3/5/98 Dow Jones News Serv. 14:46:00 (SEE BOLD)
Dow Jones News Service
Copyright (c) 1998, Dow Jones & Company, Inc.
Thursday, March 5, 1998
Vinik - Intel Stake -2: Manager May Have Hedged Position
Vinik's fund runs a little closer to the plain type. He's taking both long
and short positions in U.S. stocks, and many say he's using leverage to boost
returns. It appears to be working. His fund reportedly returned more than 90%
to investors last year.
These days analysts say Vinik's sticking mostly to the tech sector, showing a
bias for smaller-cap names there. The data also indicate he's learned a lot of
the tricks of the hedge-fund trade. Names that appear on the top of the
"bought" list in one quarter have often been liquidated by the next quarter.
While the SEC data provide a snapshot of Vinik's activities, the picture's a
little blurry.
For instance, Vinik's U.S. equity assets at the end of last year were worth
about $2 billion, according to Technimetrics. But that number doesn't reveal
Vinik's possible stakes in bonds or international stocks. It also doesn't say
how much of the portfolio's assets are leveraged, or made up of borrowed money,
or indicate stocks he may have sold short.
All that means is that while the data show he had 62% of his U.S. stock
holdings in technology at the close of 1997, he may have short sold securities
to hedge 25%, 50% or even all of that bet.
Nevertheless, at the end of the fourth quarter, micro-cap, small-cap and
medium-cap firms made up 85% of the 175 stocks in his portfolio, according to
Technimetrics. Along with Intel and Citrix, his top holdings included Vitesse
Semiconductor Corp. (VTSS) and Maxim Integrated Products Inc. (MXIM), another
semiconductor manufacturer.
On the sell side, Vinik liquidated a stake in Jones Apparel Group Inc. (JNY)
which he had held for about a year, Technimetrics' Krosinsky notes. Vinik also
unloaded most of his position in telecommunications firm Ciena Corp. (CIEN).
- Julie Creswell; 201-938-2047;
julie.creswell@cor.dowjones.com
(END) DOW JONES NEWS 03-05-98
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