Sotheby's, BofA, J.C. Penney attract hedge fund buyers

By Sam Forgione, Katya Wachtel and Svea Herbst-Bayliss

NEW YORK/BOSTON, Nov 14 (Reuters) - Top U.S. hedge fund managers in the third quarter zoned in on the consumer sector, with investment plays ranging from Sotheby's, a high-end auction house that caters to millionaires, to J.C. Penney Co , the struggling department store chain.

Ellington Management Group LLC, a $5.5 billion investment firm founded by Michael Vranos, took a new position in Sotheby's, as did Eric Mindich's Eton Park Capital Management.

Ellington owned 71,500 shares at the end of the third quarter while Eton Park opened an 1.94 million stake.

Daniel Loeb's Third Point, the largest shareholder in New York City-based Sotheby's with a 9.3 percent stake, has been pushing for a management shake-up.

Farallon Capital Management, a San Francisco based-hedge fund, and activist investor Jana Partners LLC opened new positions in ailing retailer J.C. Penney with 500,000 shares and 489,600 shares, respectively.

David Tepper's Appaloosa Management also picked up a stake in J.C. Penney, 737,800 shares.

Patrick McCormack's Tiger Consumer Management, meanwhile, sold out of its entire J.C. Penney exposure, dumping roughly 5.4 million shares.

The quarterly disclosures of manager stock holdings - in so-called 13F filings with the U.S. Securities and Exchange Commission - are always intriguing for investors trying to divine a pattern in what savvy traders are selling and buying.

But relying on the filings to develop an investment strategy comes with some peril, because the disclosures are backward looking and come out 45 days after the end of each quarter.

Still, the filings offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side. The filings don't disclose short positions - bets that a stock will fall in price. And there's also little disclosure on bonds and other securities that do not trade on exchanges.

Upon request, the SEC also permits managers to omit sensitive stock positions from 13F filings. As a result, the public filings don't always present a complete picture of a manager's stock holdings.

Here then are some of the hot stocks and sectors in which hedge fund managers either took new positions or exited from in the third quarter.

VIKING GLOBAL INVESTORS

Andreas Halvorsen's Viking opened a huge new stake in Bank of America Corp of 44.9 million shares. Viking also added 29.9 million shares to its stake in Micron Technology Inc , bringing its exposure to 37.3 million shares.

Viking took a new position in Facebook Inc of 4.4 million class A shares and new stake in Yahoo Inc of 9 million shares. Another new stake held by Viking is that in Lowe's Cos Inc of 17.4 million shares.