Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Cisco Systems Inc. (CSCO), Twitter Inc (TWTR), Signet Jewelers Ltd. (SIG): Brookside Capital’s New Bets Deserve a Closer Look

Brookside Capital is a hedge fund founded by several Bain Consulting employees in the 1980s, as a mechanism to provide investors with direct profit from the management skills they had acquired at Bain. Brookside is a subsidiary of Bain Capital and invests in most sectors of the economy. However, its portfolio, worth more than $4.1 billion, has a slight focus on consumer discretionary stocks (31.6%). In this article we will take a look at the fund’s top new positions for the second quarter of 2014: Cisco Systems, Inc. (NASDAQ:CSCO), Twitter Inc (NYSE:TWTR) and Signet Jewelers Ltd. (NYSE:SIG).

Brookside’s largest new bet was placed on Cisco Systems, Inc. (NASDAQ:CSCO), which now is the fund’s second most valuable equity position. Over the second quarter of the year, this $128.4 billion market cap communications and information technology (IT) company saw the fund acquire 7.21 million shares of Common Stock, worth more than $179 million. This stake accounts for roughly 4.3% of Brookside’s equity portfolio’s total value. Much larger is Donald Yacktman’s stake. His fund, Yacktman Asset Management, holds 62.28 million shares of the company, with a market value of more than $1.54 billion.

Most Valuable Brands in 2013

During the second quarter of 2014, Cisco Systems, Inc. (NASDAQ:CSCO) acquired Tail-f Systems, a Swedish virtualization startup, for $175 million, looking to strengthen its cloud-services portfolio. This bodes well for the company’s penetration in the telecom services segment. In addition, Cisco pays out a generous dividend yield, projected above 3% going forward.

Twitter Inc (NYSE:TWTR) is another newcomer to Brookside’s equity portfolio. The fund purchased 3.6 million shares of the renowned Internet company, and now owns roughly $150 million in stock. Another major fund betting on Twitter Inc (NYSE:TWTR) is John Thaler’s JAT Capital Management which, after a 441% increase of the stake, owns 7.32 million shares of the company’s Common Stock.

As Brookside invested in Twitter Inc (NYSE:TWTR), the company experimented with several new features to continue to attract users, and prevent its growth rate from decelerating. During the second quarter, the company particularly benefited from the FIFA World Cup in Brazil, and all of the talk around it.

Signet Jewelers Ltd. (NYSE:SIG) is the third company in this list. Over the second quarter, the fund bought 1.25 million shares, worth roughly $139 million, of the $9.4 billion market cap jewelry retailer – in the U.S. and U.K. Other major hedge funds disclosed even larger stakes in Signet Jewelers Ltd. (NYSE:SIG) . Keith Meister’s Corvex Capital last disclosed ownership of 5.63 million shares, worth more than $622 million.

Several pieces of news might have motivated Brookside’s purchase. Signet Jewelers Ltd. (NYSE:SIG) completed, over the second quarter, Zale Corporation; this made it one of World’s largest jewelry retailers, with more than $6 billion in sales. In addition, the Board announced a regular quarterly cash dividend of $0.18 per Common Share.

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!