CastleRock Asset Management is a New York based investment firm founded in 1993. The fund focuses on long/short term U.S. large/mid cap equity strategy and is fundamental research-driven. Paul Tanico is the Managing Principal of the fund along with Ellen Adams. Tanico has over 28 years of career in the investment business. He started his career in research at David J. Greene & Co. He then worked as a portfolio manager at Atalanta Sosnoff, Neuberger Berman and Omega Advisors. He was also a founder and former director of Tell Canada Telecommunication Group. Tanico received a B.S. in Finance and Accounting from New York University in 1977 and a J.D. from Fordham University School of Law in 1980. He is a member of the New York State Bar.
Below are the trading activities of CastleRock as of 1Q2011:
CastleRock had a pretty diversified portfolio in Q1 2011 with a total of 56 securities valued at $708 million on March 31. The fund had a bullish view of CBS Corp. in the first quarter and bought 1.4 million new shares valued at $35 million on March 31. The stock comprised nearly 5% of CastleRock’s portfolio and had a slight negative return of approximately 1% since the end of the first quarter. Chris Hohn’s Childrens Investment Fund had a bullish view of CBS as well and increased its holdings by 1,245% in the first quarter of this year. CBS comprised 30% of Chris Hohn’s portfolio as of the end of March. Ken Heebner’s Capital Growth Management was another fund that was bullish on the stock as they almost quadrupled its CBS holdings.
Another favorite stock of CastleRock in the first quarter was Marathon Oil Co. (MRO). CastleRock bought 485K new shares of MRO in the first quarter, which comprised 3.7% of CastleRock’s aggregate portfolio as of March 31. Unfortunately, the stock lost 18% in value since then. We see Reid Walker’s WS Capital being extremely bullish on MRO and investing almost 13.5% of its total portfolio on this company. Ervin Shindell’s Roundkeep Advisors was another bullish fund for MRO.
CastleRock sold 34% of its Apple holdings in the first quarter of 2011. Yet, the stock returned 7% since the end of March. Chase Coleman’s Tiger Global Management and Michael Messner’s Seminole Capital were two of the bullish funds for Apple in the first quarter of 2011 as they both invested more than 10% of their overall portfolio in this company.
Among the new holdings it bought, CastleRock enjoyed double digit returns in Amazon (AMZN) and Thoratec (THOR) despite the recent market turmoil. The fund had $14 million invested in these two securities as of March 31, comprising slightly less than 2% of the overall 13F portfolio. Julian Robertson’s Tiger Management enjoyed the return as it had invested 7% of its portfolio in AMZN. Chase Coleman, again, had a bullish view of AMZN and increased its holdings by more than 40%. Most hedge funds were extremely bullish for THOR in the first quarter of 2011. Eric Bannasch’s Cadian Capital , Lee Ainslie’s Maverick Capital , and John Burbank’s Passport Capital have all enjoyed the roughly 20% return the stock brought in.
Mr. Tanico probably wishes that he had invested all his money in Petrohawk Energy (HK). He had only about four thousand shares of HK in the last quarter of 2010, all of which he sold in the first quarter of 2011. HK returned an incredible 57% since the end of March, thanks to a buyout offer from BHP. Edward Gilhuly’s Sageview Capital made more than $10 million from this stock as it had bought 900K new shares of HK during the first quarter of 2011.
Overall, CastleRock’s 3/31 13F holdings had a negative return of 19% since the end of March, which is 8 percentage points below the return generated by the S&P 500 in the same time period.