Seeking Alpha
Recommended for you:
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

SAC Capital was founded by Steven Cohen in 1992. It's a diversified hedge fund that makes use of fundamental and qualitative methods of analysis. Steven Cohen and his business partners at SAC Capital are the largest investors of the firm. They account for approximately 60% of the firm’s assets. Over the years, SAC has become known to have one of the most consistent performances. Over its two decades in business, the firm has generated average annual returns of nearly 30%. In 2010, SAC Capital reported gains of 16%, after fees. The figure is a percentage point higher than the S&P 500 (NYSEARCA:SPY) return of 15.1%.

Cohen is among the most prominent individuals in the financial world. He is the 114th richest man in the world with a net worth of $8 billion. In 2010, he is said to have taken home $1 billion in personal compensation along with a $1 billion paycheck. Recently, prosecutors have been trying to tie the illegal insider trading cases to Steven Cohen. However, he has a very low probability of actually ending up in jail. We discussed the reasons why in our article Is This the Beginning of the End for Steve Cohen’s SAC Capital?

SAC Capital’s top stock picks returned 3.5% since the end of March vs. 2% for the S&P 500. Investors who replicated Steven Cohen’s stock picks were able to beat the market by 1.5% in less than 4 months. During the first quarter of 2011, Cohen reduced Plains Exploration & Prod (NYSE:PXP) by 45% and EMC Corp (NYSE:EMC) by 10%. Despite the decrease in holdings, both companies are still among the top 10 stock holdings of SAC Capital at the end of March 2011:

Company Name

Ticker

Value

Return

SPDR S & P 500 ETF TRUST (PUT)

SPY

821257

2%

GENZYME CORP

GENZ

531373

0%

DENDREON CORP

DNDN

307056

4%

ISHARES LONG-TERM BOND ETF (PUT)

TLT

263873

6%

NEWMONT MINING CORP

NEM

251311

8%

CENTURYLINK INC

CTL

212247

-5%

PLAINS EXPLORATION & PROD

PXP

180599

14%

EXPRESS SCRIPTS INC

ESRX

177222

3%

MURPHY OIL CORP

MUR

168304

-5%

E M C CORP MA

EMC

150687

5%

DANAHER CORP

DHR

150360

0%

WEIGHT WATCHERS INTL

WTW

149103

13%

LABORATORY CORP AMERICA

LH

143718

1%

CHUBB CORP

CB

141522

6%

B J S WHOLESALE CLUB INC

BJ

138580

4%

 

 

 

 

Despite the fact that Cohen sold 45% of Plains Exploration & Prod (PXP), the company had the highest return, at 14%, among his top holdings. He still has 4,984,783 shares of PXP worth $180 million. SAC Capital has the largest position in the company, followed by Ralph V. Whitworth’s Relational Investors. Relational Investors added PXP to its portfolio during the first quarter of 2011. As of March 2011, the firm holds 2,750,100 shares of PXP, worth $99 million. (Check out Ralph V. Whitworth’s top stock picks)

SAC Capital also has the largest position in Centurylink Inc. (NYSE:CTL). Currently, SAC has 5,108,220 shares valued at $212 million. Jim Simons’ Renaissance Technologies has the second largest holding of CTL with 2,148,416 shares, worth $89 million.

Newmont Mining Corp. (NYSE:NEM) gained 8% since March 2011. SAC Capital has 4,604,460 shares of NEM worth $251 million. SAC has the second largest position in NEM preceded by Jean-Marie Eveillard’s First Eagle Investment Management. First Eagle has $311 million in NEM.

Just a couple of months ago many people believed Steven Cohen has lost his mojo. We disagree. In 2010, he performed better than most hedge funds and his top 40 picks beat the market. This year SAC Capital’s return is approaching 10% too. This is better than the S&P 500 index and most hedge funds. (Check out Steve Cohen's entire portfolio).

Source: 15 Top Steve Cohen Stock Picks