Tim Mullen’s Swift Run Capital Is Betting On These Stocks

After each quarter, hedge funds and other major investors disclose many of their long equity positions with the U.S. Securities and Exchange Commission. As part of our investment strategies research, we track hundreds of these 13F filings. We have come to realize that the most popular small-cap stocks among hedge funds generate an average return of 18 percent per year (check out the details on our strategy here). Our model portfolio, which sticks to this approach, outperformed the S&P 500 by 29 percentage points in its first year, having returned 47.6 percent. Following the end of the fourth quarter of 2013, we have been closely following 13F filings in order to find the best investment options for you.

On February 3rd, Tim Mullen’s Swift Run Capital filed its first 13F Form. In the filing, the fund declared holding long positions in, at least, 49 publicly traded companies. In this article we will take a look at Swift Run’s main holdings as of Dec. 31st 2013, picking the largest positions in terms of value.

First on our list is Hess Corp. (NYSE:HES), a large-cap global integrated energy company of which  Swift Run owns 186,355 shares -valued at roughly $13.8 million. This stock accounts for approximately 12% of the total value of its equity portfolio. In addition, other top hedge funds also seem to feel bullish about Hess Corp. (NYSE:HES). For instance, Paul Singer’s Elliott Management –the company’s largest hedge fund bull – last reported increasing its stakes by 3% (over 2013’s Q2), to more than 17 million shares –which accounted for more than 24% of its Q3 equity portfolio.

Hess Corp. (NYSE:HES)

On the contrary, opinion in relation to Hess Corp. (NYSE:HES) among analysts is quite divided. About half of them recommend buying this stock, while the other half, recommends holding. Moreover, the company was recently downgraded by Mizuho Research Firm, from a “Buy” to a “Neutral” recommendation. Nonetheless, offering returns that slightly surpass its industry’s average and a valuation just below the industry mean, while paying out dividends of 1.32%, this stock does not look that bad, and could add value to your long-term portfolio.

Another interesting case is that of Newcastle Investment Corp. (NYSE:NCT), a $1.9 billion market cap real estate investment and finance company. Mullen’s fund $9.1 million (1,699,633 shares) stake in this company comprises around 8% of its total Q4 holdings. Furthermore, Mullen is not the only one feeling confident about this stock’s future performance: over Q3, most of the largest hedge fund bulls increased their stakes in the company. The front runner, John Osterweis’ Osterweis Capital Management slightly upped its bets, to 12.6 million shares. James Dondero’s Highland Capital Management did the same, and now holds more than 8 million shares (up 12% from Q2). Other prominent investors that boosted their involvement in Newcastle Investment Corp. (NYSE:NCT) are D E Shaw and Jacob Gottlieb.

Moreover, analysts also seem to like this stock: industry leading margins and returns, paired with a cheap valuation (8.4x P/E vs. an industry mean of 18x), make the stock a buy/strong buy case for most analysts, even though consensus estimates point towards below average EPS growth figures for the next five years.  A mean price target of $6.35 per share implies a 17% upside potential.

The third and seventh places in my list are also occupied by REITs – Colony Financial Inc (NYSE:CLNY) and New Residential Investment Corp (NYSE:NRZ), respectively. These stakes combined are worth more than $15.66 million. Another fund betting on both there REITs is Ken Griffin´s Citadel Investment Group.

Another thing to highlight is the fact that Swift Run holds big stakes in MLPs (what is an MLP?) from several companies, including 145,123 shares of Oaktree Capital Group LLC (NYSE:OAK). For a complete list of Swift Run´s holdings, check out the latest (and only) 13F Form at the SEC website.

 

Disclosure: Javier Hasse holds no position in any stocks mentioned

Recommended Reading:

We Told You to Buy Furiex: $FURX is Up 132% Today

First Ackman, Now John Griffin’s Blue Ridge Is Betting On Platform Specialty Products Corporation (PAH)

Soros Fund Management Discloses New Massive Stake in Polycom Inc (PLCM)

blog comments powered by Disqus
Insider Monkey Headlines
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 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

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!