Himanshu H. Shah‘s Shah Capital is one of more than 749 hedge funds in our database that filed a 13F for the June 30 reporting period. Of those funds, Shah Capital’s long positions in companies worth $1 billion or more performed better than all but six other funds, with the ten qualifying holdings delivering weighted average returns of 29.6% for the period. That performance pushed Shah Capital’s year-to-date gains using the same methodology to 41.4%, which also ranks it among the very best performing funds in our database in 2016. It should be noted that our calculations may be different from the fund’s actual returns, as it does not factor in changes to positions during the quarter, or positions that don’t get reported on Form 13Fs, like short positions.
Shah Capital recently released its 13F filing for the September 30 period, so let’s run through four of the fund’s top stock picks and see how it traded them during the third quarter, as well as how they performed.
Let’s start with Genworth Financial Inc (NYSE:GNW), Shah Capital’s second-most valuable holding on September, up from its third-most valuable on June 30. Shah Capital owned 3.54 million shares of the mortgage insurance services company on June 30, and those shares had a monster quarter, nearly doubling in value. Despite that, Shah Capital didn’t take much profit from the position, selling just 31,000 shares during the third quarter.
Hedge fund ownership of Genworth Financial Inc (NYSE:GNW) has drifted down over the past year. Heading into the third quarter of 2016, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in the stock. Solus Alternative Asset Management, managed by Christopher Pucillo, had a $38.7 million position in the stock on June 30, comprising 8.6% of its 13F portfolio. The second-largest stake was held by Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $19.5 million position. Some other members of the smart money with similar optimism include Richard S. Pzena’s Pzena Investment Management and Jim Simons’ Renaissance Technologies.
Next up is Coeur d’Alene Mines Corporation (NYSE:CDE), which flipped places with Genworth in Shah Capital’s portfolio in terms of value, dropping to third on September 30 from second on June 30, after Shah Capital trimmed its stake in the company by 20% during the third quarter, lowering its position to 1.80 million shares. It appears that Shah Capital did want to take some profit from this position, which only gained about 10% during the third quarter but has soared by over 350% this year.
Some of the other fortunate shareholders of Coeur d’Alene Mines Corporation (NYSE:CDE) as of June 30 among the funds in our system were GMT Capital, managed by Thomas E. Claugus ($69.7 million position) and Renaissance Technologies, managed by Jim Simons ($54.1 million position). Some other hedge funds and institutional investors that were bullish on Coeur d’Alene Mines Corporation (NYSE:CDE) comprised Eric Sprott’s Sprott Asset Management and Gilchrist Berg’s Water Street Capital.
We’ll check out two more favorite stocks of Shah Capital on the next page.