Soroban Capital Partners was founded by Eric W. Mandelblatt in 2010 as an activist investors focusing on equity and debt markets. Mandelblatt and Soroban have made headlines this year after they teamed up with activist Keith Meister’s Corvex Capital to oust Williams Companies Inc (NYSE:WMB) CEO Alan Armstrong and push for a sale of the company. Having failed both quests, Mandelblatt resigned from the company’s board, but has not liquidated Soroban’s stake in the company. Looking forward, Mandelblatt and his team have made a number of bets on telecommunications stocks, which accounted for 21% of Soroban’s equity portfolio at the end of the second quarter. The fund’s equity portfolio carried an estimated value of $16.2 billion. According to a regulatory filing, Soroban has recently launched a new fund, Soroban Special Investment Fund LLC, managing to raise $50.8 million in funding.
While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Bullish Bet On SBA Communications
Number 5 on our list is SBA Communications Corporation (NASDAQ:SBAC). During the second quarter, Soroban Capital has amassed 2.05 million shares worth $221 million at the end of June. Thomas Steyer‘s Farallon Capital also holds a sizable position, having trimmed it by 1% to 2.95 million shares valued at $318 million. In general, hedge fund interest in SBA Communications Corporation (NASDAQ:SBAC) cooled down a bit during the second quarter, as the number of funds from our database invested invested in the stock dropped to 40 at the end of June, from 42 at the end of March. SBA shares are currently trading at around $113.85 apiece, up by 8.8% year-to-date. For the second quarter, SBA Communications Corporation (NASDAQ:SBAC) posted a profit of $32.7 million or $0.10 per share when adjusted for one-time gains. The result was below analysts’ consensus of $0.13 per share. Revenues came in at $381.8 million, also falling short of analysts’ projections of $405 million.
Everybody Like Union Pacific
Next up is Union Pacific Corporation (NYSE:UNP), a railroad operator. According to its latest 13F filing, Soroban held 4.48 million shares valued at approximately $391 million. Dmitry Balyasny is also bullish on this stock, having established a new position for his fund, Balyasny Asset Management, which held 2.09 million shares at the end of June. Union Pacific Corporation (NYSE:UNP) is among the 100 most popular stocks among the hedge funds followed by Insider Monkey. At the end of the quarter, 55 funds were invested in the stock, up from 54 registered a quarter earlier. Union Pacific Corporation (NYSE:UNP) has a market cap of $79.7 billion and pays an annual dividend of $2.20 per share, providing investors with a 2.29% yield. The stock is trading at a trailing Price to Earnings (P/E) ratio of 18, slightly higher than the industry average of 16.5. Analysts at JPMorgan Chase & Co. have recently reiterated their ‘Hold’ rating with a price target of $94 per share, while Morgan Stanley rates the stock as a ‘Buy’ and sees the price rising to $100 per share.
Turn the page to read about the three largest new positions reported by Soroban at the end of the quarter.