The election of Democrat Joe Biden to the presidency, along with Pfizer’s news that its vaccine for the coronavirus appears 90 percent effective, sent stocks on a tear on Monday.
But the winners and losers in a world in which tougher regulation is expected and stay-at-home stocks lose their appeal as travel resumes could play havoc with some hedge funds’ portfolios — and boost others.
Amazon, for example, has been the top holding for hedge funds for years now — and a runaway winner. It’s been so successful that some managers grouse about it. One hedge fund manager told Institutional Investor that these investors simply “buy Amazon and get paid millions of dollars to do nothing.”
They may have to start doing something now, as Amazon is down 9 percent since last Friday and is well off its year-to-date high of September 2.
One issue for Amazon is that the Biden administration is expected to get tougher on tech giants, including possibly Amazon and Google, which is already the subject of an antitrust lawsuit, and Facebook and Apple, the New York Times reported Tuesday.
Amazon was among the top holdings of such firms as Chase Coleman’s Tiger Global Management, Dan Loeb’s Third Point, David Tepper’s Appaloosa Management, Chris Hansen’s Valiant Capital Partners, and Andreas Halvorsen’s Viking Global Investors, according to their latest 13F filings of June 30. In fact, it was the most popular stock among the many firms that trace their lineage to Julian Robertson Jr.’s Tiger Management, according to a recent Novus research report.
Facebook is another top hedge fund holding, with firms like Third Point, Tiger Global, and Skye Global Management owning it. The stock is down about 8 percent since Friday. At the end of the second quarter, Skye Global also owned Alphabet, the parent company of Google, which fell close to 2 percent Tuesday.
Other stocks have been hit by investors finally seeing a light at the end of the tunnel for the pandemic — which has boosted stay-at-home names. For example, many Tiger funds also owned Netflix, specifically Light Street and Valiant. The home entertainment provider fell 9 percent on heavy volume Monday but recovered some of that Tuesday for a 6.5 percent decline since Friday.
One of the hardest-hit of the Covid stocks that could face headwinds from a vaccine is Peloton Interactive, the app-enabled fitness provider, which is down 16 percent since Friday. Hedge fund owners included Tiger Global, Light Street, and Woodson Capital as of June 30.
The downtick is good news, however, for short sellers, including Andrew Left of Citron Research, who have been killed on the short this year.
Meanwhile, travel and lodging stocks pummeled by the restrictions — and fears — of the pandemic are starting to stage a comeback. Hedge funds have largely abandoned many of these stocks, particularly in the airline sector.
But hotelier Hilton Holdings, whose fourth largest shareholder as of September 30 was Bill Ackman’s Pershing Square, has jumped 12 percent since Friday. Other hedge fund owners include Viking Global, Sculptor Capital and Soroban Capital.
