SkyBridge Capital was founded in 2005 by Anthony Scaramucci, who currently runs the fund together with Raymond Nolte. Hedge fund seeding plays a major part in SkyBridge Capital’s business, as it boasts investments alongside billionaire John Paulson, Nelson Peltz’s Trian Partners, and Dan Leob’s Third Point. As of June 30, the fund has roughly $12.1 billion in assets under management, with only $378 million of that invested in public equities. Consumer discretionary stocks accounted for approximately 39% of its public equity portfolio’s value at the end of June, while technology stocks were second at 20%. Those figures stood at just 24% and 14% respectively on March 31, as SkyBridge’s portfolio became much less diversified over the course of the quarter.
Given that Messrs. Scaramucci and Nolte made some major investments in consumer stocks heading into the summer, in this article we’ll take a look at its largest positions from that sector on June 30.
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Bullish Call On Best Buy Paying Off
During the second quarter, Anthony Scaramucci and his team initiated a position in Best Buy Co Inc (NYSE:BBY), having purchased 419,146 shares worth $12.8 million at the end of June. In general, hedge fund sentiment towards Best Buy Co Inc (NYSE:BBY) improved slightly in the second quarter, with the number of long positions held by funds that we track inching up to 29 by the end of the quarter from 28 at the start of it. Best Buy recently released its fiscal year 2017 second quarter results, which caught investors by surprise (though not SkyBridge it would seem). Earnings per share jumped by 24% year-over-year to $0.57 on the back of $8.53 billion in sales. The big news, however, was the 23.7% increase in online sales, as the company is trying to capitalize on the shift towards online business. Best Buy Co Inc (NYSE:BBY) has been investing heavily in its website and mobile app in a bid to improve the consumer experience, speed up the checkout process, and offer attractive delivery options. Investors were also pleased to see a $38 million reduction in costs as Best Buy continues to close physical stores. Shares have gained 25% in the third quarter, making the addition a strong one for SkyBridge. Jim Simons‘ Renaissance Technologies reduced its Best Buy stake by 38% to 1.46 million shares during the second quarter.
SkyBridge Sees Great Potential In Coach Inc
Coach Inc (NYSE:COH), the designer of luxury accessories, was also on SkyBridge Capital’s shopping list. According to its latest 13F filing, the fund held 323,853 shares of the company, up by 48% from a quarter earlier, with the position being valued at $13.2 million. So far this year, Coach Inc (NYSE:COH) has been trading mostly in green territory, having advanced by 18% through last Friday’s close. For its most recent quarter, the company posted a 15% increase in net sales to $1.15 billion and adjusted earnings of $0.45 per share, topping analysts’ projections of $0.41 per share.
“Our strong fourth-quarter results — in which we achieved positive North America comparable-store sales and drove increases across key financial metrics — capped a year where we returned the Coach brand to growth. At the same time, we elevated brand perception globally,” commented Victor Luis, CEO of Coach.
At the end of June, 36 of the funds tracked by Insider Monkey held a stake in Coach Inc (NYSE:COH), down from 37 a quarter before. Dmitry Balyasny is also bullish on this stock, having nearly doubled his fund’s holding during the quarter to 2.19 million shares worth $89.4 million.
We’ll check out SkyBridge Capital’s three favorite consumer stocks on the next page.