Hedge fund managers are known to risk some of their own cash alongside investor's money to show they have “skin in the game.”

But big-name investors running what are known as family offices, or firms that manage investments for a particular family, take that idea to a whole new level.

Billionaire Steve Cohen is a newly-added member to the family office crowd, joining the likes of fellow billionaires George Soros and Carl Icahn.

Best known for his long-tenured hedge fund SAC Capital Advisors, Cohen has been running rings around the market for decades. SAC Capital has averaged 30% annual returns for 18 years, according to Bloomberg.com.

Cohen's new gig, Point72, groups and invests more than $9 billion of his own assets together with assets from a handful of former SAC employees. And in the first half of 2014, the fund has already profited nearly $1 billion, according to The New York Times.

Although Point72 is a private firm, it is subject to certain SEC guidelines. One of the most insightful rules requires Cohen to report when the Point72 owns more than 5% of a publicly traded company.

Take a look at some of Cohen's largest August investments.

Insmed, Inc. (NASD: INSM)

This stock stands out as a high-conviction pick. Why? Cohen has had to submit two SEC filings in the past few weeks for his continued buying. His stake amounted to 5.21% at the end of July, but a more recent filing on August 11 showed that he’s bumped his ownership up to 5.4%.

Over the trailing month, this biopharma stock has tumbled by more than 31%. The stock slid dramatically after announcing that its flagship drug, Arikayce, will require two additional unexpected Phase 3 studies to gain approval from the FDA. Point72’s second purchase on August 11th was most likely an averaging down tactic to lessen the blow of the falling stock price.

C&J Energy Services, Inc. (NYSE:CJES)

On August 6th, Point72 disclosed a 5.4% stake in CJES, a major player in the controversial hydraulic fracturing space. The company made waves at the end of June by agreeing to merge with Nabors Industries (NYSE:NBR) in a deal valued at nearly $3 billion.

The stock recently fell by 10% following its latest earnings announcement. However, CJES expects the merger to positively impact earnings during its first year of operations.

Kraton Performance Polymers (NYSE:KRA)

KRA can now count Cohen as a significant shareholder after purchasing a 5.1% stake in the company.

The producer of engineer polymers hasn’t found the same type of support from sell-side analysts, however. It has received two downgrades so far this summer from UBS and Credit Suisse. That said, a consensus of analyst price targets comes in at $24.71 – that’s over 22% of upside from where the stock stands currently.

Kindred Healthcare (NYSE:KND)

Kindred is Cohen's only new purchase that carries a dividend yield, coming in at 2.1%. The operator of hospitals and nursing centers has taken a hefty spill in August after issuing lower guidance numbers.

Considering Cohen reported the purchase of KND shares on August 13, it appears that the manager thinks a rebound is ahead. Point72 increased its stake in the company to 5.1% following a 20% drop in stock price.

Risks to consider: Cohen’s methodologies have come under fire in the past, resulting in SAC Capital Advisor’s entering a guilty plea to insider trading and paying a $1.8 billion settlement. Although Cohen was never charged with any wrongdoing and aims to distance himself from the conviction, it is important to be cognizant of SAC's past.

Action to take --> While the closing of SAC Capital Advisors was the end of an era, a new one took its place. With more than two decades experience generating massive returns, Steve Cohen is still a force to be reckoned with among fund managers. Glimpsing into his personal portfolio through SEC filings seems to be the clearest look we’ll have into his office’s inner workings.

Gurus like Cohen tend to have a following because investors hope to piggyback on their investments... and for some that may be successful. StreetAuthority would like to offer an alternative: "The Hottest Investment Opportunities For 2015." This special report details 11 game-changing trends that could result in lucrative returns. For more information, click here.


Related Articles
  1. Investing

    In Search of the Rate-Proof Portfolio

    After October’s better-than-expected employment report, a December Federal Reserve (Fed) liftoff is looking more likely than it was earlier this fall.
  2. Personal Finance

    Is An Ivy League Degree Worth It?

    In 600 B.C. Aesop determined that a bird in the hand was worth two in the bush. Warren Buffett claims that this axiom can be used to determine the most valuable uses of capital. In this article ...
  3. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  4. Chart Advisor

    ChartAdvisor for November 27 2015

    Weekly technical summary of the major U.S. indexes.
  5. Retirement

    Suddenly Pushed into Retirement, How to Handle the Transition

    Adjusting to retirement can be challenging, but when it happens unexpectedly it can be downright difficult. Thankfully there are ways to successfully transition.
  6. Mutual Funds & ETFs

    The Democratization of the Hedge Fund Industry

    The coveted compensations of hedge fund managers are protected by barriers of entry to the industry, but one recent startup is working to break those barriers.
  7. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  8. Retirement

    Two Heads Are Better Than One With Your Finances

    We discuss the advantages of seeking professional help when it comes to managing our retirement account.
  9. Financial Advisors

    Tips on Passing the CFA Level I on Your First Attempt

    Obtain valuable tips and helpful study instructions that can help you pass the Level 1 Chartered Financial Analyst exam on your first attempt.
  10. Professionals

    The Best Financial Modeling Courses for Investment Bankers

    Obtain information, both general and comparative, about the best available financial modeling courses for individuals pursuing a career in investment banking.
  1. Are secured personal loans better than unsecured loans?

    Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
  2. Is Israel a developed country?

    Israel is considered a developed country, although it has substantial poverty and large income gaps. The International Monetary ... Read Full Answer >>
  3. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  4. How many free credit reports can you get per year?

    Individuals with valid Social Security numbers are permitted to receive up to three credit reports every 12 months rather ... Read Full Answer >>
  5. Is the Wall Street Journal considered to be a conservative publisher?

    The Wall Street Journal is controlled by Rupert Murdoch via Dow Jones Publications, which in turn is owned by Murdoch's News ... Read Full Answer >>
  6. Is Spain a developed country?

    Spain is a developed country. Nearly all organizations that analyze development status classify it as such. Spain has a strong ... Read Full Answer >>

You May Also Like

Trading Center