Should you be bullish on Stewart Information Services Corp (NYSE:STC), Marvell Technology Group Ltd. (NASDAQ:MRVL), L-3 Communications Holdings, Inc. (NYSE:LLL), and Zayo Group Holdings Inc (NYSE:ZAYO)? According to our research, an investor can beat the market by investing in the top picks of big hedge funds. We follow around 750 funds, among which is Manoneet Singh‘s Kavi Asset Management, which had all four of those companies among its top consumer picks. Therefore, we decided to examine these stocks, see how they performed in the third quarter, and what the general smart money sentiment towards them was.
Kavi Asset Management is a New York-based hedge fund run by Manoneet Singh. Kavi’s equity portfolio’s worth shrunk to $116.13 million as of the end of the third quarter, compared to $124.61 million a quarter earlier. Nonetheless, the fund’s picks returned an impressive 12.79% in the third quarter when looking at its 20 long positions in companies which had a market value of $1 billion or more on June 30. Our research has shown that paying attention to the long sides of hedge funds’ portfolio helps pinpoint smart investments. For example, of 660 funds tracked by Insider Monkey which had at least 5 long positions in $1 billion companies on June 30, 627 of them delivered positive gains in the third quarter from those positions. With that in mind, let’s analyze Kavi Asset Management’s portfolio and see how some of its top stock picks performed.
Kavi Asset Management added Stewart Information Services Corp (NYSE:STC) as a new position in its portfolio in the second quarter, buying 220,000 shares of the title insurer. In the third quarter, the fund bought another 326,000 shares of Stewart, increasing its holding in the company by 48% to a stake valued at $14.49 million. The decision to go long Stewart Information was fruitful, as the stock returned 8.1% in the third quarter.
Heading into the third quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 26% fall off from the first quarter of 2016. The largest stake in Stewart Information Services Corp (NYSE:STC) was held by Foundation Asset Management, which reported holding $54.3 million worth of stock as of the end of June. It was followed by Bulldog Investors with a $46.8 million position. Other investors bullish on the company included Basswood Capital, Renaissance Technologies, and Three Corner Global Investors.
Marvell Technology Group Ltd. (NASDAQ:MRVL) shares were being unloaded by Kavi in the third quarter, as the fund slashed 40% of its holding in the company during the period, ending the September quarter with 476,600 Marvell shares. The aggregate value of this stake was $6.32 million. Marvell was another new addition to Kavi Asset Management’s portfolio in the second quarter, as the fund acquired 804,200 shares of the company, having a total worth of about $7.66 million on June 30. The stock returned 39.9% during the third quarter, so the fund was doubtless taking profit from its wise investment by selling shares.
At Q2’s end, a total of 38 of the hedge funds that we follow held long positions in this stock, up by 23% from the previous quarter. When looking at the institutional investors followed by Insider Monkey, Starboard Value LP, managed by Jeffrey Smith, holds the largest position in Marvell Technology Group Ltd. (NASDAQ:MRVL). Other peers that hold long positions contain Curtis Macnguyen’s Ivory Capital (Investment Mgmt), D E Shaw, and Richard Barrera’s Roystone Capital Partners.
We’ll check out two more of the fund’s stock picks on the next page.