5 High-Potential Picks From Force Capital: Sears Hometown and Outlet Stores Inc (SHOS), iStar Financial Inc. (SFI)

Page 1 of 2

In the world of hedge funds there are thousands of money managers. Many members of the financial press speciously shrug off this group, but a select group of hedgies is actually worth retail investors’ time. At Insider Monkey, we’ve found that by focusing on the best stock picks of the best hedge fund managers, it is possible to beat the market by a significant margin.

Our small-cap strategy outpaced the market by 18% a year for more than a decade, and since we began sharing this with the public last fall, our picks have beaten the S&P 500 index by 22.5 percentage points in only 5.5 months (learn how you can capitalize on these dominant strategies here).

With that in mind, it’s also important to do a fund-by-fund analysis of hedgies’ favorite stock picks, and the latest round of fourth quarter 13F filings from the SEC lets us do just that. Let’s take a look at Robert Jaffe’s Force Capital, which is a U.S.-centric long/short equity fund that specializes in deep fundamental research, predominantly on middle-market companies in financial, consumer and industrial sectors (here’s Jaffe’s full equity portfolio).

Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS)

Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) is Jaffe’s No. 1 stock pick and was a new position for the hedge fund manager last quarter. Since spinning off from Sears Holdings in mid-October, shares of the appliance and hardware-focused retailer have returned nearly 50%. In the typical spin-off fashion, Sears Hometown and Outlet was undervalued from launch, and despite their rapid appreciation, they still trade at a 13% discount to their industry’s average book valuation. While there’s nothing here for income-seeking investors, the multiples are splendid, as are Jaffe’s company in SHOS. At the end of Q4, Murray Stahl, Steven Cohen and Chuck Royce were also long.

First Industrial Realty Trust, Inc. (NYSE:FR) and iStar Financial Inc. (NYSE:SFI) sit at the No.’s 2 and 3 spots in Jaffe and Force’s equity portfolio, and interestingly, the hedgie was downsizing his stake in both REITs by about 20% last quarter. While it’s impossible to know just what merited this selling—it could have simply been profit taking—it’s worth pointing out that each company has had a significant 2013. Since the start of the year, First Industrial has gained 13.5% while iStar is up 23.9%, and both trade relatively cheaply at the moment.

Just how cheap?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!