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.

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 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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!