Billionaire Noam Gottesman’s 5 Favorite Stock Picks

Meena is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Noam Gottesman took the knowledge he gleaned from the halls of Lehman Brothers and Goldman Sachs and co-founded his own fund, GLG Partners, in 1995. Since then, the fund’s AUM has reached into the ten-figures, as has Gottesman’s personal wealth. Similar to quarters past, the fund is required by the SEC to release its positions four times a year in a document known as a 13F filing. We take particular interest in these filings, as we’ve found that the most popular small cap stocks amongst hedge fund managers beat the market by 18 percentage points a year on average; learn more about this strategy here. Let’s take a closer look at GLG’s five largest equity positions by market value.

Facebook & Splunk

Facebook (NASDAQ: FB) takes the top spot on our list, with GLG adding 330,000 shares to its position compared to a quarter prior. Loaded with 2.5 million total shares now, the fund’s holdings carry a market value of over $64 million. Facebook stock has struggled through this year, posting a 9.5% loss since the start of 2013. The social network has been in talks to purchase Israeli start-up Waze, although the deal may never come to fruition with Waze not willing to relocate to Silicon Valley. Rumors also hold that Google has come into the bidding picture as well. Billionaire Leon Cooperman of Omega Advisors has about 3.6million shares of Facebook in his portfolio; check out the fund’s positions here.

Splunk (NASDAQ: SPLK)
is an innovative software developer in the data collection and organization arena that has grabbed a $61.6 million chunk out of GLG’s AUM. The young $4.7 billion company has seen multiple new coverages from the sell-side with bullish tilts; most recently, Pac Crest and FBR have delivered positive comillionents. This sentiment has helped push the stock up nearly 60% in 2013 alone. Famed tech investor and billionaire Jim Simons of Renaissance Technologies has slightly under 1.1 million shares of Splunk – compare that to GLG’s 1.5 million.

The best of the rest

Walgreen (NYSE: WAG)
makes an appearance near the top of GLG’s portfolio with a $58 million investment from the fund, amounting to 1.2million shares. The retail drug store has had an outstanding 52 weeks in terms of price appreciation; the stock is up over 60% for those who jumped in this time last year. Besides that incredible growth aspect, income investors will like Walgreen’s 2.2% dividend yield, which was recently highlighted as a top dividend pick by Goldman Sachs (although the bank did remove Walgreen from its Conviction Buy list in March). Billionaire Israel Englander of Millennium Management owns roughly 600,000 shares of Walgreen.

Taiwan Semiconductor (NYSE: TSM)
leaves little to the imagination in terms of naming and its operations, but some may not know that Taiwan Semiconductor is the world’s largest contract chip manufacturer, commanding nearly 50% of the market share. GLG’s 3 million share investment gives the hedge fund’s position a market value of almost $53 million. In the company’s Q1 earnings announcement late last month, Taiwan Semiconductor raised its forecast for industry growth to 10% from 7% beforehand. The stock has seen a fairly steady rise since last year, up 36% since May 2012. Billionaire Daniel S. Och of OZ Management has a $69million call option position in Taiwan Semiconductor.

Qualcomm (NASDAQ: QCOM)
rounds out the bottom of GLG’s top five and is no surprise to those analyzing hedge fund 13Fs, as Qualcomm consistently appears in many hedge funds’ top 10 holdings (joining names like AIG, Google, and eBay). Besides garnering the telecommunications player with bullish one-year price targets, analysts from the likes of Northland Securities, Raymond James, and Tigress Financial Partners have given Qualcomm bullish ratings since mid-March. Billionaire Ken Fisher of Fisher Asset Management owns nearly $600million worth.

Final thoughts

Noam Gottesman doesn’t receive the same level of hype that fellow billionaires like Warren Buffett or David Einhorn receive, but this may give piggybackers a leg up on their competition, so to speak. From Qualcomm’s favoritism amongst the smart money’s best, to the attractiveness of Taiwan Semiconductor, Walgreen, Splunk and Facebook, Gottesman has amassed an interested equity portfolio worth further research.

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This article is written by Eric Winter and edited by Jake Mann. Insider Monkey's Editor-in-Chief is Meena Krishnamsetty. They don't own shares in any of the stocks mentioned in this article. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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