GRT Capital Partners is a Boston-based hedge fund founded by Gregory Fraser, Rudolph Kluiber and Timothy Krochuk. The hedge fund has an equity portfolio valued at $480.54 million as of September 30, up from $402.34 million three months earlier. The boost was no doubt helped by GRT’s stock picks returning 10.67% in the third quarter based on its 151 long positions in companies with a market cap of $1 billion or more.
Hedge funds on average logged sterling returns for eight consecutive months through October, despite the negative sentiment surrounding the smart money amid concerns about shrinking returns and high fees. The third-quarter was a particularly strong one for the industry, as evidenced by our own data. 659 funds in our system which filed for the June 30 13F reporting period held long positions in at least 5 non-micro-cap stocks, and those funds’ long bets posted 8.3% gains in the third-quarter based on the size of their positions on June 30. That easily bested the performance of S&P 500 ETFs, which returned only 3.3% for the period. Where hedge funds tend to falter is on the other positions in their portfolios (options plays, bonds, etc.), which are there to limit downside risk, but also limit upside potential. That’s why we recommend investors consider hedge funds’ top long bets and share them with readers throughout the year. In this article, we’ll analyze the top picks and performance of GRT Capital Partners, including Clayton Williams Energy, Inc. (NASDAQ:CWEI), Callon Petroleum Company (NYSE:CPE), Gulfport Energy Corporation (NASDAQ:GPOR), and Cimarex Energy Co (NYSE:XEC).
GRT Capital Partners decreased its holding in Clayton Williams Energy, Inc. (NASDAQ:CWEI) by 17% in the third quarter, concluding the period with a total of 651,651 shares of the company, valued at over $55.67 million. The stock returned 211.1% during the third quarter, so it’s unsurprising that the fund trimmed its stake. At the end of the second quarter, it was one of 10 hedge funds tracked by Insider Monkey that were bullish on this stock, down by 2 from the first quarter of 2016. Millennium Management, Fir Tree, Encompass Capital Advisors, and D E Shaw were also bullish on Clayton Williams Energy, Inc. (NASDAQ:CWEI).
GRT Capital Partners sold 10% of its stake in Callon Petroleum Company (NYSE:CPE) in the three-month period ended September 30. The latest SEC filings show that GRT had over 1.54 million shares of the company at the end of the third quarter, valued at $24.15 million. Callon’s shares returned 39.8% in the third quarter, proving to be another big winner for the fund.
Heading into the third quarter of 2016, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 21% from the first quarter of 2016. Of the funds tracked by Insider Monkey, John Labanowski’s Brenham Capital Management has the number one position in Callon Petroleum Company (NYSE:CPE), worth close to $71.9 million, corresponding to 9.2% of its total 13F portfolio. Sitting at the No. 2 spot is Discovery Capital Management, managed by Rob Citrone, which holds a $59.9 million position. Some other professional money managers with similar optimism consist of Steve Cohen’s Point72 Asset Management, Stuart J. Zimmer’s Zimmer Partners.
We’ll check out two more of the fund’s stock picks on the next page.