Babcock & Wilcox Co (NYSE:BWC) is another strong performer in Blue Harbour’s portfolio, whose stock appreciated by 6.26% returns during the first quarter. Robbins’ fund holds about 10.54 million shares of the provider of clean energy technology and services, according to a 13D filing submitted earlier this year, up by around 350,000 shares from the stake held at the end of 2014. The stake constitutes 9.9% of Babcock & Wilcox’s outstanding common stock. Babcock & Wilcox Co (NYSE:BWC)’s Power Generation Group has recently been granted a contract approximately valued at $40.3 million to construct a spray dryer absorber for controlling sulfur dioxide emissions from Colorado Springs Utillities’ coal-fired plant. The subsidiary is part of a consortium that will carry out other tasks in this emissions control project. Jeffrey Smith‘s Starboard Value and Robert Rodriguez and Steven Romick’s First Pacific Advisors are two other investors bullish on Babcock & Wilcox Co (NYSE:BWC).
The fund initiated a position in Investors Bancorp, Inc. (NASDAQ:ISBC) during the first quarter of 2014 and boosted its stake throughout the rest of the year. Since the beginning of 2015, the investor disclosed two 13D filings, the latest showing a stake of 24.6 million shares, representing 6.9% of the company’s outstanding stock. At the 13D Monitor Active-Passive Investor Summit in New York, Robbins expressed his belief that the company is undervalued mainly because of its complicated mutual-holding structure. The investor added that the company should use its excess cash on buybacks, acquisitions, and perhaps to increase its dividend. Moreover, the manager of Blue Harbour considers that the stock could top $19 per share by 2019. After Blue Harbour, Jonathon Jacobson’s Highfields Capital Management is the largest shareholder of Bancorp, Inc. (NASDAQ:ISBC) among the funds that we track.
Insider Monkey tracks 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 6 basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of 7 basis points per month between 1999 and 2012. These stocks were able to generate alpha because of their lower risk profile. 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. These stocks were slightly riskier, so their monthly alpha was 80 basis points (read the details here). We believe investors can be better off by focusing on small-cap stocks rather than large-cap stocks.
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