Bacon Continues to Pursue Global Macro Strategy

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Dec 16, 2014
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Regarded by many as one of the top traders of the 20th century, hedge fund manager Louis Moore Bacon (Trades, Portfolio) prefers a global macro investment strategy, and there is a generous mix of international stocks in which he traded during the third quarter.

Moore Global Investments, the firm he founded in the wake of the success of Moore Capital Management, a leading New York City-based hedge fund, had a return of 20.6% in 2009. It slumped to 3% in 2010 and has struggled in 2014. Nevertheless, his transactions in the third quarter show his continued interest in international companies.

Bacon added holdings in more than 100 companies to his portfolio in the third quarter. The single addition that had the greatest impact on his portfolio was his purchase of 1,520,000 shares of Alibaba (BABA, Financial), the Chinese ecommerce web site, for an average price of $89.95 per share. That acquisition had a 3.2% impact on his portfolio.

Bacon also added 450,000 shares of McDonald's Corp (MCD, Financial), the Illinois-based hamburger chain, to his portfolio at an average price of $95.32 per share. The transaction had an impact of 1% on his portfolio.

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All of Bacon’s other new holdings had an impact of less than 1% on his portfolio. Among the companies that are new to his portfolio are Mohawk Industries Inc (MHK, Financial), Twitter Inc (TWTR, Financial), Kellogg Co (K, Financial), Hanesbrands Inc (HBI, Financial), Colgate-Palmolive Co (CL, Financial), MasterCard Inc (MA, Financial) and Broadcom Corp (BRCM, Financial).

Bacon added to existing holdings in more than 50 companies in the third quarter. The transaction that had the greatest influence on his portfolio was his purchase of 4,659,000 shares of iShares FTSE/Xinhua China 25 Index (ETF) [FXI] for an average price of $40.04 per share. That had a 4.16% impact on Bacon’s portfolio.

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He bought 2,572,698 shares of Northstar Realty Finance Corp (NRF, Financial), a New York-based commercial real estate company, for an average price of $17.53. That deal had a 1.09% impact on his portfolio.

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Bacon also purchased 538,100 shares of Restoration Hardware Holdings Inc (RH, Financial), a California-based home furnishings and domestic products company, for an average price of $83.66 per share. The transaction had a 1.03% impact on his portfolio.

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Divestitures and reductions

Bacon sold his stakes in more than 100 companies in the third quarter. He sold all 125,000 shares he held in SunPower Corp (SPWR, Financial), a California-based solar energy company, for an average price of $33.3 per share. The transaction had a -2.6% influence on his portfolio.

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Bacon sold his 650,000-share stake in Procter & Gamble Co (PG), a consumer products company based in Cincinnati, for an average price of $81.99 per share. The deal had an impact on his portfolio of -1.2%.

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Among the companies in which Bacon sold all his holdings were Hanwha SolarOne Co Ltd (HSOL), Lorillard Inc (LO), Hilton Worldwide Holdings Inc (HLT), Avis Budget Group Inc (CAR), Yahoo! Inc (YHOO), Chipotle Mexican Grill Inc (CMG), Marathon Oil Corp (MRO), Morgan Stanley (MS), Dean Foods Co (DF), Dick's Sporting Goods Inc (DKS), PepsiCo Inc (PEP) and Time Inc (TIME).

He sold portions of his holdings in 61 companies.

Bacon sold 899,843 shares of Apple Inc (AAPL), a California-based consumer electronics company, for an average price of $68.19 per share. The sale had an impact of -1.98% on his portfolio.

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He sold 318,364 shares of Baidu Inc (BIDU), a Chinese internet company, for an average price of $211.32 per share. That deal had an impact of -1.42% on his portfolio.

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Bacon also sold 1,430,000 shares of Hartford Financial Services Group Inc (HIG), a Connecticut-based investment and insurance company, for an average price of $36.19 per share. The transaction had a -1.23% impact on his portfolio.

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Among the other companies of which Bacon sold part of his stakes were Dollar General Corp (DG), Facebook Inc (FB), Delta Air Lines Inc (DAL), AbbVie Inc (ABBV), eBay Inc (EBAY), Pfizer Inc (PFE) and Tyson Foods Inc (TSN).

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