Jeffrey Bronchick’s Cove Street Capital’s Top Picks

Cove Street Capital, founded and managed by Jeffrey Bronchick, is a hedge fund that defines itself as a classic value investor, in the tradition of Ben Graham and Warren Buffett. Over the last reported quarter, Cove Street purchased 6 new stocks, increased its stakes in 29 of its preexisting positions, and sold out of 11. Let’s thus take a look at this fund’s top picks for the last reported quarter in order to elucidate if any of them could stand as interesting investment options.

Mr. Bronchick’s fund’s largest long position is placed at Taminco Corp (NYSE:TAM), a $1.5 billion market cap pure play producer of alkylamines and alkylamine derivatives. Over the last reported quarter (Q1 2014), Cove Street upped its exposure to the company by 3%, and now owns 1.299 million shares, worth more than $27 million. The position in Taminco Corp (NYSE:TAM) accounts for more than 5% of the fund’s total portfolio.

In addition to Mr. Bronchick, other hedge fund managers seem to like Taminco Corp (NYSE:TAM). Robert Joseph Caruso (Select Equity Group) also increased its bets slightly over Q1, and now holds 4.2 million shares, while Doug Silverman and Alexander Klabin (Senator Investment Group) last declared owning 3 million shares.

Jeffrey Bronchick - Cove Street Capital

Approach Resources Inc. (NASDAQ:AREX) is second on this list. This $861 million market cap independent energy company (engaged in the exploration, development, production and acquisition of unconventional natural gas and oil properties in Midland Basin of the greater Permian Basin in West Texas) saw Cove Street boost its exposure by 9% over Q1. The fund now owns 1.267 million shares of Approach Resources Inc. (NASDAQ:AREX), worth around $26 million, according to the latest 13F filing.

This position makes Cove Street the largest hedge fund shareholder – amongst those we track – of Approach Resources Inc. (NASDAQ:AREX). Other prominent hedge funds betting on Approach Resources Inc. (NASDAQ:AREX) are Israel Englander’s Millennium Management, with 238,856 shares, and Ken Griffin’s Citadel Investment Group, with 168,808 shares.

Finally, there’s Chimera Investment Corporation (NYSE:CIM), a $3.25 billion market cap specialty finance company. The firm witnessed the largest increase in Cove Street’s position, amongst the companies listed here. After boosting its stake in Chimera Investment Corporation (NYSE:CIM) by 26%, the fund owns 8.65 million shares of the company, also valued at approximately $26 million by the end of Q1.

On top of Mr. Bronchick’s, other funds have shown themselves bullish about this company. For instance, Leon Cooperman’s Omega Advisors last increased its exposure to Chimera Investment Corporation (NYSE:CIM) by 7%, and now owns more than 66 million shares, and Joshua Friedman and Mitchell Julis’ Canyon Capital Advisors more than tripled its stake, and last declared owning 11.4 million shares.

Cove Street Capital seeks superior long-term performance through the purchase of securities selling at prices materially below its estimate of intrinsic value. Its equity portfolio, valued at more than half a billion dollars, is quite diversified but has a relative focus on financial stocks (35% of the total portfolio), services stocks (19%), and basic materials stocks (11.5%).

Disclosure: Javier Hasse holds no position in any stocks mentioned

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 Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

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!