In the second quarter, Davidson Kempner Capital Management (DKCM), a notable hedge fund sponsor, made some interesting moves in its investment portfolio. The firm disclosed its revised form to the Securities and Exchange Commission, revealing its positions in Exxon Mobil, Domino's Pizza, and Coca-Cola, as well as its exit from CVS Health.
New Positions
DKCM purchased 80,000 shares of Exxon Mobil stock during the second quarter. Interestingly, this marks a significant change in their strategy as they did not own any Exxon stock in the earlier part of the year. It seems that DKCM is betting on Exxon's recent performance as the stock experienced an impressive 80% increase in 2022, surpassing the drop of 19% in the S&P 500 index. Although Exxon's earnings have been affected by declining oil prices, a recent report on the company's stance on climate change had little impact on its share value.
Another new addition to DKCM's portfolio is Domino's Pizza. The hedge fund purchased 36,100 shares of the popular fast-food chain in the second quarter. Domino's has seen a revival in the second half of 2023, with shares rising by 13%. This positive trend follows a slight slip of 2.8% in the first half of the year. Notably, the company's stock had suffered a decline of 39% last year due to a decrease in demand for pizza delivery as pandemic restrictions eased. However, a recent deal with Uber Technologies' Uber Eats and Postmates units has sparked investor interest, potentially leading to an estimated $1 billion in new sales.
Exiting CVS Health
In a surprising move, DKCM decided to exit its investment in CVS Health during the second quarter. While the reasons behind this decision are unknown, it indicates a shift in DKCM's investment strategy and priorities.
About Davidson Kempner Capital Management
DKCM, managing assets worth $38 billion, describes itself as employing a bottom-up, fundamental method of investing with an event-driven focus and a multi-strategy approach. It is recognized as one of the top 10 hedge funds by assets, according to Pensions & Investments.
With its recent investments and exits, DKCM has taken strategic positions in oil and fast-food industries while divesting from a drugstore chain. These changes reflect DKCM's adaptability and dynamic investment approach, aiming to capitalize on market trends and opportunities.
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