James Dinan Discusses American Airlines Group Inc (AAL), The Men’s Wearhouse, Inc. (MW) & Hertz Global Holdings, Inc. (HTZ)

York Capital Management is a hedge fund with over $20 billion in assets under management. Employing the event-driven strategy, the fund managed to return around 14% since its foundation in 1991, versus the S&P 500 gain of 9%. On Thursday, the manager and founder of York Capital, James Dinan, came to CNBC‘s Squawk Box to discuss his three of its largest bets and share his three rules for investing.

YORK CAPITAL MANAGEMENT

Earlier, we discussed the top five largest holdings from York’s most recent 13F filing. The most valuable long position has been reported in General Motors Company (NYSE:GM), followed by W.R. Grace & Co (NYSE:GRA), Hertz Global Holdings Inc (NYSE:HTZ). However, the 13F portfolio represents only a part of the fund’s investments, that’s why it is important to see which picks are in fact, Mr. Dinan’s most favorite.

American Airlines

American Airlines Group Inc (NASDAQ:AAL) is James Dinan’s favorite stock, which he also discussed before Christmas last year. In its latest 13F, York Capital reported adding the company to its equity portfolio, the stake amassing over 8.0 million. American Airlines has been bought by U.S. Airways, the merger creating the largest airline in the world. York is clearly bullish on the stock, which already managed to gain over 50% since the beginning of the year. As Dinan says, American Airlines Group Inc (NASDAQ:AAL) is a “$60 plus potential stock.”

On the back of the merger, many investors placed their bets on the newly formed airline. For example, Paulson & Co, led by John Paulson also has initiated a stake in American Airlines Group Inc (NASDAQ:AAL), reporting 8.5 million shares of the company, in its latest 13F.

The Men’s Wearhouse

The Men’s Wearhouse, Inc. (NYSE:MW) was another stock mentioned by Dinan, during his intervention on CNBC. The company is currently on the radars amid its attempts to buy Jos. A. Bank Clothiers Inc. (NASDAQ:JOSB), a deal which The Men’s Wearhouse, Inc. (NYSE:MW) has been pursuing since November, and recently increased its bid to $1.8 billion, from the initial $1.5 billion. One of the main interesting points in this “hostile” takeover is the cost savings, which might result from it, Dinan said.

“The remarkable thing here is the amount of cost-savings that could potentially come from this transaction: $100 million to $150 million are the so-called synergies from this merger”

Overall, Dinan considers that The Men’s Wearhouse, Inc. (NYSE:MW) is still a buy at $55, and it can advance by around $6-$7 over the next couple of years, which together with a multiple, makes MW a “$75-$90 type stock.”

In the latest round of 13F filings, York Capital reported ownership of around 880,700 shares of MW. Kenneth Mario Garschina‘s Mason Capital Management, is another investor that recently went bullish on MW and disclosed a 6.4% position in the company. Ricky Sandler’s Eminence Capital also pursues the merger of The Men’s Wearhouse, Inc. (NYSE:MW) and JOSB, being a shareholder of both companies.

Hertz

Dinan is also bullish on Hertz Global Holdings, Inc. (NYSE:HTZ), in which it owns over 12 million shares, according to the 13F filing. The position worth $345.3 million, is the fourth largest in York’s equity portfolio. At the end of 2012, Hertz acquired Dollar Thrifty, a car rental service, in which York was the largest shareholder. Since the end of 2012, the stock of Hertz Global Holdings, Inc. (NYSE:HTZ) almost doubled. Aside from that, Dinan also considers that Hertz has a great equipment rental business, which could become a spin-off later.

The whole discussion of these three picks can be watched below:

Moreover, Mr. Dinan also presented some tips that should be applied by all investors. One of them is diversification of the portfolio, because “you never know when the dangers will hit.”

“Make your position size more a function of not how much you can make, but how much you can lose”

At the same time, the manager of York Capital advises investors to avoid leverage, and to focus on liquidity, because in this way, “you can get out when you’re wrong.”

Check out this sequence below:

Disclosure: none

Recommended Reading:

Mario Gabelli and GAMCO Up Stake in Griffon Corporation (GFF)

Broadfin Capital Initiates Stake in Pernix Therapeutics (PTX)

Samuel Isaly Says He Is Fond of Regeneron Pharmaceuticals Inc (REGN) & InterMune Inc (ITMN)

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

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!