Caxton Associates Hedge Fund | Exclusive 13F Holdings Analysis

Caxton Associates

Caxton Associates Hedge Fund Holdings

Caxton Associates Hedge Fund | 13F Holdings AnalysisThis post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.

Up next in the macro hedge fund tracking series we have Caxton Associates, ran by Bruce Kovner. Taken from Wikipedia, Kovner's bio is as follows: "Kovner's first trade was for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of hedge fund risk management. In his eventual role as a trader under the legendary Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which today manages over $10 billion in capital and has been closed to new investors since 1992." Year-to-date, Caxton Associates was up 5% as of a few weeks ago.

So, now that we've got a background on Kovner and Caxton Associates, let's take a quick look at his portfolio highlights. Keep in mind that this is merely a brief summary of Caxton's top holdings. Due to the time sensitive nature of the 13F material, I wanted to get this information posted before the next set of filings come out in November.

Top 20 Holdings by % of portfolio
1. Compania Cervecerias Unidas (CCU) - Increased position by 72934%, from 25,000 shares to 18,233,668 shares
2. Electronic Data Systems (EDS) - New Position
3. Activision (ATVI) - New Position
4. Monsanto (MON) - Increased position by 41 %
5. Rockwood Holdings (ROC) - Increased position by 68.8%
6. W-H Energy Services (WHQ) - Increased stake by 195%
7. Occidental (OXY) - Increased stake by 65%
8. ChoicePoint (CPS) - Decreased position by <>
9. DirecTV (DTV) - Decreased stake by 25%
10. W.R. Grace (GRA) - Boosted stake by 8%
11. Qualcomm (QCOM) - Boosted stake by 44.6%
12. Coca Cola (KO) - Decreased position by 12.5%
13. Rural Cellular (RCCC) - Increased stake by 12.4%
14. Research in Motion (RIMM) - Boosted stake by 8.7%
15. Service Corporation (SCI) - Increased position by 32%
16. Nucor (NUE) - Boosted position by 37%
17. (ANST) - New position
18. XTO (XTO) - Boosted stake by 150%
19. Stewart Enterprises (STEI) - Increased position by 12%
20. Gilead (GILD) - Decreased position by 26.7%

Kovner's Caxton Associates definitely disassociate themselves from the rest of the macro pack when it comes to the equity side of their portfolio. While their portfolio does hold typical energy and technology names often seen in other hedge fund portfolios, they also hold seemingly obscure names that I have yet to see pop up in any other funds I track. So, Kovner and his team may have discovered some diamonds in the rough here. In particular, I want to focus on his top holding: Compania Cervecerias Unidas (CCU). In the quarter prior to the filing, he held just 25,000 shares of this name. Then, over this past quarter, he ratcheted up his holdings in the name big time. He increased his position by 72,934%, bringing it all the way up to his firm's top holding, with a market value of over $642 million at the time of the filing. Needless to say, they bought this name with conviction. And, although I've seen numerous other funds buying up shares of Latin & South American beverage companies, this is the first fund I've seen pick up this name. So, definitely keep an eye on it.

Additionally, I want to point out his holdings in Rocwood Holdings (ROC), W-H Energy Services (WHQ), and Service Corporation (SCI). These are three other names I am seeing for the first time amongst the hedge funds I track. And, he was adding across the board to all three names. Caxton added to WHQ the most, increasing their position by 195%.

Now, turning to the 'hedge fund favorite' names that tend to pop up in numerous hedge fund portfolios that I track, we see Caxton holds positions in Qualcomm (QCOM), Research in Motion (RIMM), XTO Energy (XTO), Occidental (OXY), and Gilead (GILD). Caxton was out adding pretty moderately to all these names. OXY and XTO are easily two of the favorite equity energy plays amongst various hedge funds. And, you have to wonder how they affected their portfolio, given the volatile ride energy stocks have seen as of late. Turning to tech, we see that Caxton, like so many other funds, enjoy large positions in both QCOM and RIMM. As I've noted before, QCOM is easily a top five most common equity holding among the hedge funds I track. And, just like energy, technology stocks have been whipsawed around a lot recently. So, although Caxton was out adding this past quarter, we'll have to see if they were still adding to these names come the next 13F filing.

We already knew hedge funds (and macro funds in particular) had a rough July. And, it's easy to see why, with the heavy commodity exposure many of them had. What we don't yet know is how they've rebounded (if at all). Lastly, I just want to re-emphasize that since Caxton is a macro fund, they obviously have the majority of their positions in the commodity, currency, futures, or other markets. But, at the same time, they still have a sizable chunk of money in the equity markets.

Caxton Associates' full 13F filing listing every position can be found at the SEC.

Guest post by Market Folly

Please check here next week for some further analysis on specific holdings of leading hedge funds.

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