Quarterly 13F filings for the first quarter of 2016 have just started to flow in, so retail investors can start hunting down high-potential investment opportunities by examining the equity portfolios of various hedge fund vehicles. Selz Capital LLC, a New York-based investment manager founded and run by Bernard Selz, is one of the first hedge fund firms tracked by Insider Monkey to submit the 13F for the first quarter of 2016 with the U.S. Securities and Exchange Commission. The New York-based investment firm had an equity portfolio of $329.18 million on March 31, as compared to a market value of $346.02 million on December 31. Rather than analyze the fund’s top five positions at the end of the first quarter of this year, Insider Monkey decided to have a look at the most noteworthy moves made by Mr. Selz’s investment firm during the quarter. Precisely, the following article will discuss four new purchases made by Selz Capital, as well as one noteworthy sale that might be of interest for the investment community.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Lumber Liquidators Holdings Inc. (NYSE:LL)
– Number of shares held by Selz Capital LLC as of March 31: 336,000
– Value of Selz Capital’s holding as of March 31: $4.41 Million
Selz Capital LLC acquired a new stake of 336,000 shares in Lumber Liquidators Holdings Inc. (NYSE:LL) during the first quarter, which was valued at $4.41 million at the end of March. Lumber Liquidators Holdings is a specialty retailer of hardwood flooring in North America that sells a broad portfolio of exotic and domestic hardwood species, engineered hardwood, laminate, resilient vinyl, bamboo and cork. Earlier this month, the hardwood-flooring company won a tentative ruling in a Proposition 65 lawsuit in which several plaintiffs had accused the company of failing to adequately warn consumers in California that certain products emit formaldehyde, which is classified as a possible human carcinogen, in excess of state limits. Shares of Lumber Liquidators have gained 26% in the past month, but are down 52% in the past 12 months. The company’s net sales for 2015 were $978.78 million, which decreased from $1.05 billion in 2014. Allegedly, the decline in the company’s 2015 top-line figure was driven by allegations related to the product quality of its laminates sourced from China and the negative publicity surrounding those allegations. Meanwhile, Lumber Liquidators’ bottom-line figure was seriously impacted by legal and professional fees and settlement expenses related to various legal matters. The company registered a net loss of $56.4 million for 2015, as compared to net income of $63.4 million for 2014. Charles Paquelet’s Skylands Capital cut its stake in Lumber Liquidators Holdings Inc. (NYSE:LL) by 40% during the first quarter to 73,700 shares.