One of the best stock plays of 2009 continued to play important roles in the portfolios of many of the top performing and well known hedge funds in the first quarter of this year.
Appaloosa Management’s David Tepper, who made daring early bets on banks and other financial services companies during the dark days of late 2008 and early 2009, disclosed that major banks were his five largest holdings in the three-month period ending this past March.
They include Bank of America, his top performer last year and his number one holding in the first three months of this year, when his two main funds were up 14.5 percent. Tepper did cut his BAC stake by more than one-third in the first quarter, however, according to the most recent quarterly filing with the SEC.
His second and third largest holdings were the convertible preferred and common stock, respectively, of Wells Fargo. Rounding out his top seven holdings were the common stock of Citigroup, Fifth Third, Hartford Financial Services and Suntrust.
Paulson & Co.’s John Paulson was Bank of America’s fifth largest shareholder at the end of the first quarter when he added three million shares, making the stock his second largest holding, behind his big bet on a Gold exchange traded fund. Citigroup and Suntrust Banks were his third and fifth largest holdings, respectively.
Shumway Capital’s Chris Shumway, the former Tiger Management manager, disclosed that Bank of America was his largest holding and Wells Fargo was his third largest.
A number of major hedge funds ranked JPMorgan Chase as their number one holding at the end of the three-month period. They include Lone Pine Capital, Blue Ridge Capital, Eton Park and Highfields Capital Management.
These were certainly profitable plays.
In the first quarter alone, BofA surged nearly 19 percent, Wells Fargo was up 17.5 percent and JPMorgan was up 7.7 percent.
Stephen Taub, who has covered the hedge fund industry for 30 years, is a contributing editor to Institutional Investor and Absolute Return-Alpha magazines.
