Steven Cohen Building a ‘House’ For His Portfolio With These Stocks

Page 1 of 2

Steven Cohen house: Steven Cohen’s SAC Capital is one of the biggest hedge fund companies in the world. Although redemptions stemming from the firm’s federal indictment for criminal securities fraud have lowered AUM figures a bit, SAC still manages about $9 billion in internal assets, and is a major force on Wall Street.

In its latest 13F filing with the SEC, Cohen and SAC reported several large positions in its equity portfolio (see them here),but we’re going to focus on the firm’s small-cap picks. As you’ll see, he’s sheltering his shorter-term bets with these long-term plays, many of which happen to be in the small-cap space. You could say he’s building a metaphorical “house” in case any of his higher-turnover positions have a rainy day.

Here at Insider Monkey, we’ve found that the small-cap space typically represents hedge funds’ best investments, and our empirical research supports this phenomenon. Our small-cap strategy beat the market by more than 29 percentage points in its first year, and long-range studies are equally as promising.

With that being said, Steven Cohen and his investment team have been favoring a few small-cap names as of late, so let’s take a look at their top three.

Steven Cohen

RenaissanceRe

Cohen’s position in RenaissanceRe Holdings Ltd. (NYSE:RNR), the reinsurance and insurance provider, is the 11th largest in his equity portfolio, sitting ahead of large-cap names like Facebook Inc (NASDAQ:FB) and Chipotle Mexican Grill, Inc. (NYSE:CMG). The hedge fund manager’s conviction in RenaissanceRe was strong earlier this year, when he boosted his stake by 1000% in the first quarter.

Compared to many of his stock picks, Cohen’s RNR position is built for the long-term; he held shares as far back as our records go, in Q4 2010. Since this time, the stock has risen by nearly 40%, and more recently, it’s issued two earnings beats in the last three quarters. It’d be wise tomonitor Cohen’s future moves here, as shares still trade at depressed multiples despite the gains.

Goodyear

Tire manufacturer The Goodyear Tire & Rubber Company (NASDAQ:GT) is another long-term small-cap holding on Cohen’s books. Like RenaissanceRe, his position in Goodyear stretches back as far as our records go. We can’t stress enough that this is a very important fact to understand. On average, Cohen’s portfolio turnover is about one-fourth to one-third of his total holdings depending on the quarter, as his reliance (at least partially) on quantitative methods ensures a moderate level of short-term transactions. The fact that Cohen has held a stake in RenaissanceRe and Goodyear for nearly three years cannot be overlooked.

With regard to the latter, David Tepper and Joel Greenblatt are also bullish on Goodyear, and there are plenty of reasons to share this sentiment. For starters, the company’s footprint outside of the U.S. is steadily improving, particularly on the margin side. Goodyear also said last week that it expects 10%-15% operating income growth through at least 2016, while reinstating a quarterly dividend and a $100 million share buyback.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!