Gabriel Plotkin’s Melvin Capital Management has raced off to another strong start this year, making it one of the top performing hedge funds so far in 2018.
In fact, Plotkin is one of the hottest hedge fund managers of the past few years and continues to solidify himself as the most successful manager among the crowd that once worked for Steven Cohen’s SAC Capital.
Melvin was up 5.20 percent in May, extending its gain on the year to 18.30 percent, according to a well-connected hedge fund executive who has seen the results.
A spokesman for the firm would neither dispute nor confirm the results.
Plotkin launched Melvin Capital in late 2014. He was up approximately 44 percent last year, 12 percent in 2016, and 47 percent in 2015, its first full year of operation. Plotkin is a former trader and consumer stock specialist at Sigma Capital Management, then a division of SAC, where he spent eight years.
As of the end of the first quarter, just one of Melvin’s five largest U.S. common stock long positions — Amazon — was among the popular FAANG stocks that have driven the results of other top performing long-short funds in recent years.
The other four were a combination of consumer, leisure, and industrial stocks.
Melvin also held a large number of call and put options in a wide variety of stocks, which played an unknown role in the firm’s performance. It is also unknown how its shorts fared.
As it turns out, hot-shot tech and internet stocks have once again driven returns for Melvin.
For example, e-commerce giant Amazon — its third largest individual long — was up 39 percent for the first five months of the year.
Alibaba Group Holding, its sixth largest common stock long position, was up about 11 percent in May and nearly 15 percent in the first five months of the year.
Microsoft, the cloud and software giant, was up about 6 percent last month and about 16.6 percent through the first five months.
And video game maker Electronic Arts is up nearly 25 percent for the year through May.
Of Melvin’s largest non-tech holdings, casino giant Wynn Resorts — its second largest long — was up nearly 6 percent last month and more than 17 percent through May. Alas, the stock is down nearly 12 percent already this month.
Melvin also held a significant amount of call options on Visa, whose common stock surged 15 percent in the first five months of the year.
Its other largest holdings have enjoyed mixed success this year.
For example, Deere & Company — Melvin’s fourth largest long — was up about 10.5 percent in May. However, the maker of construction equipment and diesel engines was down 4 percent in the first five months.
Melvin’s largest long was distilling giant Constellation Brands; It also held a large stake in its call options. Its stock, however, is down approximately 2 percent for the year through May, although it is already up 4 percent this month.
Melvin’s worst performer has been Thor Industries, its fifth largest long. Shares of the maker of recreational vehicles fell nearly 40 percent in the first five months of the year.
