Hedge Fund Andor Capital's Newest Favorite Plays Are Out

by: Insider Monkey

By Alex Oleinic

Former employee of Art Samberg's Pequot Capital Management, Daniel Benton, co-founded Andor Capital Management in 2001. Andor is one of the hedge funds we track (discover the secrets of hedge fund piggybacking) and recently it has released its 13F form, disclosing its equity portfolio at the end of the third quarter. Let's take a look at the hedge fund's five favorite stock picks.


Andor's largest stock holding is Facebook (NASDAQ:FB), in which Andor initiated its exposure in the third quarter. Andor holds 4.0 million shares of the company, which are valued at some $200.9 million. Facebook posted an EPS of $0.19 in the second quarter of the year, exceeding analysts' forecasts by over 38%. The revenue of Facebook surged to some $1.8 billion, from below $1.2 billion a year ago.

In the conference call, according to the transcript, CEO Mark Zuckerberg said that the next goal of the company is to increase the number of the community members to 5 billion, which is quite ambitious, especially taking into account that currently there are only about 2.4 billion people with Internet access in the world.


Mr. Benton also increased his position in Apple (NASDAQ:AAPL), to 350,000 shares, from 125,000 shares reported in the previous filing. The current value of the stake amounts to almost $166.9 million. Apple posted EPS of around $7.50 in the third quarter of its fiscal year, while in the fourth quarter, analysts expect an EPS of $7.90.

A couple of days ago, Apple announced the hiring of Angela Ahrendts, the CEO of Burberry, for the position of senior vice president, a newly created spot at Apple. The company is looking forward to a solid end of the year, amid record opening weekend sales of the newest iPhone. In three days after their release, Apple had sold 9 million units of its iPhone 5S and 5C models, the company said in a statement.


The next on the list is Google (NASDAQ:GOOG), in which Andor reported 175,000 shares, unchanged over the quarter. The position is valued at $153.3 million. Despite the fact that the company posted an increase in revenue by 19% on the year, at $14 billion in the second quarter, its non-GAAP EPS declined to $9.56, from $10.16 posted in the same period one year earlier.

Google sees a lot of value in developing its Android OS and applications for it. Downloads from Google's Play Store have already exceeded 50 million, and in the first half of this year, developers received more money from Google than in the entire year of 2012, according to Google's latest conference call. Sales of Chromebooks are also increasing despite economic headwinds in the PC market, CEO Larry Page also disclosed.


Its fourth largest stock holding, Andor also slightly strengthened its exposure in Tesla Motors Inc (NASDAQ:TSLA), reporting 325,000 shares versus 300,000 in the second quarter. The value of the firm's position in Tesla amounts to $62.8 million, a surge from $32.2 million, amid the 80% jump in Tesla's stock price during the July-September period. The EPS of the company amounted to $0.20 in the second quarter, while the analysts on average expected an EPS of -$0.17. Tesla is working hard to deliver its next product, the Model X, which is going to be a fully-electric SUV. However, the company plans to start delivering the Model X by the end of next year, with volume production expected in 2015, according to Elon Musk's words from the second-quarter conference call transcript.


In fifth is Cree (NASDAQ:CREE), which made the top five due to a surge in owned shares to 1 million units, from 300,000 shares reported in the second quarter. The firm's stake value in Cree amounts to $60.2 million. The company reported revenue of $375 million in the fourth quarter of fiscal 2013, and net income of $0.38 per share, up by 56% on the year, and above the average estimate of $0.37.

Cree is specialized in the development of LED products and is constantly updating its portfolio with new additions. "Our new XSPR Street Light and the Cree BR30 LED Flood Light are the most recent examples of what is possible in terms of opening new markets to LED lighting and creating opportunities for Cree to both increase revenue and build our brand," the CEO and President of Cree, Charles M. Swoboda, said last quarter.

Over the past month, the company has revealed that its High-Density [HD] LED Arrays double the intensity of regular spotlights, and the XLamp® XQ-E LED family, which is designed to diminish the size and cost of LED luminaries for lighting producers, can do so without reducing output or reliability, the company said in two statements.

Disclosure: I am long AAPL, GOOG.

Business relationship disclosure: This article is written by Insider Monkey's writer, Alex Oleinic, and edited by Jake Mann. They don't have any business relationships with any of the companies mentioned in this article and they didn't receive compensation (other than from Insider Monkey and Seeking Alpha) to write this article.