Was last week the market bottom, or least a good buying opportunity?
It all depends upon whom you ask. And frankly we will only know in hindsight, probably in a couple of years.
Nonetheless, several hedge fund managers in the past week or so have been making sizable bets on new positions or adding to already large ones that previously triggered 13D or 13G filings. Most of these recent purchases have worked out well.
We won’t know the full U.S. stock portfolios of hedge funds for the three months through March until as many as 45 days later, when first-quarter 13F filings are due.
In the meantime, Melvin Capital Management disclosed that as of March 20, it established a stake of 14.2 million shares in L Brands, or 5.1 percent of the embattled retailer known for its Victoria Secret, Bath & Body Works, Express and Limited brands, according to a 13G filing. As a result, it is now the seventh largest shareholder.
Lone Pine Capital became the fourth largest shareholder of L Brands when it bought nearly 14.7 million shares in early February, before the market sell-off related to Covid-19 began. The stock has risen about 18 percent since March 20 through the end of the month. Shares of L Brands fell 11.5 percent on Wednesday.
Melvin also recently disclosed that as of March 24 it boosted its stake in China-based Luckin Coffee to 5 million shares. After surging about 6 percent on March 31, the stock was still down less than one percent since March 24. Shares of Luckin declined more than 3 percent Wednesday.
Adage Capital Partners also disclosed sizable positions in two stocks earlier this month.
The Boston-based firm said it boosted its stake in Astec Industries by about 70 percent, to more than 1.13 million shares, as of March 9. Adage now owns a little more than 5 percent of the maker of construction equipment, becoming its fifth largest shareholder. The stock, which rose about 6 percent between March 9 and March 31, jumped more than 7 percent on Wednesday.
The hedge fund firm also said that as of March 13 it had established a new position of about 1.44 million shares of Velocity Financial, or 7.58 percent of the mortgage lender, which went public in January. The stock dropped more than 37 percent on Wednesday and is down about 48 percent from the March 13 filing date.
Highbridge Capital Management also filed two initial 13Gs this month.
The multistrategy firm said as of March 18 that it had taken an initial stake of 4.2 million shares in Quotient, or 5.2 percent of the maker of transfusion diagnostic products. It is now the fourth largest shareholder. Since March 18, shares of Quotient have risen about 43 percent through Wednesday.
The hedge fund also said it had boosted its stake in Protalix BioTherapeutics by more than 1.5 times, to more than 3.3 million shares, as of March 12. It now owns just shy of 10 percent of the Israeli pharmaceutical company, which has received FDA approval for the treatment of Gaucher disease. Highbridge is now the second largest holder of the company’s common stock, which has fallen 6.7 percent from March 12 through Wednesday.
EcoR1 Capital said as of March 16 it had established a new stake of 2.15 million shares in Puma Biotechnology, or 5.5 percent of the company, which is trying to develop cancer treatments. The health-care-focused hedge fund is now the company’s fifth largest shareholder.
After tumbling Wednesday, Puma’s stock is still up about 16 percent since March 16.