Air Transport Services Group (ATSG) Among Red Mountain Capital’s Top Picks for Q4

According to its latest 13F filing, Red Mountain owned 1.18 million shares of Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI), valued at around $66.4 million and accounted for over 16% of its equity portfolio. Although the hedge fund had increased its stake in the company by 393% last quarter, it recently reduced its exposure to the stock by 514,400 shares. As disclosed in a 13D filing, Red Mountain currently owns 665,500 shares, representing 2.9% of the company’s outstanding stock. Shares of Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI) have been on an upwards trajectory over the past year, climbing by almost 40% during the last three months of 2014, and gaining more than 8% year-to-date. The hedge fund trimmed its stake in the company the day after the stock hit its 52-week high of $66.49.

Marlin Business Services Corp. (NASDAQ:MRLN) was the third largest holding in Red Mountain’s equity portfolio, with a stake of 2.97 million shares, valued at $61.1 million. Although the hedge fund has held a position in the company for years, last quarter it drastically increased its exposure by acquiring an additional 1.7 million shares. Despite volatility, this equity has grown consistently over the past five years. In addition to gaining more than 100% during this period, the stock has delivered investors quarterly dividends, which have been rising each year. Whereas shareholders received $0.06 per share in 2011, the figure had climbed to $0.12 per share in 2014. In addition to Red Mountain Capital, Marlin Business Services Corp. (NASDAQ:MRLN) has the support of Jim Simons’ Renaissance Technologies, which owns 172,600 shares, among others. However, Mr. Mesdag’s hedge fund holds a much larger stake and is actually the largest shareholder among institutional investors betting on the New Jersey-based provider of equipment financing solutions.

Disclosure: none.