John Zaro‘s Bourgeon Capital Management is a long/short hedge fund with an equity portfolio of over $158.7 million, according to its latest 13F filing. While the fund invests in several industries, the largest portion of its equity portfolio is concentrated in the Basic Materials sector (over 20%), followed by Technology (19%) and Services (15%). In this piece we will take a closer look at the top five equity positions in terms of value held by Bourgeon Capital.
On the first place is Casella Waste Systems Inc. (NASDAQ:CWST), with Bourgeon reporting a $6.25 million position, which comprises 1.22 million shares, up by 183,500 shares over the quarter. The stock of the company declined by 14% on the year and sports a Beta of 1.13. The company has been consistently missing the estimates and posting losses. In 2013, the company’s net losses amounted to $1.29 per share, narrowing it from $1.35 a year earlier. For the current year, the company is expected to further decrease its losses to $0.42. Joel Ramin‘s 12 West Capital Management is another large shareholder of Cassella Waste Systems, which held 3.69 million shares at the end of 2013.
In Autodesk, Inc. (NASDAQ:ADSK), the fund revealed holding 99,400 shares, worth $4.89 million. The company is engaged in design software and services. Its stock trails a P/E of around 47.60, well above the industry average of approximately 22. For the current year, the company is expected to deliver EPS of $1.15, lower than $1.68 reported for the last year. At the same time, the company sports a Price/Earnings-to-Growth of close to 4.00.
Mr. Zaro has also been bullish on JPMorgan Chase & Co. (NYSE:JPM), a company where he previously worked as an alpha target manager. His fund holds around 79,800 shares of JPMorgan, with an aggregate value of $4.85 million. For the first quarter of 2014, the company posted an EPS of $1.28, missing the estimates for the first time over the past several quarters. JPMorgan has also recently raised its dividend to $0.40 per share, from $0.38. For the next year, the company plans to buy back $6.5 billion of its common stock. Harris Associates, owned by Natixis Global Asset Management, holds a significant stake in JPMorgan, which contains 27.3 million shares, according to its latest 13F.
On the next place is Guidance Software, Inc. (NASDAQ:GUID), Bourgeon disclosing a $4.76 million position, with 430,600 shares. Aside from Bourgeon Capital, Robert G. Moses‘ Rgm Capital is also bullish on the company, holding some 4.06 million shares as of the end of 2013. Meanwhile, the stock of Guidance has lost almost 10% since the beginning of the year and trades at a forward P/E of almost 58.
The fifth-largest holding is represented by Johnson Controls Inc (NYSE:JCI), of which Mr. Zaro’s fund owns 96,400 shares, worth $4.56 million. Johnson Controls is a $30 billion company engaged in production, installation and service of temperature regulation systems for buildings. Recently the company announced that it will acquire Air Distribution Technologies from the Canada Pension Plan Investment Board, in a deal that amounts to $1.6 billion. Johnson Controls Inc (NYSE:JCI) is expected to report net profits of $3.15 for the current year, which is higher from $2.66 the company reported for 2013.