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Billionaire Julian Robertson’s Top Small-Cap Picks Include SeaWorld Entertainment Inc (SEAS), FNFV Group (FNFV)

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One of the early movers and success stories of the hedge fund industry was Julian Robertson and he continues to get attention from investors and the media despite no longer managing money for clients. Robertson instead runs his family office Tiger Management, whose public equity portfolio has market value of $596.87 million as per the reporting period of its latest 13F filing with the SEC, March 31. While, Inc. (NASDAQ:AMZN), Alibaba Group Holding Ltd (NYSE:BABA) and Apple Inc. (NASDAQ:AAPL) are the leading investments of the hedge fund legend, he also holds investments in several small-cap companies, which we are going to focus on in this article, with the top small-cap picks of Robertson being SeaWorld Entertainment Inc (NYSE:SEAS), FNFV Group (NYSE:FNFV), NorthStar Asset Management Group Inc (NYSE:NSAM), and Equity Commonwealth (NYSE:EQC).

Julian Robertson

Professional investors like Robertson, spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the best small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. A portfolio of the 15 most popular small-cap stocks among funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012 in backtesting. The exceptional results of this strategy got even better in forward testing after the strategy went live at the end of August 2012. A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 144% and beaten the market by more than 84 percentage points since then, and by 4.6 percentage points in the first quarter of this year (see the details).

SeaWorld Entertainment Inc (NYSE:SEAS) is the top small-cap stockholding of Robertson, who owns 538,382 shares valued at $10.38 million. The entertainment company has a market cap of $1.93 billion and it offers quarterly dividend payments of $0.21, providing a strong yield of 3.91%, despite shares of SeaWorld Entertainment Inc (NYSE:SEAS) also having grown by 21.75% year-to-date. SeaWorld announced that Marc G. Swanson would take over as the new interim Chief Financial Officer of the company after his predecessor James M. Heaney announced his departure to accept a senior position with another company. Swanson has worked as the Chief Accountant Officer for SeaWorld Entertainment Inc (NYSE:SEAS) since 2012 and will take charge on June 1, 2015. Jonathon Jacobson‘s Highfields Capital Management is one of the largest investors of the entertainment company, along with the similarly-named fund Highland Capital Management.

FNFV Group (NYSE:FNFV) comes in at number two on the list of top small-cap stocks of Tiger Management, with the family office holding 488,208 shares valued at $6.88 million. The insurance company has a market cap of $1.20 billion and its shares have declined 1.9% during 2015. Fidelity National Financial Ventures is one of the two business groups of Fidelity National Financial, with the other being Fidelity National Financial Inc (NYSE:FNF). The former was created as a tracking stock, to showcase the value of Fidelity`s portfolio companies, and has gained over 38% since its IPO 11 months ago. Keith Meister‘s Corvex Capital and Daniel Och’s OZ Management maintain significant positions in FNFV Group (NYSE:FNFV).

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