WRLD drove Valiant’s Performance in January. AMZN did not
Valiant Capital Management returns an estimated -7.57% for January 2016 - the fully hedged version returns -1.99%
Valiant Capital Management generated a -7.57% return on their publicly disclosed long portfolio for the month ending January 2016, underperforming the S&P500 by 758 basis points (bp). On a hedged basis, the portfolio would have returned -1.99% StockAlpha over the same period. Valiant's StockAlpha reflects the return of the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Health sector contributed the most to StockAlpha during the month.
Positive Contributors to Valiant's Returns
Valiant’s position in World Acceptance Corp. (WRLD) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of January 2016, Valiant's 0.6% position in World Acceptance Corp. (WRLD) increased in value by 5.3%, contributing 0.03% (0.6%*5.3%=0.03%)to the long portfolios overall return. Looking at Valiant's portfolio through a fully hedged StockAlpha lens, the holding of World Acceptance Corp. (WRLD) also provided the largest contribution to fully hedged returns. World Acceptance Corp. (WRLD) returned -2.7% during the month compared to the Cons. Disc. sector, which returned -5.8%. As a result, after taking into account World Acceptance Corp. (WRLD)'s beta relative to its sector, the position contributed 0.1% of StockAlpha to the Valiant’s monthly performance.
Negative Contributors to Valiant's Returns
Much of the drag on Valiant’s long-portfolio during the month can be attributed to the holding of Amazon.com Inc. (AMZN). Over the month of January 2016, the manager's 10.9% position in Amazon.com Inc. (AMZN) returned -10.2%, contributing -1.11% (10.9%*-10.2%=-1.11%)to the long portfolios overall return. Looking at Valiant's portfolio through a fully hedged StockAlpha lens, the holding of JD.COM INC ADR (JD) provided the most negative contribution to fully hedged returns. JD.COM INC ADR (JD) returned -14.4% during the month compared to the Cons. Disc. sector, which returned -5.8%. As a result, the position contributed -0.5% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Among Valiant’s top 10 largest positions, Apple Inc (AAPL) is the name that is owned by most other hedge funds. 28.3% of hedge funds within Symmetric's universe had a position in Apple Inc (AAPL) as of March 31, 2015, making it a consensus name relative to other stocks. Valiant initiated its position in Apple Inc (AAPL) 6.5 years ago. Other hedge funds that have significant ownership stakes in Apple Inc (AAPL)as a percentage of their portfolio include Raiff Partners Incorporated (32.3% position initiated 2 years ago), Icahn Associates Corp (20.9% position initiated 2 years ago) and Greenlight Capital Inc (20.9% position initiated 5.3 years ago). Overall, Valiant's book is neither consensus or contrarian, with the average position held in the portfolio held by 16% of hedge funds.
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