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Hawaiian Holdings, Inc. (HA): Hirzel Capital Inches Down Long-Term Position With Great Returns

Zac Hirzel‘s Hirzel Capital Management has reported slightly reducing its position in Hawaiian Holdings, Inc. (NASDAQ:HA). A new filing with the Securities and Exchange Commission showed that Hirzel sold around 365,100 shares of the company at an average price of $18.46 per unit. Following the sale, Hirzel Capital owns around 5.3 million shares, including some 4,500 shares held directly by Mr. Hirzel, who serves on Hawaiian Holdings’ board of directors.

Hawaiian Holdings, Inc. (NASDAQ:HA)

Hirzel Capital Management is a Texas-based hedge fund with a mid-sized equity portfolio, worth approxiamately $946.9 million as at the end of June. Hawaiian Holdings represents the largest position in terms of value, amassing around 8% of the total portfolio value. The fund was on the radars around a year ago when it went activist on Aeropostale Inc (NYSE:ARO). Hirzel added the company to its equity portfolio in November 2013 and several weeks later it went activist and stated its intention to discuss the company’s underperformance with the board of directors. However, during the second quarter, Hirzel closed its position in Aeropostale, which previously contained 4.73 million shares, representing 6% of the company. Aeropostale’s stock slid by over 60% over the last 52 weeks.

Hirzel Capital’s position in Hawaiian Holdings, Inc. (NASDAQ:HA) amasses around 9.8% of the company. The investor initiated a stake in the company during the first quarter of 2013, initially holding approximately 2.51 million shares. The stock gained approximately 200% since then. In May 2013, Hirzel sent a letter to Hawaiian Holdings’ board and expressed his intention to join the board, outlining his skills and motivation. Later in October, Hirzel Capital boosted its stake to over 5.60 million shares, representing 10.8% of the company and Mr. Hirzel once again expressed his intention to be appointed to the board of directors. In December, his request was accepted by the board and Mr. Hirzel was appointed as the 12th board member for Hawaiian Holdings, Inc. (NASDAQ:HA), the parent company of Hawaiian Airlines.

Hawaiian Holdings, Inc. (NASDAQ:HA)’s primary asset, Hawaiian Airlines is one of the largest domestic airlines, which has consistently ranked as one of the best in terms of on-time departures and arrivals in the US. The company has also been investing in its fleet size over the last couple of years and earlier this year, it announced that it has entered into a Memorandum of Understanding with Airbus Group, under the terms of which, the airline will acquire six new A330-800neo aircrafts starting with 2019 and has rights to buy six additional aircrafts.

Aside from Hirzel Capital, some other funds among those that we track, are also among Hawaiian Holdings, Inc. (NASDAQ:HA)’ shareholders. Donald Chiboucis’ Columbus Circle Investors has been cutting its stake over the last several quarters and in its latest 13F filing, reported ownership of around 903,300 shares, held as of the end of September, down by 37% on the quarter. In addition, during the second quarter, Jim Simons’ Renaissance Technologies picked up its stake by 20% to 930,700 shares, held as of the end of June.

All in all, Hawaiian Holdings, Inc. (NASDAQ:HA) is a stock that has appreciated significantly over the last year and significantly impacted the fund’s returns since it is the largest holding in terms of value. Assured Guaranty Ltd. (NYSE:AGO), the second-largest position in the fund’s equity portfolio has also had positive returns over the last year, as well as the next holding, Dana Holding Corporation (NYSE:DAN). In this way, Hirzel Capital generates good returns by investing mainly in the Services sector and tracking its moves can provide some interesting long-term opportunities even for smaller investors.

Disclosure: none

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