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Covidien plc (COV), CBS Corporation (CBS): Eton Park’s Picks Handily Beat the Market in Q1

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Eric Mindich’s Eton Park Capital enjoyed a strong first quarter of 2015 according to our returns metric. That metric estimates a fund’s quarterly returns based on the positions held at the beginning of the quarter in companies with a market cap of at least $1 billion. In Eton Park’s case, it shows the weighted average returns of the fund’s 36 qualifying long positions was a strong 5.7% during the first quarter. Let’s take a look at some of Eton Park’s notable positions and their performance during the quarter.


First up is Covidien plc (NYSE:COV), the most valuable long position in the fund’s portfolio at the beginning of the year. The position was increased by 42% in the fourth quarter, which contributed to it vaulting to the top of the list. That followed a third quarter in which the stake was upped by more than 750%, shortly after the announcement that Covidien plc (NYSE:COV) would be purchased by Medtronic for $42.9 billion. Shares of Covidien plc (NYSE:COV) appreciated by more than 20% after the initial takeover announcement stock spike, making it a profitable merger arbitrage play. The takeover was completed on January 26 and Covidien delisted from the New York Stock Exchange, with it returning a solid 4.33% in 2015 to that point. Covidien was a top merger pick of billionaire John Paulson, who was the largest shareholder at the end of 2014 among the funds in our database.

Spirit AeroSystems Holdings, Inc. (NYSE:SPR) was a major performer for Eton Park in the first quarter,bulking up its stock price by a hefty 21.31%. Despite nearly quadrupling in value over the past two-and-a-half years, Spirit AeroSystems Holdings, Inc. (NYSE:SPR) shows no signs of slowing down. The aircraft parts manufacturer has crushed earnings estimates for three straight quarters, most recently posting earnings of $0.87 for the fourth quarter of 2014, with analysts expecting just $0.76. Eton Park has not completely capitalized on the continued strong performance however, selling off chunks of its holding during each of the past three quarters. Most recently, 24% of the position was sold off in the fourth quarter, leaving it with 3.26 million shares.Matt Sirovich and Jeremy Mindich’s Scopia Capital was the 39th best performing hedge fund in our database during the past quarter with returns of 13%, thanks in part to a 22.0 million share position in Spirit AeroSystems Holdings, Inc. (NYSE:SPR) which accounted for 17.67% of its total portfolio.

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