Sabal Capital Management Was Right to Buy More Shares of GameStop Corp. (GME), Time Warner Inc (TWX) and Other Companies

Sabal Capital Management is a fund led by William Charters and Mario Marcon, which revealed an equity portfolio worth $43.47 million in its 13F filing for the end of June. Even though Sabal’s portfolio is diversified across sectors, over a half of it was invested in technology stocks. In this article, we are going to discuss some of its top picks.

But before we get to that, we should also mention that Sabal Capital’s equity portfolio returned 18.37% in the third quarter, based on our analysis of its holdings in companies worth at least $1.0 billion. Even though we used the holdings as reported in the 13F filing for the end of June and didn’t take into account the possible changes during the quarter and excluded its other investments that are not revealed in the filing, we still can assess the fund’s investing skills.

With this in mind, let’s take a closer look at Sabal Capital’s positions in GameStop Corp. (NYSE:GME), Time Warner Inc (NYSE:TWX), OSI Systems, Inc. (NASDAQ:OSIS), and Nomad Foods Limited (NYSE:NOMD).

In GameStop Corp. (NYSE:GME), Sabal boosted its stake by 370% to 159,991 shares worth $4.25 million during the second quarter. In the following three months, the stock returned 5.2% during the third quarter. At the end of the second quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 9% from the first quarter. More specifically, Arrowstreet Capital was the largest chareholder of GameStop Corp. (NYSE:GME), with a stake worth $54.3 millions reported as of the end of June. Trailing Arrowstreet Capital was Stelliam Investment Management, which amassed a stake valued at $45.8 millions. AQR Capital Management, Citadel Investment Group, and Renaissance Technologies also held valuable positions in the company.

Next in line is Time Warner Inc (NYSE:TWX), in which Sabal held 50,283 shares, up by 38% on the quarter; the stake was valued at $3.70 million at the end of June. The stock returned 8.8% during the third quarter. At the end of the second quarter, a total of 63 of the hedge funds tracked by Insider Monkey were long this stock, down by five funds over the quarter. Among these funds, D. E. Shaw & Co. held the largest stake in Time Warner Inc (NYSE:TWX), worth $380.8 million. The second most bullish fund manager was David Einhorn of Greenlight Capital, with a $346.9 million position. Remaining peers with similar optimism included Daniel S. Och’s OZ Management, Mario Gabelli’s GAMCO Investors and Peter Adam Hochfelder’s Brahman Capital.

OSI Systems, Inc. (NASDAQ:OSIS) represented a new position in Sabal’s equity portfolio, as the fund amassed 62,608 shares worth $3.64 million during the second quarter. The move to initiate a stake in the company was timely, as the stock gained 12.5% in the third quarter. Overall, during the second quarter, the number of funds from our database long OSI Systems went up by four to 11.  The largest stake in OSI Systems, Inc. (NASDAQ:OSIS) was held by Tremblant Capital, which reported holding $21 million worth of stock at the end of June. It was followed by G2 Investment Partners Management with a $4.8 million position. Other investors bullish on the company included Sabal Capital Management, PEAK6 Capital Management, and Millennium Management.

Then there’s Nomad Foods Limited (NYSE:NOMD), in which Sabal raised its stake by 62% on the quarter to 449,775 shares worth $3.59 million at the end of June. The stock surged by 48.1% in the third quarter, improving the returns of 33 funds from our database that held shares of the company heading into the quarter, versus 31 funds a quarter earlier. The largest stake was held by Bill Ackman’s Pershing Square, which reported ownership of $266 million worth of Nomad Foods Limited (NYSE:NOMD)’s stock. Sitting at the No. 2 spot was Keith Meister of Corvex Capital, with a $123.1 million position. Some other members of the smart money with similar optimism included Dan Loeb’s Third Point, Ken Griffin’s Citadel Investment Group and Robert Pohly’s Samlyn Capital.