Peter Keane Likes Financial And Transportation Stocks

Keane Capital Management is a Charlotte, North Carolina based hedge fund founded in 1999 by Peter Keane. When Wachovia Corp announced it intended to take over Interstate/Johnson Lane Inc., a brokerage firm where he was a partner and lead portfolio manager, Keane decided to buy his fund from the new owners and went out on his own. In its first 6 months, Keen Vision Fund registered a return of 23% and next year it posted a net return of 46.8%. Keane went on to launch another two funds, which have enjoyed great success, posting double-digit average annual returns. He invests mainly in small companies with a market cap smaller than 2 billion and which are not among Wall Street’s favorites. Although the funds are long/short ones, Keane mostly focuses on long positions and rarely buys more than 5% of the common stock of a company. According to Keane, a firm is successful if “50% of its ideas work and 30% work significantly”.

During the fourth quarter of 2013, Keane has made some notable changes to his funds’ portfolios. He has increased Keane Capital’s stakes in companies like Imperial Holdings, Inc. (NYSE:IFT) and M.D.C. Holdings, Inc. (NYSE:MDC), but has also reduced some positions, one of them being Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). His top 5 picks, which includes other financial, technology and transportation companies, has not suffered any changes. Let’s take a deeper look into some of the stocks in Keane’s equity portfolio.

Himax Technologies, Inc. (ADR) (NASDAQ:HIMX)

First up is Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), a producer of semiconductors for flat panel displays. During the previous quarter, Keane slightly decreased his investment by selling around 1,900 shares. As a result, Keane Capital currently holds more than 216,800 shares worth approximately $3.19 million. Julian Robertson, the legendary hedge fund manager, has, on the other hand, added Himax Technologies to his portfolio during the same period. Tiger Management has reported 1.96 million shares in its latest 13F filing.  Himax posted revenues of $195 million and earnings per share (EPS) of $0.1 for the previous quarter. Analysts expect it to register the same performance in the current quarter. The company has a market cap of $2.65 billion and pays an annual dividend of $0.25, which represents a yield of 1.80%. The stock is trading at a trailing Price to Earnings (P/E) ratio of 42.46, significantly lower than the industry average of 224.70.

Next up is Lionbridge Technologies, Inc. (NASDAQ:LIOX). Keane has reduced his funds’ position by 8% to 532,800 shares, reportedly, worth $3.17 million. Jim Simons, the hedge fund guru, is actually optimistic about this stock and during the previous quarter, his fund, Renaissance Technologies, has increased its holding by 54% to 530,320 shares. Lionbridge is a provider of language, content and testing solutions that has a worldwide presence. The company has a market cap of $454 million and does not pay a dividend. So far this year the stock has advanced 21% to a current price of $7.15 per share and trades at a trailing P/E ratio of 37.53. For the three months ended December 31, 2013, Lionbridge posted revenues of $127 million and EPS of $0.18. This quarter, it is expected to register $122 million in revenues and $0.05 in earnings.

Keane is optimistic about the prospects of Imperial Holdings, Inc. (NYSE:IFT), having increased his funds’ investment in this stock by 31% to 475,900 shares, valued at $3.11 million. A provider of financial services that operates mainly in United States, Imperial Holdings has a market cap of $117 million and does not pay a dividend. The stock is traded at a trailing P/E ratio of 2.57, well below the industry average of 21.40. The company is set to announce 2013 fourth quarter financial results today, March 10, after the market close. For the same period in 2012, Imperial Holdings posted revenues of $7 million and a loss per share of $0.36.

Another stock that Keane is betting big on is M.D.C. Holdings, Inc. (NYSE:MDC), a company that engages in home building and provision of financial services. During the fourth quarter of 2013, Keane upped his stake by 72%, taking it to 95,000 shares valued at a little over $3 million. M.D.C. Holdings has a market cap of $1.43 billion and pays an annual dividend of $0.25, which represents a yield of 0.9%. The stock is traded at a P/E ratio of 4.65, lower than the industry average of 10.60. The company posted revenues of $462 million and earnings of $0.64 for the previous quarter and is expected to register $340 million in earnings and EPS of $0.23 for the first three months of 2014.

Last but not least is Air Transport Services Group Inc. (NASDAQ:ATSG), a provider of aircraft leasing and maintenance mainly for cargo transportation. During the previous quarter, Keane Capital reduced its holding of this stock by 17% and now owns 377,010 shares valued at approximately $3 million. For the fourth quarter of 2013, Air Transport Services Group posted revenues of $157, a 2% year-over-year increase, and earnings of  $0.15 per diluted share. 2014 first quarter is expected to bring revenues of $149 million and EPS of $0.10. The company has a market cap of $481 million and does not pay a dividend. The stock trades at a trailing P/E ratio of 13.59 and has a beta of 4.45, which makes it a very volatile one.

Disclosure: none.

Recommended reading:

Baker Bros. Advisors’ Latest Moves Involve ACADIA Pharmaceuticals Inc. (ACAD) & Synageva Biopharma Corp (TRMS)

FPR Partners Ups Its Stake in ViaSat, Inc. (VSAT)

SAC Capital Advisors Raises Stake in Walter Investment Management Corp (WAC)

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

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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!