Longhorn Capital Loves Wal-Mart, Campbell, and GEO Group

Wal-Mart (WMT), Longhorn CapitalKris Kristynik and Longhorn Capital currently have a large portion of their capital allocated to ETFs – approximately 91% – but Kristynik does have a select group of stocks that he believes will outperform. Longhorn Capital manages a relatively small portfolio when compared with the other hedge funds we track, and the firm also keeps a relatively small number of holdings; currently only 16 according to Kristynik’s 13F filing through the end of June. Below are Longhorn’s top five stock holdings.

The GEO Group, Inc. (NYSE:GEO) offers government-outsourced services specializing in the management of correctional, detention, mental health, residential treatment, and re-entry facilities across the globe. GEO is Longhorn’s single largest stock holding and represented 1.49% of the firm’s portfolio at the end of second quarter. GEO is currently underserved by the hedge fund community, and Kristynik’s nimble firm was able to double its stake in GEO during the first quarter of 2011. Since this time, GEO’s stock price has remained relatively flat, having fallen to below $17 at the end of 2011, and since rebounding to almost $28. So far this year, Longhorn’s peers Matt Sirovich and Jeremy Mindich at Scopia Capital increased their GEO ownership by 8% in the first quarter, and 11% in the second quarter. GEO has shown positive signs of growth, with second quarter year-to-date numbers showing increased revenues of 5% year-over-year to $814 million, and net income that is up 3% to $38 million. The company also has a 2.86% dividend yield.

The Travelers Companies, Inc. (NYSE:TRV) is a provider of auto, home and business property casualty insurance. The company has a large fund backer in Mason Hawkins and Southeastern Asset Management, who owns about 5.2% of the company, which is about 5.5% of Southeastern’s total portfolio. Travelers’ stock price was beaten down in the first quarter due to poor earnings and bad weather, but many funds took this opportunity to increase their holdings, with Mason Hawkins adding 22% and Israel Englander taking a stake in the company. The company increased its dividend by 12% in the second quarter and currently yields 2.7%.

Campbell Soup Company (NYSE:CPB) manufactures and markets consumer food products. The company has attracted little to no hedge fund money (see all hedge funds’ holding Campbell here) and insider sentiment is in the red, with no recent insider purchases, and three insiders selling their shares around the $35 mark earlier this month. Moreover, Kristynik unloaded 50% of his position in Campbell during the second quarter. However, we do believe there is hidden value in Campbell that that market may be over looking. The company’s strategy for improving its revenue streams may take time, but we believe that it is currently undervalued when compared to peers.

Wal-Mart Stores, Inc. (NYSE:WMT) is the world’s largest retailer. The company operates in three segments – Wal-Mart Stores (about 60% of revenue), Sam’s Club (about 12% of revenue), and International (about 28% of revenue). Warren Buffet remains the top fund manager in Wal-Mart measured by capital amount, close to $3.3 billion in the second quarter, as well as having increased his stake 20% during the first quarter. Wal-Mart represents 4.4% of the Berkshire portfolio. There are also other key managers who have stakes in Wal-Mart that make up greater than 4% of their portfolios, including Boykin Curry and George Soros. For the company’s second quarter results, it beat on EPS and had positive same store sales increases. Comparable sales were up 2.2% at Wal-Mart and over 4% at Sam’s Club for the same quarter last year. Longhorn Capital currently owns $3.5 million worth of the stock.

Aon PLC (NYSE:AON) is a global provider of insurance brokerage services, insurance products, and risk and insurance advice, as well as other consulting services. The company has excelled since its October 2012 acquisition of Hewitt Associates, Inc., with its stock price up over 25% since the acquisition. The company increased revenues by 12% in 2010 and 33% in 2011. Revenue is expected to rise 4.5% in 2012. Both Kris Kristynik and Mason Hawkins believe in the insurance sector. Aon is another key holding of Hawkins’ and Southeastern’s portfolio, coming in as his sixth largest holding at 5.34%; see all of Southeastern’s holdings here. Kristynik holds a little over $3 million in the stock, good for 0.93% of his portfolio. From an analytical standpoint, it appears that AON is still in growth mode, expanding into emerging markets while exploring cross-selling opportunities and products afforded them via the Hewitt acquisition. Other fund managers have also taken notice of this, and of the over 400 hedge funds we track, 13 have over 3% of their portfolios concentrated in AON.

While hedge fund sentiment should not serve as an end-all-be-all for individual investors, it can provide a starting point for further research. In fact, empirical studies have shown that there are some hedge fund-centric strategies that can be utilized to generate excess returns of up to 7% a year. Continue reading about this phenomenon here.

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

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

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!