In November we warned Facebook Inc (NASDAQ:FB) investors about a decrease in hedge fund sentiment. Facebook Inc (NASDAQ:FB) was in 104 hedge funds’ portfolio at the end of the third quarter of 2014. There were 106 hedge funds with FB positions at the end of the second quarter. Facebook actually lost 1.6% since the end of September, vs. a 4.2% gain in the S&P 500 ETF (SPY). Other hedge fund darlings such as Apple and Alibaba delivered double digit gains during the same period.
Experts at Insider Monkey, a website specializing in hedge funds, have shown that, historically, those who follow the best picks of the top investment managers can outpace their index-focused peers by a very impressive margin. They have been sharing their best ideas based on hedge fund filings since the end of August 2012. Their picks returned 125% in 28 months, outperforming the market by more than 70 percentage points (see the details here). Facebook was an exception last quarter. Some hedge funds saw the writing on the wall and dumped their Facebook holdings.
What have hedge funds been doing with Facebook Inc (NASDAQ:FB)?
Heading into Q4, a total of 104 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -2% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.
According to hedge fund experts at Insider Monkey, Stephen Mandel’s Lone Pine Capital had the most valuable position in Facebook Inc (NASDAQ:FB), worth close to $682.8 million, corresponding to 2.7% of its total 13F portfolio. The second most bullish hedge fund manager is Coatue Management, managed by Philippe Laffont, which held a $566.3 million position; 5.8% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Andreas Halvorsen’s Viking Global, Karthik Sarma’s SRS Investment Management and Daniel S. Och’s OZ Management.
Because Facebook Inc (NASDAQ:FB) has witnessed declining sentiment from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that slashed their positions entirely at the end of the third quarter. Interestingly, Robert Pitts’s Steadfast Capital Management dropped the largest position of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $125 million in stock, and Stanley Druckenmiller of Duquesne Capital was right behind this move, as the fund dumped about $63.8 million worth. William Harnisch, Michael Platt, Wojciech Uzdelewicz, and Scott Fine were among the other hedge fund managers who were right about Facebook Inc (NASDAQ:FB). They all sold out of their positions.