NEW YORK– Patrick McCormack, the manager of hedge fund Tiger Consumer Management, decided to bet against rival David Einhorn in the third quarter.
McCormack’s $2 billion fund jumped into two stocks that Einhorn, founder of $8 billion Greenlight Capital Management and one of a handful of savvy traders who can move markets with his “short” calls, has said publicly he is shorting, or betting against.
Quarterly regulatory filings for Tiger Consumer show McCormack acquired a 280,000 share stake in Chipotle Mexican Grill and increased his fund’s stake in Green Mountain Coffee Roasters by 500,000 shares to 1.5 million shares.
Einhorn, one of the $2 trillion hedge fund industry’s most closely watched managers, has given presentations questioning the prospects for both Chipotle and Green Mountain Coffee.
Also taking the opposite side of Einhorn on Green Mountain is Dinakar Singh, whose $4 billion TPG-Axon Capital Management opened a 2.5 million share stake in Green Mountain Coffee.
Tiger Consumer and TPG-Axon disclosed their recent moves in so-called 13-F filings, which all large money managers are required to file with the U.S. Securities and Exchange Commission after the close of each quarter.
The filings give a glimpse into the thinking and strategies of managers and, in this case, indicate that while Einhorn is bearish on the two stocks, McCormack is more bullish.
Other filings reveal that $6 billion Tiger Global Management made a big bet on Yahoo (YHOO) by opening a 25 million share position in the Internet company, and Philippe Laffont’s $3.5 billion Coatue Management acquired 1.4 million shares in social networking company Facebook.
Viking Global Management also took a recent liking to Facebook, a sign that the Menlo Park company’s shares may have fallen so much that managers are seeing value in the stock.
Einhorn, meanwhile, went wild over Yahoo, taking a 5 million share stake in the Sunnyvale company.
Overall, the third quarter was a good one for U.S. stocks and hedge funds, with the benchmark S&P 500 rising 5.76 percent and the average hedge fund gaining 3 percent. By contrast, stocks have retreated mightily so far in the fourth quarter, with the S&P 500 falling 5 percent as of Nov. 13.
Since 13-F filings are released roughly 45 days after the end of quarter, it is important to note that what might have appeared as profitable bets by a manager in the third quarter might not be so smart right now in light of the recent market reaction.
Much of the selling in stocks right now is a response to concern about whether a newly re-elected President Obama and a Republican-controlled House of Representatives will be able to reach an agreement to deal with expiring income tax cuts and large pre-planned spending cuts.
For more on how big money managers traded in the third quarter, here is a breakdown by sectors and high-profile stocks:
Internet companies
Tiger Global raised its stake in Facebook to 11.7 million shares from 2 million shares at the end of the second quarter.
Viking Global Investors opened a 4.1 million position in Facebook.
Technology companies
Eton Park Capital Management more than cut its stake in Apple (AAPL) Inc, reducing its holding to 250,000 shares.
Consumer companies
Yale University’s $19.3 billion endowment acquired 133,000 shares of children’s clothing company Carter’s. Tiger Consumer added about 500,000 shares to its stake in Monster Beverage, whose stock dropped 24 percent in the third quarter.
TPG-Axon opened a new 1.2 million stake retail chain Dollar General.
Third Point opened a 5 million share position in Kraft Foods Group.
Financial companies
Farallon Capital Management nearly doubled it position in San Francisco credit card company Visa to 1.17 million shares. Alyeska Capital raised it stake in Citigroup to 943,000 shares from 181,400 shares.
Viking Global added a new position in Citigroup, buying nearly 2 million shares. Maverick Capital also jumped on the Citigroup bandwagon, nearly doubling its position to 5 million shares.
Appaloosa Management made lots of move in financials in the second quarter, opening an 8.25 million stake in American International Group and opening a 2.4 million shares position in JPMorgan Chase. Meanwhile, the David Tepper-led fund cut its position in Bank of America by 1.1 million shares.
Housing
Brigade Capital Management roughly doubled its stake in Beazer Homes to 2.5 million shares, but eliminated its 500,000 share position in DR Horton.
Media companies
TPG-Axon cut its largest holding, Sirius XM Radio, by more than 55 million shares and reducing its position to 31.8 million.
Health care companies
Greenlight Capital increased its stake in Aetna to 4.4 million shares, up from 3.1 million at the end of the second quarter. At the same time, the Einhorn-led fund sold out its position in Wellpoint.
Third Point, meanwhile, raised its stake in Wellpoint to 1.25 million shares from 850,000 in the second quarter. But the Dan Loeb hedge fund exited positions in Humana, Aetna and cut its stake in Cigna nearly in half to 1.4 million shares.
