STAR HEDGE FUND MANAGERS David Tepper and John Paulson reduced their stakes in some large financial companies in the third quarter, and a handful of portfolio managers plowed money into takeover candidate Genzyme (ticker: GENZ). Those were just a few of the revelations that could be found in the quarterly 13F government filings that mutual funds and hedge funds made on Monday.
Tepper, whose Appaloosa Management funds made billions betting on depressed financial stocks in 2009, slashed his holdings in the sector from 66% to 50% between the second and third quarters of this year, according to data from InsiderScore.com. He sold about five million shares of Bank of America (BAC) out of the 27 million he held at the end of the second quarter, and six million shares of Citigroup (C) out of the 58 million he held then.
Paulson, whose bets against the mortgage market in 2007 likewise netted his firm, Paulson & Co., billions, unloaded about 30 million of his 168 million Bank of America shares and 83 million of his 507 million Citigroup shares in the quarter. Paulson also liquidated his entire 1.1 million-share position in Goldman Sachs (GS).
"It's not a surprise to see these guys cutting back on their financial exposure because they did buy them very cheap. The financials had their run a little earlier, and have been laggards as of late," says Ben Silverman, research director at InsiderScore.com.
Tepper plowed money into technology companies like Cisco (CSCO) and Hewlett-Packard (HPQ), and health care companies like Pfizer (PFE) and Medtronic (MDT), while Paulson bought shares of Anadarko Petroleum (APC) and also spent some more money in the health care sector.
Among the companies that Paulson favored was Genzyme. That company, now being pursued by Sanofi-Aventis (SNY) in a hostile bid, also received attention from Steven Cohen of SAC Capital, which added more than four million shares.
Not every major fund manager was sour on financials. Warren Buffett increased his stake in Wells Fargo (WFC), his second largest overall holding after Coca-Cola (KO), by about 5%.
Buffett also made a $50 million bet on Bank of New York Mellon (BNY) in the third quarter, according to filings from Berkshire Hathaway. Berkshire also liquidated its positions in waste disposal company Republic Services (RSG) and document storage provider Iron Mountain (IRM).
STAR HEDGE FUND MANAGERS David Tepper and John Paulson reduced their stakes in some large financial companies in the third quarter, and a handful of portfolio managers plowed money into takeover candidate Genzyme (ticker: GENZ).