Steve Cohen founded his SAC Capital Advisors fund in 1992. Since then, Cohen has been able to routinely beat the market (check out his portfolio here). Using a combination of fundamental and quantitative analysis, Cohen’s SAC Capital International fund beat the market by 18% in 2008, by 1.9% in 2009 and was on par in 2010 (15.0% vs. S&P 500’s 15.1%).
Cohen’s Top Holdings
As of the end of September, Cohen had $10.35 billion under his management, spread across 1737 stocks. His biggest position was Tyco International (TYC). He had 4,651,892 shares in the company after increasing his holding by 68.7% in the third quarter. TYC occupies over 1.5% of Cohen’s portfolio. The stake was worth $189.6 million at the end of the third quarter. Cohen’s second largest position at the end of the third quarter was a 6,976,951 share position in Suncor Energy (SU) after he upped his position in the company by 43.6%. At a value of $177.5 million, SU takes up more than 1.4% of Cohen’s portfolio. Baker Hughes (BHI) was Cohen’s next largest position at the end of the third quarter after he increased his holdings by 170.33%. His resulting 3,467,842 share stake in the company had a value of $160.1 million or 1.28% of Cohen’s portfolio.
Cohen Initiated 337 New Positions During the 3rd Qtr
During the third quarter, Cohen initiated 337 new positions. Of these Praxair Inc (PX) was the largest. Cohen had bought 1,134,206 shares of the company during the third quarter. His position in the company had a value of $106 million at the end of September. It is Cohen’s ninth largest holding. Cohen also opened new positions in two oil and gas companies – HollyFrontier (HFC) and Marathon Petroleum (MPC). Cohen owns 3,675,082 shares and 3,376,334 shares in the companies respectively. His HFC position was worth $96.4 million at the end of the third quarter while his MPC position carried a value of $91.4 million. Target (TGT), Murphy Oil (MUR), Cephelan (CEPH), Amgen (AMGN), and SPDR Gold ETF (GLD) are among his other new positions. His GLD position isn’t bullish though. He had more than $600 million in GLD call options at the end of the second quarter and he didn’t have any at the end of third quarter.
Cohen also boosted his holdings in certain stocks by more than 10-fold. These were initially less than $15 million in value but now worth at least $40 million. Dollar General (DG), Cameron International (CAM), United Tech (UTX), Union Pacific (UNP), Medco Health (MHS), Pharmaceutical Product Dev (PPDI), Goodrich Corp (GR), Bill Barrett Corp (BBG) EQT Corp (EQT), and Qualcomm (QCOM).
Cohen Sold News Corp and Kinder Morgan
In the third quarter, Cohen also took several bearish stances. He significantly reduced his position in Cyberonics (CYBX), cutting his holding by 72.49%, as well as his position in 3D Systems (DDD), which he slashed by 71.76%. Cohen also reduced his stake in Saks (SKS) by 75.26% and his position in S1 Corp (SONE) by 78.61%. Cohen also trimmed his large bets in Apple (AAPL), Amazon (AMZN), and Nordstrom (JWN). All in all, Cohen cut over 560 of his positions and sold out of over 500 positions. News Corp (NWS), Charter Communications (CHTR), Guess Inc (GES), and Kinder Morgan (KMI) are among these stocks.
Overall Cohen seems bullish about energy companies. Weatherford Intl (WFT), Hess (HES), Plains Explorations (PXP) are also among his top 10 holdings. Transocean (RIG), Forest Oil (FST), and Newfield Exploration (NFX) are among his top 25 stock picks. Given Cohen's outstanding long-term track record, it is likely that energy companies will outperform over the medium term. We are also bullish about energy stocks.