William C. Martin‘s Raging Capital Management has disclosed further increasing its stake in A. M. Castle & Co (NYSE:CAS) in a recent 13D filing with the Securities and Exchange Comission. The fund now owns 4.63 million shares versus the 3.37 million shares that it previously held, according to another 13D filing in January. Raging Capital’s current holding in the specialty metals and plastics distribution company represents 19.7% of the company’s outstanding common stock.
William C. Martin has had considerable entrepreneurial success even before he founded his hedge fund, Raging Capital Management (stock picks, investor letters) in 2006. He co-founded one of the first financial websites, ragingbull.com in 1997 when he was just 19 years old. The project was later sold for $160 million. Although having an annualized return of 25%, Raging Capital experienced limited success in 2014. According to the fund’s Q4 Investor letter, the fund returned 2.8% in its Series A Master Fund and 3.4% in Series B Master Fund. Most of these returns came from shorting stocks, as the short book gained 10.6% gross after borrow costs.
Raging Capital initiated a position in A. M. Castle & Co (NYSE:CAS) during the fourth quarter by purchasing some 3.37 million shares valued at $26.95 million. The position comprised 2.83% of the fund’s portfolio value. In a recent newly amended filing Joe Huber’s Huber Capital management also has revealed increasing its stake in A.M. Castle & Co to 2.57 million shares from 1.9 million shares. Huber Capital owns 10.9% of the company’s outstanding common stock.
A. M. Castle & Co (NYSE:CAS) is down nearly 75.5% over the last year. The company, which is undergoing massive restructuring experienced a substantial goodwill write off in the second quarter, and faced disappointing results for third and fourth quarters. Fourth quarter net loss per share of $1.64 was off the estimates by $1.21. However, the revenues of $231.47 million beat the estimates by $2.87 million.
Moving on to Raging Capital’s second largest holding, Vitesse Semiconductor (NASDAQ:VTSS), which formed 5.68% of the funds portfolio value. Valued at $54.13 million and comprising of 14.32 million shares, the position remained unchanged during the fourth quarter. Richard Mashaal of Rima Senvest Management and Millennium Management’s Israel Englander owned 5.13 million shares valued at $19.40 million, and 1.56 million shares valued at $5.91 million respectively.
Vitesse Semiconductor (NASDAQ:VTSS) is up nearly 9% year to date amid second quarter financial results that missed estimates. The company’s net loss per share came in at $0.07 against the estimate of $0.04.
Martin added some 354,216 shares of Ply Gem Holdings Inc (NYSE:PGEM) to Raging Capital’s portfolio. The total stake in the manufacturer of residential exterior building products consisted of 3.59 million shares valued at $50.20 million at the end of 2014. Out of 737 hedge funds that we track at Insider Monkey, 14 held long positions in the company versus 12 funds a quarter earlier. Among these were Chuck Royce’s Royce & Associates holding 1.03 million shares valued at $14.35 million and Ken Griffin’s Citadel Investment Group with 465,749 shares valued at $6.5 million.
The $917.88 million company is down nearly 2.3% year to date. As for the third quarter financial results, Ply Gem Holdings Inc (NYSE:PGEM)’s Earnings per Share (EPS) of $0.32 beat estimates by a penny, but revenues of $437.8 million came in $6.9 million smaller than expected.
Taro Pharmaceutical Industries Ltd. (NYSE:TARO)‘s contribution in Raging Capital’s portfolio increased from 3.04% to 4.91% during the fourth quarter as 139,154 additional shares were purchased. The position contained 315,858 shares valued at $46.81 million. Other hedge fund managers who were also bullish on the Israel-based pharmaceutical company included Israel Englander, who increased his fund’s stake by 196% taking it to 151,077 shares valued at $22.83 million, and Paul Marshall and Ian Wace of Marshall Wace LLP, whose fund after a 193% bump in Taro Pharmaceutical Industries Ltd. (NYSE:TARO)’s stake owned 97,017 shares valued at $14.38 million.
The $6.44 billion company is trading at a forward earnings multiple of 11.91. The stock is up about 2.2% year to date. An EPS of $3.33, which was 28.6% higher from the same quarter last year and revenues of $237.7 million, up by 11.3% on the year were the main highlights of Taro Pharmaceutical Industries Ltd. (NYSE:TARO)’s third quarter financial results.
Disclosure: none
