0.91% allocation, reduced to a 0.49% exposure worth $157 million. The fund sold down 52% of its position with shares trending lower during the quarter.
The position in British biopharma conglomerate GSK Inc (US:GSK) was almost fully removed with the hedge fund selling 98% of its shares, retaining a 0.01% exposure worth just shy of $4 million.
Cohen sold 60% of his exposure to Salesforce (US:CRM) retaining 1.33 million shares worth $266 million, or a 0.82% allocation.
The fund’s position in Visa (US:V) was also cut by 60% leaving $136 million, or a 0.42% allocation to the payments facilitator.
A number of United Health (UNH) put options were exercised or sold with a small $12 million position retained.
The put exposure to Humana (US:HUM) was almost completely reduced with a mere 200,000-share position left at the close of the quarter.
The fund also completely exited its holdings in Uber Technologies (US:UBER), Transdigm Group (US:TDG) and Netapp (US:NTAP).
This article originally appeared on Fintel
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