Litespeed Management Is Having A Great 2012

By tracking hedge fund holdings, and observing changes in prices of the stocks they own over time, we can approximate hedge fund performance. Recently we ran the numbers for the third quarter of 2012 and determined which funds we think were doing well at the end of September. Now, our calculations can only be made based on the positions disclosed in funds’ 13F filings. These filings report what the fund owned at the end of the quarter, so any gains or losses it took during the quarter are not included. In addition, we can only track the long positions that a fund took- we cannot include any gains from shorting a stock, which can often be quite substantial; good short selling helped make John Paulson and David Einhorn famous and billionaires.

02 Jamie Zimmerman

With that said, based on our analysis Jamie Zimmerman’s Litespeed Management is having a great year. Our estimates are that Litespeed was up about 21% in the first half of the year and another 17% during the third quarter. Read on for a quick look at its top holdings from the end of June or research more stocks the fund owned.

Litespeed’s top pick was Seagate Technology PLC (NASDAQ:STX), owning 1.5 million shares at the beginning of July. Seagate is up 69% so far this year as its revenue and earnings have roared higher; sales at the data storage device and services company were up 57% in the fourth quarter of its fiscal year (which ended in June) from a year earlier, helping power a large increase in earnings. Even after the rise in its stock price, it trades at only 4 times trailing earnings and pays a dividend yield of 4.6%, meaning it could still be considered a value stock. Billionaire David Einhorn’s Greenlight Capital increased its own stake by 60% during the second quarter.

Theravance Inc (NASDAQ:THRX) was another of Zimmerman’s favorite stocks as the fund owned 1.7 million shares according to the 13F. Theravance is a $2.3 billion market cap pharmaceutical company whose products treat conditions such as infections and respiratory diseases. As a development-stage company, it is not expected to have positive earnings this year or next year, but has still risen 16% so far in 2012. The Baupost Group, managed by Seth Klarman, owned 14.6 million shares at the end of the second quarter. We would avoid the stock as we don’t really know when it could start delivering profits.

The fund initiated a position of 2.1 million shares of Avon Products, Inc. (NYSE:AVP) between April and June; during the third quarter of the year Avon’s stock was about flat. Avon pays an impressive 5.6% dividend yield; 2012 was the first year in several years that it did not increase its dividend payments. Its business is not doing well, however: in the second quarter, earnings were down 70% from the second quarter of 2011. Sell-side analysts think it will rebound, with their expectations for earnings growth driving a forward P/E of 16, but we are skeptical.

Macquarie Infrastructure Company LLC (NYSE:MIC), which Litespeed owned about 850,000 shares of at the end of the second quarter, is up 51% this year after seeing a big gain in early August. The company provides services such as fueling to aircraft operators in the U.S., operates marine storage terminals for liquid products, and other lines of business. It’s another attractive income stock, paying a dividend yield of 5.8% at current prices, and trades at 11 times forward earnings estimates as Wall Street analysts expect strong earnings numbers next year here as well. We wouldn’t recommend this stock either.

Zimmerman and her team also liked LyondellBasell Industries NV (NYSE:LYB), a $31 billion market cap chemicals company. Its stock price is up 59% this year; despite a decline in revenue and earnings in the second quarter versus a year earlier, the sensitivity to the broader market (the stock has a beta of 2.6) is likely driving it higher during the current bull market. Its trailing P/E multiple is 15. We think that we might look at it as a potential value stock after it releases its third quarter earnings this week.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!