Fri, Oct 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Microsoft attracting major hedge funds - report

Tuesday, August 31, 2010
Opalesque Industry Update - Technology and software giant Microsoft Corp., has attracted the attention of major hedge fund managers in the second quarter. TPG-Axon Capital Management’s Dinakar Singh and Greenlight Capital’s David Einhorn, both raised their Microsoft shares, to take advantage of record low price-to-earning multiples, reported Reuters.

Microsoft shares fell 20% from May to June, but market analysts predict a major rebound in the last quarter of this year. Whitney Tilson, Managing Partner of T2 Partners LLC and the Tilson Mutual Funds, who also bought Microsoft shares in the second quarter, told Reuters that the software firm’s stocks are currently trading “insanely cheap for a company of this caliber and market position.”

Other hedge funds which saw an undervalued opportunity in Microsoft’s Windows 7 operating system and Office franchise, are John Griffin's Blue Ridge and Thomas Claugus's GMT Capital, the report said.

Patrick Becker Jr., at Becker Capital Management explained that although Microsoft is a lot more profitable than its rival Apple Inc., the latter it is rewarded with a higher multiple by investors excited by a stream of innovative products like the iPhone and iPad. Microsoft’s value is overlooked in comparison.

Early this month, Einhorn reported a major move into the technology sector when he doubled his stake in Microsoft to 66 million shares up from 3.4 million shares as of March 31, and in Xerox by more than 90%, from 6.5 million to 13.5 million shares. In his quarterly regulatory filing with the Securities and Exchange Commission, Einhorn added he also bought 312,500 shares in Apple Inc, according to another Reuters report.

Each of Einhorn's Greenlight Capital funds posted returns of 1.6%, 2.2% and 0.8%, respectively during the second quarter of this year, according to the firm’s quarterly letter to investors. By comparison, the benchmark Standard & Poor's 500 and Dow Jones industrials average each lost at least 6% in the period (see this month’s Opalesque Exclusive here).

Hedge funds also stocking up in steel broadcast towers
Hedge funds have also been seeking out surer ways to profit from the growing popularity of mobile web-surfing. According to Reuters yesterday, investors are hugely attracted to the low-risk, high-growth prospects of the steel broadcast towers operated by American Tower Corp, Crown Castle International and SBA Communications.

As a result, several of the largest equity-oriented hedge funds, including Andreas Halvorsen's Viking Global Investors, Julian Robertson's Tiger Global Management, Steve Mandel's Lone Pine Capital and Domenic Ferrante of Brookside Capital Investors, boosted their positions in one or more of the stocks in the second quarter, according to a Thomson Reuters survey of regulatory filings.

Microsoft to spend close to $1bn in marketing blitz for Windows Phone 7
In a bid to catch up against rivals Apple and Google, Microsoft has announced plans to spend at least $400m to market its Windows Phone 7 operating system, during the upcoming holiday season.

But a telecom analyst for Deutsche Bank Jonathan Goldberg predicted that Microsoft may end up spending $1bn to make and release the operating system as the firm continues to lose ground in the increasingly crowded smart-phone market by Apple's iPhone, Research in Motion's BlackBerry and Google's Android, which is the most popular smart-phone operating system in the U.S.
- Precy Dumlao
PD

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad