Ex-Blackstone Investor Bullish on This ‘Fab Five,’ Including Delphi Automotive PLC (DLPH)

Page 1 of 2

Centerbridge Partners is a +$1 billion hedge fund run by Mark Gallogly, formally with Blackstone.  Although the fund invests in a variety of sectors, more than 90% of its entire equity portfolio is concentrated on only five stocks with a total value of $1,162,448,000. Obviously, Gallogly is very confident that these five stocks are worth such a significant weighting in his portfolio.  Let’s take a look at what they are and what are the expectations for these stocks, because if investors know where to look, they can beat the market by piggybacking hedge funds.

Delphi Automotive PLC (NYSE:DLPH)

Top spot on the Centerbridge roster is Delphi Automotive PLC (NYSE:DLPH).  Centerbridge in the second largest holder of Delphi Automotive PLC (NYSE:DLPH) among the hedge funds tracked by Insider Monkey with 10.3 million shares, a third of the entire Centerbridge 13F portfolio.  Why does Gallogly like Delphi Automotive PLC (NYSE:DLPH) so much?  The vehicle parts manufacturer recently underwent an aggressive restructuring that eliminated much of its unprofitable European businesses.  Even though Delphi Automotive PLC (NYSE:DLPH) is going to have to absorb the cost of this restructuring to the tune of at least $300 million, the longer-term outlook is very bullish.  After reaching its high of $44.45, the stock has come under profit taking pressure, but has yet to breach $44 resistance.

At number two is CIT Group Inc. (NYSE:CIT) and with 8.8 million shares, Centerbridge is the largest holder of CIT Group Inc. (NYSE:CIT) among hedge funds.  Since 4Q 2010, Centerbridge has increased its position in CIT Group Inc. (NYSE:CIT) by 76%.  There are lingering rumors that CIT Group Inc. (NYSE:CIT) will be bought by either Wells Fargo & Co. (NYSE:WFC) or Canada’s Toronto-Dominion Bank (USA) (NYSE:TD). And although the company reported very disappointing earnings for 4Q with net income falling to -$592 million from $14.8 million in 2011, investors are counting on a continued recovery in commercial real estate to bolster banking stocks.  In addition, CIT Group Inc. (NYSE:CIT) has reported an increase in deposits from 2011, which positions the bank for increased loan activity.

Third of the top five is BankUnited (NYSE:BKU), currently 20.5% of the Centerbridge portfolio according to the 4Q 13F.  Analysts point to the recent bout of insider selling as the reason they shifted their average recommendation from a buy to a hold, and after the sell-off from March 5th, BankUnited (NYSE:BKU) is now underperforming both the Dow and the S&P 500. However, like CIT Group Inc. (NYSE:CIT), the stock could benefit from the overall strength in the banking sector.

Coming at number four is Visteon Corp (NYSE:VC), a climate, electronics, and automotive component supplier with a $2.92 billion market cap.  Although revenue was down 9% for 2012 compared to 2011, the percentage of sales dedicated to COGS remained mostly unchanged at 91%.  Net income also improved 25%.  As a result, the stock did not experience any serious selling pressure and even rose to a seven-month high of $60.04.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

7 Free Ways to Advertise Your Business Online

The 18 Best R&B Songs of the 90’s

The 10 Most Dangerous States to be a Cop

Subscribe

Enter your email:

Delivered by FeedBurner

X

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!