Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Nathaniel August’s Mangrove Partners Finds New Stocks Selling At Bargain Prices

Page 1 of 2

Nathaniel August‘s $866 million long/short hedge fund Mangrove Partners is best known for its hefty 43.96% annualized returns in the three years following its launch in 2010. The fund employs a methodical screening-based sourcing model to identify mispriced equities. On the long side, the fund focuses on companies undergoing restructurings, asset-heavy businesses trading at significant discounts, and undervalued businesses trading at significantly discounted multiples. The short side makes bets on companies with flawed business models or those engaging in fraud. Prior to establishing Mangrove, August worked as a private-equity analyst at Goldman Sachs and was a director at the start-up hedge fund White Eagle Partners. Mangrove started out with just $12 million in assets and at the end of the first quarter, the market value of its public equity portfolio stood at $414.77 million, with the finance sector contributing 48% to this value. The fund initiated new positions in 14 companies, which were headed by Celladon Corp (NASDAQ:CLDN), Newfield Exploration Co. (NYSE:NFX), and Echostar Corporation (NASDAQ:SATS), and we’ll take a look at those new picks in this article.

Nathaniel August - Mangrove Partners

Mangrove Partners is just one of more than 700 hedge funds that we have in our database, whose equity portfolios we collate quarterly as part of our small-cap strategy. Even though most smaller investors believe that tracking 13F filings is a fruitless endeavor because they are filed with a delay of a maximum of 45 days after the end of a calendar quarter, the results of our research prove that is not the case. To be on the safe side, we used a delay of 60 days in our backtests that involved the 13F filings of funds between 1999 and 2012 and we still managed to gain an annual alpha in the double digits. Moreover, since the official launch of our strategy in August 2012, our small-cap strategy has obtained returns of more than 142%, beating the S&P 500 Total Return Index by greater than 83 percentage points (see the details).

Nathaniel August
Nathaniel August
Mangrove Partners

Mangrove acquired 1.0 million shares of Celladon Corp (NASDAQ:CLDN) valued at $18.94 million during the first quarter. The holding represents 4.57% of the fund’s portfolio value. So far this year, the $52.36 million clinical-stage biotechnology company’s stock has slumped by nearly 90%, which explains Mangrove’s interest in the company. The major part of this decline came in April when Celladon Corp (NASDAQ:CLDN)’s genetically-targeted enzyme replacement therapy, Mydicar, a treatment for heart failure, delivered disappointing results during its Phase 2b trial. The biotechnology industry in comparison, has gained about 18% year-to-date.  William Leland Edwards‘ Palo Alto Investors is the largest stockholder of Celladon Corp (NASDAQ:CLDN) within our database, holding some 1.45 million shares valued at $27.37 million.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!