Steven Cohen Portfolio: Diving into $33B Assets and Investment Strategies

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Predrag Shipov
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Steven Cohen Portfolio

You may know Steven Cohen as a founder of SAC Capital which was shut down after one of his top managers was convicted of insider trading. That case came with a record-high fine of $1.8 billion. Or you may know him as the head of a prominent hedge fund Point72 which is one of the industry leaders. Since the inception of the fund in 2018 Steven Cohen's portfolio grew to $33 billion in assets under management.

His portfolio is highly diversified and is made of over 1,300 stocks. The highest weighted holding is Amazon (NASDAQ:AMZN), followed by another stock from the Magnificent Seven group, the Meta (NASDAQ:META). In third place is another tech giant Dell (NYSE:DELL), and in close fourth is Union Pacific Corp (NYSE: UNP).

Cohen also holds over 700 options holdings. The largest call option is in the SPDR S&P 500 ETF trust, in which he also holds a major put option. In the rest of the article, we will focus not only on Cohen’s current portfolio, but also on his investing strategy, and several controversial decisions from the past. Is he the villain in the hedge world, or a genius who works as a money-making machine? Stay with us for more on that.

Key Takeaways from His Portfolio

Cohen holds major stakes in AI giants like Meta, Amazon, and Nvidia.
He keeps his portfolio well diversified among several sectors, minimizing the risk potential.
Point72 Asset Management is involved in both long and short trading, and generating gains from both market directions.

In 2020 Cohen acquired 97% shares of the New York Mets. The club still hasn’t reached its peak potential which would bring significant positive returns to Cohen’s portfolio.
Final Thoughts

Steven Cohen is both a controversial figure in the financial world, but in all regards a highly successful hedge fund manager. The downfall of his first company SAC Capital didn’t hold him down, and today he is running a new fund that is delivering results at the top of its class.

Making bets on industries and companies that are often overseen has been a trademark of his strategy. By doing so he contributed to projects and innovations that would most probably be left behind. Recent performance shows a potentially positive outlook, and that Cohen even after several decades in the business still has more than enough to prove and deliver.

Key Holdings

  • Amazon Com (NASDAQ:AMZN) with 2.15% of the portfolio

Cohen's interest in Amazon materialized long before he founded Point72 Asset Management. This holding dates back to 2014 when he was buying Amazon stocks for prices as low as $15. When we look at the history of the trade, he averagely spent $122 on their stock, while its present value is $184. The value of the holding is $709 million.

  • Meta Platforms (NASDAQ:META) with 1.06% of the portfolio

Meta’s 991 thousand stocks are currently worth about $350 million, which is a significant trimming from two years ago when he owned over 4.5 million shares. The average buying price of Meta stocks was $206 while its value jumped to $441 generating a massive surplus for the investors. Cohen showed a great interest in the AI sector of Meta, and will most likely continue to hold a significant stake in the company.

  • Dell Technologies (NYSE:DELL) with 0.94% of the portfolio

After Dell did a spinoff of 81% of their shares in 2021 resulting in a 50% value loss, their stock has seen a steady rise. Currently, the price paid for their stock is $123 while before the spin it reached $110. Cohen owns 4.05 million shares with a price tag of $309 million, which is a rise from Q3 2023 when the number was at 3.37 million shares.

  • Union Pacific Corp (NYSE:UNP) with 0.88% of the portfolio

Cohen did exit from this publicly traded railroad holding company in 2022. However, he quickly reinvested his capital buying 400 thousand stocks at $221. The current stock price is at $237 generating a modest return. From 2022 he slowly increased his stake reaching 1.18 million shares. UNP's holding value is an estimated $290 million, while Cohen invested about $243 million.

  • Fox Corp Class A (NASDAQ:FOXA) with 0.88% of the portfolio

Cohen made a major investment decision in late March, acquiring 9 million Fox Class A shares at $30. Beforehand he owned about 650 thousand shares, and this move spared gossip about his interest in the media giant. His stake is valued at $280 million, while he owns about 5% of all Fox stocks. Besides his almost 10 million shares holding, Cohen also has 2.37 million shares exercisable in options.

  • Nvidia Corp (NASDAQ:NVDA) with 0.83% of the portfolio

Potentially Cohen could have held on to his 1.7 million share of Nvidia holding and watched its price rise during 2024. However, he decided to sell 1.1 million shares in late 2023 robbing him of almost all the gains that came afterward. His 557 thousand Nvidia holdings are valued at $275 million, while the capital he earned from the trimming he invested in other AI-oriented companies like Palantir.

  • Boston Scientific Corporation (NYSE:BSX) with 0.82% of the portfolio

Boston Scientific is Cohen’s long-time favorite. Since Q3 2023 he held a massive 6.42 million share stake. A quarter later he decided to trim it to 1.7 million shares, reducing it by 26%. Holding is now valued at $272 million. Cohen’s average buying price of BSX stocks was $51 while its value today is at $72.

  • SPDR S&P 500 ETF Trust (NYSEARCA:SPY) with 0.81% of the portfolio

The oldest and often favorite index tracking trust is an important part of Cohen’s portfolio. Like his portfolio doesn’t offer enough diversification, he is still managing to invest in a very diverse trust. After owning just 10 thousand stocks in Q3 2023 he bought 554 thousand shares raising the value of the holding to $268 million.

  • FedEx (NYSE:FDX) with 0.80% of the portfolio

Fedex is another major holding increase in late 2024. After owning 646 thousand shares, he acquired an additional 400 thousand at $258. The average buying price of FedEx stocks is at $232 generating modest returns. Fedex holding rose in value to $263 million while the stock price is $262.

  • CSX Corp (NASDAQ:CSX) with 0.74% of the portfolio

Cohen often trades CSX stocks, completely exiting and then some time again starting trading their shares. His current holding dates to Q3 2020 when he bought 5.42 million shares at $24.67 and quickly sold 4.76 million at $28.73. Since then he increased his position to 7.05 million shares valued at $244 million. Cohen paid on average CSX stocks about $30.78 while its price rose 10% with it currently being $33.57.

Sector Allocation

Due to the sheer number of holdings Cohen’s portfolio is highly diversified. His holdings are divided among all industries, with Consumer Discretionary, Technology, and Healthcare at the helm. Current sector allocation goes as follows:

  • Consumer Discretionary with 22.3% of the portfolio valued at $7.35 billion
  • Technology with 17.3% of the portfolio valued at $5.70 billion
  • Healthcare with 17.2% of the portfolio valued at $5.67 billion
  • Industrials with 14.2% of the portfolio valued at $4.68 billion
  • Energy with 5.75% of the portfolio valued at $1.88 billion
  • Utilities with 5.36% of the portfolio valued at $1.74 billion
  • Finance with 4.73% of the portfolio valued at $1.56 billion
  • Consumer Staples with 3.86% of the portfolio valued at $1.27 billion
  • Real Estate with 2.18% of the portfolio valued at $719 million
  • Telecommunication with 1.89% of the portfolio valued at $623 million
  • Biography and Career of Steven Cohen

Steven Cohen was born in New York to a Jewish family. He attended Wharton at the University of Pennsylvania where he obtained a degree in economics.

His career in finance began after graduation at the Gruntal & Co. Unlike the majority of hedge fund managers he didn’t start as an analyst but as a junior trader. Cohen was deployed in the options arbitrage division of the company.

Cohen’s trading talents were quickly noticed since he made an $8 thousand profit on the first day. Six years later he was managing a $75 million portfolio, skyrocketing his career. Cohen was in charge of six traders who were earning about $100,000 a day.

This potential had to be unleashed so Cohen started his hedge fund SAC Capital Advisors in 1992. During the next two decades, the fund became one of the most successful funds in history.

In 2010 Steven Cohen’s fund was under an investigation from the Securities and Exchange Commission. Drugmaker Wyeth accused the fund of engaging in insider trading. As a result, Wyeth lost a lot of money, and they were after Cohen and the fund.

However, Cohen was never charged and instead, his fund was found guilty with a fine of $1.8 billion. Also, portfolio manager Mathew Martoma was found guilty and was sentenced to nine years in prison. Cohen was banned from managing investment funds between 2016 and 2018, due to lack of supervision of his managers.

After Cohen’s previous company was shut down he opened a new asset management company Asset72. In it, he is the chief executive officer, and the company enforces a diverse approach to investing including global venture capital and growth equity strategies.

Steven Cohen Investment Philosophy & Strategies

Behind success in Cohen’s lengthy career stands a well-devised strategy that is based on several crucial elements. Cohen is willing to take high-risk opportunities in search of extra returns, but he bases them on a detailed and thorough analysis.

High-Risk Bets

Bets that come with a high risk turn down most of the big players, but not Cohen. He is willing to take a risk if he sees high reward potential. However, he emphasizes the importance of risk management as a part of his strategy. To hedge his investments he places stop/loss orders and closely monitors his investments in case they demand a quick reaction.

Contrarian Approach

As a part of his risk-taking strategy, the contrarian approach comes as a natural element of it. Cohen is willing to go against the crowd and find an investment that others would not dare or choose to look for. Making bets against the majority of the market is considered risky, but Cohen thrives in it, and some of his best investment decisions were made from contrarian decisions.

Focus On Fundamental Analysis

Making risky decisions without a background check is highly unproductive in the investment world. That is why Cohen employs fundamental analysis that aims to get into the basics of the target investment.

Cohen checks the financial statements and economic indicators before advancing. He checks the cash flow, the P/E ratio, and the competitive outlook. Besides checking the company he is investigating industry trends and does the company have the potential to bring innovation to the field.

In the end, only fundamentally strong companies can have a place in Cohen's portfolio. If they are followed with a beneficial risk to reward even better ratio.

Employment Of Technical Analysis

In unison with a fundamental analysis, Cohen prefers to dive deep into technical analysis. By analyzing past trends, prices, and industry movements, he aims to predict future price development. That is especially useful for his short-term investment decisions.

Timing The Market

With an extensive technical analysis market timing comes as a natural development of the strategy. With the help of technical analysis, he tries to predict how the market will move in the future.

At the same time, he is monitoring macroeconomic indicators, including major geopolitical events, and developments in the economic world, which can result in major market shifts.

When he gets all the necessary information in place, based on those he makes adjustments to his holdings. Since he is often highly active during the high volatility periods on the market, he needs to time the market properly. Throughout his career, Cohen showed that he had a keen sense for both entering and exiting from holdings.

Investing In What He Understands

Cohen is not the first investor who invests in sectors and companies that he understands. Understanding how something functions allows him to better analyze the big picture, and to follow the investment through time.

Cohen's favorite sectors to invest in are restaurants, semiconductors, retail, and the general healthcare sector.

Steven Cohen Portfolio Performance Analysis

Historical Performance

For over two decades in active leadership roles in SAC Capital Cohen managed to deliver an average annual return of 25%. Delivering this type of return over a prolonged period is a rare feat, even for the veterans and stars of the hedge fund industry.

Notable Success

  • Success During Dot-Net Bubble In the late 90s, Cohen’s portfolio value surged by 70% due to investments in innovative leaders. When the bubble burst in the 2000s, the portfolio gained another 70% due to Cohen’s well-timed shorting of the stocks.
  • Equinix Holding In 2007 Cohen through SAC Capital invested $76 million into Equinix which was at the time leader in the cloud sector. A month later the stock price rose 32% generating solid returns to the investors.
  • Ardea Biosciences Investment In 2012 Cohen made a substantial $26.7 billion bet on Ardea Biosciences. Just three weeks later pharmaceutical giant AstraZeneca announced that it will acquire Ardea Biosciences. This deal significantly increased the value of Cohen’s investment, raising it to $40 billion.

Notable Failure

  • ImClone Systems Insider Trading Scandal Marta Stewart, a prominent businesswoman, was charged in 2002 with insider trading related to ImClone Systems. Investigation showed that Steven Cohen and SAC Capital were on the receiving end of the deal, making profits from non-public information.
  • Human Genome Sciences Insider Trading Scandal Yves Benhamou, a French doctor was sentenced in 2012 to three years in supervised release and a fine of $6 million. The cause for these drastic measures was the sharing of sensitive information about drug clinical trials to hedge fund manager Mathew Martoma. At the time Martoma worked in CR Intrinsic, a fund that was a part of SAC Capital.

Downfall of SAC Capital

The fund acquired $700 million long positions in pharmaceutical companies Elan and Wyeth. These companies shared the development of a cure for Alzheimer's disease. When they announced the second stage of the drug trials brought disappointing results the stock price plummeted.

However, SAC Capital managed to not just avoid loss but generate a gain of $276 million. This came as a result of acquiring sensitive information a week before, which allowed SAC Capital not only to exit from their long positions but to short the stocks.

As a result, Mathew Martoma, portfolio manager of SAC Capital was indicted to nine years in prison for insider trading. Besides that, SAC Capital was ordered to pay a $900 million criminal penalty, and $1.8 billion in financial penalties.

Future Outlook

From the available data, Point72 has generated 33% three-year cumulative gains for the top 20 holdings. The top 50 holdings in the same timeframe generated 30% gains. These are very solid results and can be compared to the results of Cohen’s old SAC Capital portfolio.

Regarding Cohen’s strategy, he is still continuing with his bold strategy of making contrarian bets with strong returns. He also believes that the AI sector has a significant driving potential in the future and that it will continue to generate returns. Cohen sees it as a sector that will drive innovation across all industries, and he will continue to invest in it.