Louis G. Navellier established Navellier & Associates, a hedge fund focusing on growth investments, in Reno, Nevada in 1980. Apart from successfully managing his hedge fund for over three decades, Mr. Navellier is also famous for authoring the bestseller “The Little Book That Makes You Rich”. Navellier & Associates recently filed its 13F with the Securities and Exchange Commission (SEC) for the reporting period of June 30, 2015. According to the filing, Navellier & Associates’ public equity portfolio was worth slightly over $1.1 billion at the end of June. Healthcare and technology were the top two sectors for the fund as of the reporting period, comprising 25% and 21% of the fund’s equity portfolio, respectively. Additionally, the top ten stock picks of the fund accounted for 34.55% of its equity portfolio value. The filing also revealed that Navellier & Associates sold out of 55 stocks, made additional purchases in 196 stocks and added 68 new stocks to its portfolio during the quarter. In this article we are going to dig deeper into the top three biggest moves of Navellier & Associates during the second quarter: Allergan PLC (NYSE:AGN), Electronic Arts Inc. (NASDAQ:EA), and Skechers USA Inc (NYSE:SKX).
Professional investors like Navellier spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 135% and beaten the market by more than 80 percentage points since the end of August 2012, and by 4.6 percentage points in the first quarter of this year (see the details).
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Allergan PLC (NYSE:AGN) was Navellier & Associates’ top new stock pick during the second quarter and also its top stock pick overall. The fund held 146,431 shares of the company valued at over $44.4 million as of June 30, 2015. Previously known as Actavis plc (NYSE:ACT), the company changed its name to Allergan, Inc. (NYSE: AGN) after it completed the acquisition of the latter earlier this year in a $70.5 billion deal. Although shares of the company remained flat during the second quarter, Allergan, Inc. (NYSE:AGN) has been on an acquisition spree in the last few months. In June, the company acquired Kythera Biopharmaceuticals Inc. (NASDAQ:KYTH) in a deal valued at $2.1 billion and in the second week of July it announced entering into two acquisition agreements. The first was the acquisition of Oculeve, a dry-eye treatment company, for $125 million, while the second was for the global rights of Merck & Co., Inc. (NYSE:MRK)’s experimental stage migraine drugs, MK-1602 and MK-8031. Philippe Jabre‘s Jabre Capital Partners and Andreas Halvorsen’s Viking Global were two of the largest shareholders of Allergan at the end of the March quarter.
Navellier & Associates increased its stake in Electronic Arts Inc. (NASDAQ:EA) by almost 850% to over 368,000 shares valued at $24.5 million on June 30, 2015. The stake in Electronic Arts Inc. (NASDAQ:EA) now constitutes 2.15% of Navellier & Associates’ equity portfolio. Shares of the game developer have been on a steady rise since the beginning of the year, up by 52% year-to-date and by almost 20% in the second quarter alone. A lot of this surge can be attributed to the upcoming game “Star Wars: Battlefront”, which the company will be releasing this holiday season and which has already generated significant interest among gamers. Most analysts are bullish on the stock, with an average rating of ‘Overweight’ and an average price target of $69.74, almost 3.5% below its current trading price. Philippe Laffont‘s Coatue Management held a significant stake in the company at the end of the first quarter.
Skechers USA Inc (NYSE:SKX) turned out to be the third biggest move of Navellier & Associates in the second quarter. The fund increased its stake in the company by 1,665% during the quarter to 202,034 shares valued at over $22.18 million. Just like the other two companies in which Navellier & Associates made its biggest moves, the shares of Skechers USA Inc (NYSE:SKX) have also been performing very well in 2015, up by over 110% year-to-date and by 52% in the second quarter. The company declares its second quarter earnings on July 21 and analysts expect it to report an EPS of $1.00, above the $0.69 EPS it reported for the same quarter of last year. All ten of the analysts who cover the stock have a ‘Buy’ rating on it, with an average price target of $126.89, very near to the company’s current trading price of $118.70. Jim Simons‘ Renaissance Technologies also increased its stake in the footwear maker, by 292% during the first quarter of 2015 to over 574,000 shares.
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