Nehal Chopra’s Ratan Capital Group has filed its 13F with the SEC for the reporting period of March 31. Chopra’s public equity portfolio has become increasingly concentrated in recent quarters, which makes her large move into four new stocks rather compelling. Of course, it doesn’t hurt that Chopra ran one of the top performing funds in our database during the first quarter, trumping other hedge funds with net returns of 22.5% according to CNBC. While Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Actavis plc (NYSE:ACT) remain her top picks and her exposure to the healthcare industry remains above 50%, she made four new purchases during the first quarter which we’ll look at in this article, those purchases being in Kraft Foods Group Inc (NASDAQ:KRFT), Pinnacle Foods Inc (NYSE:PF), Zayo Group Holdings Inc (NYSE:ZAYO), and Calpine Corporation (NYSE:CPN).
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 144% and beating the market by more than 84 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
With 1.01 million shares valued at $88.12 million, Kraft Foods Group Inc (NASDAQ:KRFT) is the largest new holding in the portfolio of Ratan Capital Group. Kraft Foods Group Inc (NASDAQ:KRFT) is also the most popular stock in the consumer non-durables industry, with 70 investment managers tracked by Insider Monkey having positions in the packaged food company. Earlier in March, the packaged food & beverage company entered into a definitive merger agreement with H.J. Heinz Company, under which the newly-merged company will be called The Kraft Heinz Company. This combined company will bring together brands like Kraft, Heinz, Oscar Mayer, Philadelphia, and Ore-Ida under one roof. James Dinan‘s York Capital Management and Peter Adam Hochfelder’s Brahman Capital hold large positions in Kraft Foods Group Inc (NASDAQ:KRFT).
Pinnacle Foods Inc (NYSE:PF) comes in at number two in terms of the top new stock picks of Chopra as she opened a position consisting of 1.78 million shares of the food manufacturer, valued at $72.56 million. Shares of the baking company have grown 20.06% year-to-date and are currently trading close to their 52-week high of $43.12. Bob Gamgort, CEO of Pinnacle Foods Inc (NYSE:PF), said during his company’s April 30 earnings call that it is looking for innovative products in the baking category and is likely to offer some premium new products in the upcoming quarter. The net earnings of Pinnacle Foods Inc (NYSE:PF) were up 2% for the quarter ending on March 29 as compared to the year-ago earnings of $40.7 million. Levin Capital Strategies and JANA Partners are among the major shareholders of Pinnacle Foods.