Top US hedge funds up Walgreen shares; lose some taste for Apple

Aug 15 2014, 05:40 IST
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SummaryDaniel Loeb's Third Point added 1 million shares of Dollar General, raising his stake by 33 percent.

Top US hedge fund managers did some shopping for shares of discount retailer Dollar General Corp and drug store operator Walgreen Co in the second quarter.

Daniel Loeb's Third Point added 1 million shares of Dollar General, raising his stake by 33 percent, while Blue Ridge Capital, founded by Tiger Cub John Griffin, nearly doubled its stake in Walgreen when it bought 2.8 million shares. That translated into 4.57 percent of the fund's portfolio.

Other fans of Walgreen included Andreas Halvorsen's Viking Global Investors, which still held more than 20 million shares as of June 30, albeit down from roughly 24 million shares the previous quarter. Aaron Cowen's Suvretta Capital Management had a 312,000 share stake.

Walgreen, which purchased a controlling stake in Britain's Alliance Boots, earlier this month decided not to relocate its corporate headquarters to Europe to save on taxes, a strategy known as inversion. It faced complications in pulling off the transaction, as well as heavy political pressure in the United States not to move.

On Aug. 5, the day before the company said it would not reincorporate in Europe, Walgreen shares traded as high as $72.76. On Thursday, the shares ended regular trading at $62.25.

Billionaire activist investor Carl Icahn, Family Dollar Stores' largest shareholder with a 9.4 percent stake, wanted the company to sell itself to rival Dollar General in the face of stiff competition from big-box retailers such as Wal-Mart Stores Inc. But in July, Family Dollar agreed to sell itself to Dollar Tree Inc.

Meanwhile, David Einhorn's Greenlight Capital reduced its Apple Inc stake to about 9.3 million shares, down from about 13.78 million shares, after adjusting for a seven-for-one stock split in June.

Apple long has been one of Einhorn's largest holdings and in a recent conference call, Einhorn said Apple was still "cheap on an absolute basis."

Blue Ridge Capital sold its entire stake, getting rid of 2.2 million shares.

But Leon Cooperman's Omega Advisors took a new stake in Apple of 1.3 million shares, while Soros Fund Management held 1.8 million shares at the end of the second quarter, up from 88,670 shares the previous quarter.

The quarterly disclosures of manager stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are always intriguing to investors trying to divine a pattern in what savvy traders are selling and buying.

But relying on the filings to develop an investment strategy comes with some peril because

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