Hedge Fund Ardsley Partners Ramps Up Healthcare Holdings

merger transaction complete
General Electric (GE) Calls
XTO Energy (XTO)
Gilead Sciences (GILD)
CVS Caremark (CVS)
China Natural Gas (CHNG)
Halliburton (HAL)
Chesapeake Energy (CHK)
Plains Exploration (PXP) Calls
State Street (STT)
Brocade Communications (BRCD)
Tellabs (TLAB)
Smart Balance (SMBL)
Exco Resources (XCO)
Asiainfo (ASIA)
Thermo Fisher Scientific (TMO)

Top 15 Holdings by percentage of assets reported on 13F filing

Google Calls: 6.12%Proshares Ultrashort 20 Year Treasury Calls: 5.74%Merck: 5.41%Healthcare ETF Calls: 5.11%Merck Calls: 4.51%Telvent: 4.39%Yongye (YONG): 4.25%Apple Calls: 3.47%Zhongpin: 3.08%Rino International (RINO): 2.54%Pfizer: 2.24%Teva Pharmaceuticals: 2.08%Direxion Small Cap Bear 3x Calls: 2.03%Mylan (MYL): 1.95%American Public Education: 1.92%

The most intriguing aspect of Hempleman's portfolio is the fact that the majority of his top holdings are brand new positions and he sold completely out of previous large positions. So, we're definitely seeing some significant turnover here. It's apparent that Ardsley Partners fancies using options to make some of its investment wagers and we see that the fund is using calls on ultrashort exchange traded funds. Since they are betting that an ultrashort fund will rise via calls, we can interpret this as a short position, a hedge, or just a bearish bet. Hempleman's largest bearish wager is on 20 year treasuries with calls on TBT. In the past, we've constantly detailed how many hedge funds are betting on rising interest rates.

Turning back to the equities portion of its portfolio, Ardsley initiated Pfizer as a new stake in the fourth quarter, a position we've noted that many hedge funds added. Interestingly enough, they also own two of the major generic pharmaceutical producers in Teva and Mylan. As you can see, health is a very apparent theme in Hempleman's hedge fund portfolio.

Of the stocks that Ardsley Advisory Partners sold completely out of last quarter, there are many notable names. Hempleman's hedge fund dumped past large positions in Schlumberger calls, Google, Alcatel-Lucent, and Apple. So, there is an apparent shift in Ardsley's portfolio here as it dumps common stock of certain names in favor of call options. Overall, Ardsley reduced basic materials exposure and ramped up healthcare exposure.

Assets reported on the 13F filing were $607 million this quarter compared to $525 million last quarter, a 15% increase. Remember that these filings are not representative of the hedge fund's entire base of AUM

View the Original article