What The Billionaires Are Buying And Selling
Charles Sizemore | Aug 26, 2014 12:40AM ET
Earlier this month, Direxion launched a new ETF–the Direxion iBillionaire Index ETF (IBLN)–which I covered in Invest Like a Billionaire. The ETF runs a concentrated portfolio of the 30 S&P 500 stocks most favored by billionaire hedge fund investors based on their most recent 13F filings with the SEC.
IBLN’s underlying index just underwent its quarterly rebalancing, and there are eight new names that will soon be making the portfolio:
One name in particular that stands out is Michael Kors (NYSE:KORS). KORS stock has been getting crushed of late, as investors have fixated less on the company’s impressive growth rate and more on its inventory build up and fears of pending margin compression (see “KORS Stock Crushed After Crushing Earnings“). It would seem that KORS has become something of a contrarian bet for a handful of influential gurus–including
Mario Gabelli, Paul Tudor Jones and Steve Mandel.
Netflix (NASDAQ:NFLX) also made the cut–despite Carl Icahn’s continued reduction in ownership–on buying by Chase Coleman and Julian Robertson’s funds. Other additions include Adobe Systems (NASDAQ:ADBE), Aetna (NYSE:AET), Comcast (NASDAQ:CMCSA), Intercontinental Exchange (NYSE:ICE), McKesson Corporation (NYSE:MCK) and Transocean (NYSE:RIG).
And what are these new additions replacing?
Google (NASDAQ:GOOGL) is one significant deletion, with Dan Loeb being the biggest high-profile seller. FedEx Corporation (NYSE:FDX) was also sold by Loeb and by Richard Chilton. Other notable deletions were Forest Labs (NYSE:FRX), Qualcomm (NASDAQ:QCOM)), Coca-Cola Enterprises (NYSE:CCE), Verizon (NYSE:VZ), Fidelity National Information Services (NYSE:FIS), and EQT Corp (NYSE:EQT).
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iBillionaire’s index is a subset of the S&P 500. But because it is a concentrated portfolio, its composition is very different. Its biggest overweighting is in the consumer discretionary sector, followed by information technology and energy. Its biggest underweighting is in the financial sector.
The takeaway from all of this? The billionaire smart money is piling into consumer discretionaries and tech. They’re not always right, of course. But their billions came from getting it right more often than not.
Disclosure: Charles Lewis Sizemore, CFA, is the editor of Macro Trend Investor and chief investment officer of the investment firm Sizemore Capital Management.
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