Should You Follow This Investor Into His Top Picks?

#3 Magellan Midstream Partners, L.P. (NYSE:MMP)

Shares held (as of September 30): 434,650
Total Value (as of September 30): $26.13 million
Percent of Portfolio (as of September 30): 7.21%

Shares of Magellan Midstream Partners, L.P. (NYSE:MMP) have declined by 16.1% year-to-date as low crude prices and higher Treasury yields weigh on the MLP. With a dividend yield of 4.39%, the market is saying that Magellan Midstream Partners LP’s dividend is safe. It shouldn’t come as a surprise to any Magellan Midstream Partners, L.P. (NYSE:MMP) shareholders, as the stock has one of the strongest coverage ratios in the midstream sector. With a long term debt to trailing 12-month EBITDA ratio of just 3, Magellan Midstream Partners is also one of the least leveraged companies. Among the investors from our database, John Osterweis‘ Osterweis Capital Management owns 1.19 million shares as of the end of June.

#2 Air Lease Corp (NYSE:AL)

Shares held (as of September 30): 944,900
Total Value (as of September 30): $29.22 million
Percent of Portfolio (as of September 30): 8.06%

Air Lease Corp (NYSE:AL), which purchases and leases commercial aircraft to airlines worldwide, has beaten analyst revenue and earnings estimates every quarter this year as airlines have more money to spend because of low jet fuel prices. Other hedge funds are for the most part bullish on Air Lease, with 29 investors (out of the 730 that we track) reporting stakes worth a cumulative $494.93 million or 14.2% of the float as of the end of June. Shares are down 2.75% year-to-date, but trade at a forward P/E of 9.97. Another shareholder of Air Lease is Peter Adam Hochfelder‘s Brahman Capital, which held 4.56 million shares at the end of the second quarter.

#1 Macquarie Infrastructure Corp (NYSE:MIC)

Shares held (as of September 30): 999,703
Total Value (as of September 30): $74.64 million
Percent of Portfolio (as of September 30): 20.59%

At 20.59% of the equity portfolio, Macquarie Infrastructure Corp (NYSE:MIC) is Selz Capital’s top pick and for many good reasons. The company’s free cash flow growth is on track and given the energy downturn, Macquarie Infrastructure has the opportunity to pick up energy infrastructure assets on the cheap. A REIT spin-off of International-Matex Tank Terminals, which owns and operates bulk liquid storage terminal facilities, is also not out of the question. Macquarie’s dividend is secure and growing, as the management reaffirmed the company’s dividend growth guidance ‘of at least 14% in each of 2015 and 2016, making the stock’s already attractive 5.6% dividend yield even more so.

 

Disclosure: none