Phil Falcone is the founder of Harbinger and LightSquared, the latter for which he has been in the news for lately after the company filed for bankruptcy. This quarter, his picks are heavy on the natural resources. Here are his portfolio moves during the first quarter:
Spectrum Brands (NYSE: SPB) is getting a head start to the year to its Home & Garden business line with earlier than expected warm weather. Retail inventories for lawn and garden supplies have already been increasing demand for re-orders in March. And with the Black Flag/TAT deal, Home & Garden should lead the way for a very strong year. However, management has reported that the small appliance business will face headwinds into 2013 as inflation in Asia compresses margins. The plan is to seek new suppliers in other markets while making changes to its typical promotional offerings. We think margin pressure here could potentially be offset by Global Batteries & Appliances segment performance, which has seen some decent traction. Moreover, Global Pet Supplies appearing to have bounced off of lows with the FURminator acquisition, we think this segment can start contributing to growth numbers. SPB will continue to be driven by product launches and tuck-in acquisitions, but we simply don’t see any meaningful catalysts ahead and prefer other companies in the consumer space.
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