Taminco Corp (TAM), Approach Resources Inc. (AREX), Chimera Investment Corporation (CIM): 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.

Approach Resources Inc. (NASDAQ:AREX)

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 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

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

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!