GO
Loading...

Enter multiple symbols separated by commas

NetNet

More

  Tuesday, 16 Jun 2015 | 4:34 PM ET

Hedge fund spends big for these stock ideas

Posted By: Lawrence Delevingne
Philippe Laffont, founder and chief investment officer of Coatue Management LLC.
Chris Goddney | Bloomberg | Getty Images
Philippe Laffont, founder and chief investment officer of Coatue Management LLC.

Plans by Coatue Management to spend $70 million on research this year has so far yielded three themes for long-term investing in technology.

Philippe Laffont's hedge fund firm wrote in a letter to clients of its long-only fund—it does not short, or bet against, stocks—that it sees opportunities in three major areas:

  • Companies with big "TAM." TAM stands for total addressable market and winners in the category often have innovative technologies that dominate competitors. "Not only is underlying revenue growing rapidly, but these platforms can also generate new revenue streams in the future," the letter said. Examples given by Coatue include social network Facebook and Chinese media giant Tencent.
  • Companies with smart capital allocation. Even in mature, slower-growth markets, "astute management teams can enhance returns through capital allocation via share buybacks, dividends and acquisitions, offering the investor growth at a reasonable price." Examples include longstanding Coatue holdings in the cable TV industry such as Charter Communications and Liberty Global and chipmaker Avago Technologies.
  • Companies for the "mobile Internet." The next generation of great Web-related companies will be outside the traditional technology, media and telecommunications sector. "There is every reason to believe that this disruption will eventually permeate all sectors of the global economy." Examples cited include Uber and Airbnb.
»Read more
  Tuesday, 16 Jun 2015 | 12:05 PM ET

Big money not preparing for big exit by Greece

Posted By: Lawrence Delevingne
Chris Ratcliffe | Bloomberg | Getty Images

The so-called smart money is pulling back from market risk, with fund managers taking down exposure to stocks, increasing cash holdings and buying protection against a sharp selloff.

It's hardly panic though. Managers of hedge funds, mutual funds and other large investors are still fundamentally optimistic despite the recent increase in caution. Most expect Greece to stay in the euro zone and expectations for global growth remain near their highs, according to a new Bank of America Merrill Lynch survey.

»Read more
  Monday, 15 Jun 2015 | 11:44 AM ET

These investors like Greece debt talks breakdown

Posted By: Lawrence Delevingne

The collapse of debt negotiations over the weekend caused Greek stocks to fall more than 5 percent Monday, leading to losses of more than 1 percent on U.S. exchanges. But a small group of hedge funds continues to view uncertainty in Greece as a chance to make money.

"While the ongoing negotiations are likely to result in volatility, regardless of the outcome there should be attractive European recovery opportunities in both Greece and Europe more broadly," Gregory Schneiderman, a portfolio manager at $8 billion hedge fund allocator Aurora Investment Management, said in an email Friday.

Schneiderman noted that Greece was not a common position for hedge funds and that investors only see "a limited number of actionable opportunities" directly related to the troubled country.

»Read more
  Friday, 12 Jun 2015 | 3:36 PM ET

Greek drama sets up market opportunity for hedgies

Posted By: Lawrence Delevingne

A small group of hedge funds that includes Dan Loeb's Third Point, Richard Perry's Perry Capital, and Tom Wagner and Ara Cohen's Knighthead Capital Management continues to view uncertainty over Greece as a chance to make money.

"While the ongoing negotiations are likely to result in volatility, regardless of the outcome there should be attractive European recovery opportunities in both Greece and Europe more broadly," Gregory Schneiderman, a portfolio manager at $8 billion hedge fund allocator Aurora Investment Management, said in an email Friday.

Schneiderman noted that Greece was not a common position for hedge funds and that investors only see "a limited number of actionable opportunities" directly related to the troubled country.

»Read more
  Friday, 12 Jun 2015 | 12:31 PM ET

This group of active managers is killing it

Posted By: Jeff Cox

Active management is still looking good in 2015 after years of misery, though the picture isn't quite as rosy as it was a few months ago.

The group is outperforming its benchmarks at levels not seen in six years, according to an analysis from Fundstrat Global Advisors that showed things are going particularly well in 2015 for those who focus on value stocks. (Tweet this)

However, the second quarter overall marked a bit of a momentum slowdown as market conditions changed.

It's been an odd year for the stock market, with investors wary over what the Federal Reserve will do with interest rates now that its quantitative easing program has been put on hiatus. Major indexes outside of tech have wobbled, with every rally met with a pullback and little conviction in either direction.

"While still better than last four years, fund managers slipped in past two months," founder and strategist Thomas J. Lee said in a report. "Active managers saw some weakening in performance in the past two months ... which we attribute in part to heightened market volatility in the past few months.

"The mixed signals from QE and rising rates, have made indices stall, which in turn, eroded some performance gains. What has been impressive is the fact that global managers still outperformed, even as global indices generally put in stronger performance."

Read MoreThe strange reason why stocks may soon surge

Overall, 52 percent of large-cap managers are beating their benchmarks (such as the S&P 500 or Russell 1000), 48 percent by at least 0.1 percentage point (see chart).

Bu the performance is especially strong for value managers, or those who focus on stocks they feel are trading substantially below where they should be. That group has shown a 73 percent beat rate this year.

»Read more
  Wednesday, 10 Jun 2015 | 11:18 AM ET

Drivers saving more at the pump just buy more ...

Posted By: Jeff Cox
A customer prepares to pump gasoline at an Arco gas station in Mill Valley, Calif.
Getty Images
A customer prepares to pump gasoline at an Arco gas station in Mill Valley, Calif.

Folks waiting for that big economic boost from lower gas prices ought to stop holding their breath.

That's because moves like the one seen since June 2014—down an average of 84 cents a gallon—often don't have a huge impact, particularly if they're driven by supply surges rather than demand drops.

A research paper this week (with multiple charts) from the New York branch of the Federal Reserve clarifies the effects: Using a slew of variables and looking from 1986 through the first quarter of 2015, the conclusion was basically that in instances of oversupply, gross domestic product and consumption over the longer run increase "quite modestly" while nonresidential investment i.e., capital expenditures for business shows somewhat stronger growth.

For Wall Street economists, the findings could be something of a jolt. Over the past three quarters and then some, they've been projecting that big savings at the pump would propel consumers to become increasingly confident and spend more.

Reality, though, hasn't meshed. Consumer spending has been tepid and GDP growth has been abysmal—a decline of 0.7 percent in the first quarter, a gain of just 2.2 percent in the fourth quarter of 2014, and second-quarter growth tracking at just 1.1 percent, according to the Atlanta Fed.

Read MoreEconomy can use a boost...in rates: Experts

That's occurred as gas prices at the pump plunged from an average of $3.70 a gallon a year ago to $2.86 a gallon this month, with a low of $2.15 a gallon back in February, according to the Energy Information Administration.

»Read more
  Wednesday, 10 Jun 2015 | 10:23 AM ET

Japanese investors give thumbs-up to Abenomics

Posted By: Lawrence Delevingne
A man walks past a share prices board in Tokyo on June 9, 2015.
Yoshikazu Tsuno | AFP | Getty Images
A man walks past a share prices board in Tokyo on June 9, 2015.

Lots of money managers sitting in New York and London have opinions about Japanese efforts to spur economic growth, but what about hedge fund managers and bankers in Tokyo?

The answer is cautiously optimistic.

Some 72 percent of Japanese investors considered so-called Abenomics a success in 2013 and 2014, according to a new survey by hedge fund industry association AIMA Japan and data and research provider Eurekahedge.

"Abenomics" refers to the aggressive economic stimulus policy instituted by Japanese Prime Minister Shinzo Abe. It entails a money-printing operation similar to the U.S. Federal Reserve's quantitative easing, aggressive government spending and economic reforms.

At the same time, almost 90 percent of respondents believe that the Bank of Japan will fail to reach its inflation target of 2 percent by year-end. Another 60 percent expect the BOJ will be forced to do another round of QE.

Investors also were asked about key factors driving the Japanese economy for 2015 and beyond. Nearly 70 percent cited government structural reforms, including adding more immigrants and women to the workforce.

»Read more
  Tuesday, 9 Jun 2015 | 4:04 PM ET

US Bancorp CEO: We're excited for higher rates

Posted By: Mary Thompson

With the Federal Reserve expected to raise interest rates later this year, U.S. Bancorp is bracing for a bump in its lending and savings businesses, CEO Richard Davis said.

In an interview at Morgan Stanley's Financials Conference in New York, Davis said he expects executives to move quickly once the central bank starts hiking rates, to lock in loans and financing for projects that have been on the back burner.

He also thinks higher rates will bring homebuyers off the sideline, as they will want to get mortgages before rates on these loans return to historically normal levels.

Read MoreBove: Investors missing 'tremendous' value in banks

More exciting, said Davis, is that higher rates will finally allow the bank to start conversing again with savers.

Davis said there is a whole population out there looking for the security a bank CD or savings account can provide, but which instead has put money in riskier instruments, looking to get more yield.

»Read more
  Tuesday, 9 Jun 2015 | 2:15 PM ET

China cyberhack gives huge boost to this ETF

Posted By: Jeff Cox
loveguli | iStock/Getty Images Plus | Getty Images

There has been one clear winner in China's hack of federal employee personal data, and it's come from an unlikely place.

An exchange-traded fund that focuses on the cybersecurity industry has been on the rise all year, but in particular since news last week that Chinese hackers had broken into the records of 4 million federal workers. The move was part of what U.S. government officials have termed a concentrated effort to infiltrate American personnel records for intelligence purposes.

The PureFunds ISE Cyber Security ETF, with the apt ticker symbol HACK, rose 4 percent Friday on the China news and another 2 percent Monday before handing back some gains Tuesday.

Continued worries about U.S. vulnerability to global cyber-espionage "have translated into rapid asset gathering and returns well above both market benchmarks like the S&P 500 Index, and diversified tech funds such as the Technology Select Sector SPDR Fund," according a report on ETF.com.

Read MoreGovernment breach wakes up investors

The fund has gathered $122 million of investor cash in June alone and $718 million for the year to take its total under management to $868 million. No wonder: HACK is up a glittering 19.7 percent year to date and thus is expected to top $1 billion in assets shortly.

The fund tracks the ISE Cyber Security Index, the largest components of which include FireEye, Infoblox and Palo Alto Networks.

»Read more
  Tuesday, 9 Jun 2015 | 12:23 PM ET

What 'tantrum'? Investors still love bond funds

Posted By: Jeff Cox

The bond market may be in turmoil, but investors don't seem to care.

Even as fixed income yields spike and concerns rise about an ongoing "taper tantrum" type of event, money continues to flow into bond funds.

A net of $5.3 billion in fresh cash has hit bond mutual and exchange-traded funds in June, even though collectively they are down close to 1 percent, according to a tally from market data firm TrimTabs.

"The lack of reaction to the backup in bond yields since mid-April is startling," David Santschi, TrimTabs CEO, said in a statement. "We would normally expect investors to be selling hard by now."

The 10-year U.S. Treasury note, considered a benchmark for the broader fixed income market, touched a 2.45 percent yield Tuesday morning, its highest since Oct. 3. The move has come amid concerns that the Federal Reserve is getting closer to liftoff—though some on Wall Street expect the move to be more like a "crawl"—of its own benchmark funds rate.

Read MoreFed needs to take away the punch bowl: Lindsey

If the U.S. central bank does move in 2015, it will be the first time in nine years that the Fed has raised rates, as part of a zero interest rate policy in place since late 2008.

The biggest winner among bond ETFs has been the iShares Core U.S. Aggregate Bond fund, which has taken in about $403.9 million, the fifth most of all ETFs, so far in June, according to FactSet data compiled on ETF.com.

Not all bond ETFs have been winners, though. Investors are showing a conservative mindset, dumping junk and long-duration government bonds:

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

Wall Street