Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Forestar Group Inc., American Capital Ltd., Axalta Coating Systems Ltd: Gratia Capital’s Top Picks

Page 1 of 2

Steve Pei’s Gratia Capital has revealed their top picks to close out 2014, and they include a couple of old favorites and an IPO which has taken off since its fourth quarter launch. Gratia’s new top pick is Forestar Group Inc. (NYSE:FOR), with ownership of 864,541 shares, representing 7.15% of the value of their equity portfolio as of December 31. American Capital Ltd. (NASDAQ:ACAS) remains their second best bet, mostly unchanged from the last quarter at 793,239 shares. Their new third choice is Axalta Coating Systems Ltd (NYSE:AXTA), which they’ve taken a strong interest in since that company’s November IPO, scooping up 440,799 of their shares.

Gratia Capital

A former Vice President at Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors, Steve Pei started Gratia Capital in 2012, after landing a $25 million seed deal from Geoffrey Raynor’s Q Investments. The Los Angeles-based fund is a multistrategy, value/event-driven hedge fund, which seeks to capitalize on opportunistic investing in its three focal sectors: consumer, industrial, and real estate. Pei, also a former associate at Bain Capital, graduated from the University of Pennsylvania in 2000. Gratia Capital has assets under management of $500 million, and an equity portfolio valued at $186 million at the end of 2014. 

Previously the fifth most valuable holding in their portfolio, Gratia Capital added another 355,410 shares of Forestar Group Inc. (NYSE:FOR) during the fourth quarter, becoming one of that company’s largest shareholders among funds we track in the process. That title still belongs to Jeffrey Bronchick’s Cove Street Capital, which successfully shook up the Forestar board this week as part of an investor group that included Andrew Wallach and Jason Ader‘s SpringOwl Associates. SpringOwl’s President Daniel B. Silvers will take a seat on Forestar’s board.

The mounting activist pressure on Forestar Group Inc. (NYSE:FOR) was the result of underperformance relative to its peers, and poor corporate governance. Shares slid 26.53% in 2014, and have failed to mount a comeback thus far in 2015, sliding another 9.94%. Forestar has taken the first steps to try and correct some of their excessive expenditures, especially in the oil and gas sectors, by announcing at the end of January that they would close their North Texas oil and gas operations office in Fort Worth. Shares are up 4.52% since that announcement, signalling that investors are pleased in the direction of the company.

In addition to Cove Street’s large holding of 2.13 million shares in Forestar Group Inc. (NYSE:FOR), Q Investments and Martin Whitman’s Third Avenue Management were other large shareholders among our tracked funds, with 555,122 and 472,831 shares respectively, as of September 30.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!