Masters Capital Management LLC's 13F Reports Show Changes in Q3-Q4 2022 Holdings

Masters Capital Management LLC is a hedge fund management company founded in 1997 by Mike Masters. The firm employs a macro, global long/short strategy and manages a concentrated and actively managed portfolio. The firm recently filed its 13F report for Q3 2022 and Q4 2022, detailing the changes to its holdings.

Through a comparison of the two quarters’ holdings, the data shows that Masters Capital Management LLC increased its holdings in some stocks, decreased others, and entered into new positions. Let's take a closer look at some of the highlights:

First, one of the largest changes was the firm's decision to decrease its holdings in Citigroup Inc substantially. In Q3 2022, the firm held 4 million shares, but by Q4 2022, it only held 2 million shares, which is a 45.7% decrease. The Q3 2022 value of the holding was $166,680, but by Q4 2022, the value was only $90,460. This sharp decline in holdings and value is likely due to concerns over the financial institution's performance, which has been hit by issues such as legal costs and compliance issues.

On the other hand, in Q4 2022, Masters Capital Management LLC increased its holdings in Alibaba Group Holding Ltd. The firm’s holdings increased to 1 million shares from 0 in Q3. Alibaba is now the fund’s second-largest holding, with a value of $88,090. The increase in holdings suggests that Masters believes in Alibaba's future growth prospects despite regulatory headwinds in China.

In the energy sector, Masters Capital Management LLC entered into new positions with First Solar Inc and Freeport-McMoRan Inc. In Q4 2022, the firm held 500,000 shares of First Solar Inc and 1 million shares of Freeport-McMoRan Inc. First Solar Inc used to be a non-existent stock in Q3 2022, while a holding in Freeport-McMoRan doubled from 1 million shares to 2 million shares in Q4 2022.

Moreover, the hedge fund continued to make bullish bets on Caterpillar Inc, buying 200,000 shares of put options in the stock. Options give investors the right, but not the obligation, to buy or sell a stock at a certain price and expiration date. So, in this instance, the put options suggest that Masters Capital Management LLC is betting that the stock price for Caterpillar will decrease.

In the automotive sector, Masters Capital Management LLC significantly increased its position in Ford Motor Co. Del by 393.9%. In Q3 2022, the firm held 1 million shares, but in Q4 2022, it held 5 million shares. The Q3 2022 value of the holding was $11,200, but by Q4 2022, the value skyrocketed to $55,316. This substantial increase marked the greatest increase in value within the portfolio during this period.

In addition, the fund also increased its holdings in Uber Technologies Inc. by 86.6% in Q4 2022, with 2 million shares compared to 1 million shares in Q3 2022. The Q4 2022 value of the holding was $49,460.

Furthermore, Masters Capital Management LLC divested its holdings in United Parcel Service Inc, Transocean Ltd, Party City Holdco Inc, Pitney Bowes Inc, Coco Corp, Embraer S.A, SSE Mining Inc, Sequans Communications S.A, Petrobras Put, and Tesla Call, etc. All these holdings were previously held in Q3 2022.

Takeaways

Masters Capital Management LLC made significant moves in the quarter, entering new positions, dropping positions, and increasing or decreasing their exposure to current holdings. Some of their largest holdings saw large reductions, such as Citigroup Inc, while others saw the addition of new positions or an increase in holdings, like Alibaba Group Holding Ltd, First Solar Inc, Freeport-McMoRan Inc, Ford Motor Co. Del, and Uber Technologies Inc.

These various moves suggest that Masters is taking a shrewd, macro approach to investing, one that is presciently adjusted for the current market environments in each of the sectors they are investing in. Data from the CSV shows us that when the market changes, so do the holdings of Masters Capital Management LLC.