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D.E. Shaw & Co.: Where Is David Shaw Bullish?

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At the end of Q3 2019, D.E. Shaw & Co.’s total portfolio of publicly traded securities was worth around $81.2 billion. David Shaw, who founded the firm in 1988, is known for his quantitative strategy to identify different investment avenues. In this article, we’ll look at the top buys, sells, and holdings of D.E. Shaw & Co.

Apart from Shaw, Renaissance Technologies founder James Simons is also well known for his quantitative strategy in the US hedge fund industry. To learn more about Simons’ firm, please read Renaissance Technologies: Analyzing Its Q3 13F.

Top buys

In Q3 2019, Microsoft (MSFT) was D.E. Shaw & Co.’s top buy. The fund increased its holdings in MSFT by 36%. MSFT constituted 1.4% of the fund’s total portfolio of publicly traded securities. Notably, the tech giant was D.E. Shaw’s largest holding.

On a year-to-date basis, MSFT has risen 47%, outperforming the Nasdaq 100 Index. In the same period, the Nasdaq 100 Index gained 30.4%. To read more about the tech giant’s recent updates, please read Will Microsoft Take on Alexa, Google Assistant, and Siri?

The other top buys of D.E. Shaw & Co. in the third quarter were PayPal Holdings (PYPL), the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), Automatic Data Processing (ADP), and Lowe’s (LOW). The fund increased its holdings in PYPL, ADP, and LOW by 434%, 217%, and 23%, respectively. D.E. Shaw & Co. bought a fresh stake in HYG, which constituted 0.4% of the fund’s total portfolio.

Top sells

In Q3 2019, Anadarko Petroleum was D.E. Shaw’s top sell. Anadarko was acquired by Occidental Petroleum (OXY). For each share of Anadarko, the shareholder received $59 cash and 0.29 shares of Occidental Petroleum. Legendary investor Warren Buffett’s Berkshire Hathaway financed this deal.

However, activist investor Carl Icahn considered this deal unfair to OXY’s shareholders and He this deal “hugely overpriced.” To learn more, please read Occidental Petroleum Earnings and Icahn versus Buffett.

Fidelity National Information Services (FIS), Amazon (AMZN), Medtronic (MDT), and Activision Blizzard (ATVI) were the other top sells of D.E. Shaw & Co. in the third quarter.

In Q3 2019, among the top 10 institutional investors of AMZN, seven had increased their stake in the company. The Vanguard Group was the largest institutional investor with a stake of around 6.3%, adding 0.4 million AMZN shares.

Plus, Medtronic was Wellington Management’s top buy in the third quarter. To learn more about Wellington’s Q3 2019 holdings, please read Wellington Management: Analyzing Its Top Holdings.

In the third quarter, D.E. Shaw & Co. exited Lyft (LYFT), which constituted 0.1% of its total portfolio in Q2 2019. Please read Should Lyft Have You Feeling as Positive as Analysts? to know more about the company updates.

Shaw’s top holdings

In Q3 2019, Alibaba (BABA), LOW, Johnson & Johnson (JNJ), and ConocoPhillips (COP) were the second-, third-, fourth- and fifth-largest holdings of D.E. Shaw & Co. These companies constituted around 1.3%, 1.3%, 1.2%, and 1% of its portfolio of publicly traded securities.

To learn more about high-profile 13F filings, please read Bridgewater: What Are Ray Dalio’s Top Investing Ideas?

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