United Rentals Inc. (URI), Techne Corporation (TECH), SBA Communications Corporation (SBAC): Amongst Rail-Splitter Capital Management’s Top Picks from Q2

John Croghan and Richard Fradin’s Rail-Splitter Capital Management has recently disclosed its long equity positions for the second quarter of 2014 in a filing with the SEC. The fund’s portfolio saw important modifications, especially amongst its top holdings. Rail-Splitter acquired 13 new stocks, increased its stakes in 12 more positions, and sold out of 15 of its preexisting holdings. So, let’s take a look at the fund’s top five picks for Q2.

Whirlpool Corporation (NYSE:WHR) was displaced from the first place that it occupied in the previous quarter, after the fund sold about 1/3 of its shares over Q2. The company was replaced by a newcomer at Rail-Splitter’s portfolio: United Rentals Inc. (NYSE:URI), a $10.4 billion market cap equipment rental company that operates in the U.S., Canada and Mexico. The fund started a position with 110,350 shares at United Rentals Inc. (NYSE:URI) over Q2. The stake is worth about $11.5 million. This position accounts for almost 4% of the fund’s total equity portfolio, valued at almost $300 million.

United Rentals, Inc. (NYSE:URI)

As we have recently reported, another fund that added United Rentals Inc. (NYSE:URI)’s stock to its portfolio over Q2 is Louis Navellier’s Navellier & Associates. The fund disclosed ownership of 457,817 shares, worth almost $48 million. Other major funds, like Paul Reeder And Edward Shapiro’s Par Capital Management are also betting on this company. Par Capital last declared ownership of 934,813 shares of the company, after a slight increase in its position in the stock.

Second in line is Techne Corporation (NASDAQ:TECH), a $3.4 billion market cap company engaged in the development, manufacturing and sale of biotechnology products and clinical diagnostic controls. Although the stock price is up almost 8% since the end of Q1, its valuation, at 30 times the company’s earnings still looks very attractive, especially when compared to its industry’s average of more than 70x P/E. This valuation, coupled with industry leading margins and above average returns, make it easy to understand why Rail-Splitter upped its stake by 3% over Q2. The fund now owns 116,083 shares of Techne Corporation (NASDAQ:TECH), worth more than $10 million, and stands amongst the top 5 hedge fund shareholders (amongst those we track) at the company.

Ken Griffin also seems to feel quite bullish about Techne Corporation (NASDAQ:TECH). Over the last reported quarter – Q1, his fund boosted its exposure to the company by 27%, and now owns 264,165 shares.

Next is an interesting case. Rail-Splitter held 111,150 shares of SBA Communications Corporation (NASDAQ:SBAC) by the end of Q1, and this holding occupied the seventh place in this list. Over Q2, the fund cut its exposure to SBA Communications Corporation (NASDAQ:SBAC) by 5%, but the value of this position grew on the back of a 12.75% increase in the stock price –since March 31 2014. This stake worth $10.7 million now occupies the third spot in this list, and accounts for 3.6% of the fund’s total equity portfolio.

On the opposite, the largest hedge fund shareholder at SBA Communications Corporation (NASDAQ:SBAC), Stephen Mandel’s Lone Pine Capital, last declared having upped its wage in the company by 64%, to 8.94 million shares, even though the company’s valuation does not look attractive, and its debt levels, quite concerning (debt-to-equity ratio reaches 16.1x, versus an industry mean of approximately 0.7x).

Another company that felt Rail-Splitter’s bullishness is PAREXEL International Corporation (NASDAQ:PRXL), $3 billion market cap biopharmaceutical company that is –also- amongst Ken Fisher’s Fisher Asset Management’s top small-cap stock picks for Q1. Although the fund trimmed its exposure by 2% over the last reported quarter, it still is the largest hedge fund stockholder at PAREXEL International Corporation (NASDAQ:PRXL), with 2.53 million shares, worth more than $137 million.

PAREXEL International Corporation (NASDAQ:PRXL)’s stock is up more than 18%, year-to-date, and analysts expect it to continue to rise up to, approximately, $60 per share (up from the current $53.45). Chuck Royce also seems to be bettin on this company, holding 455,000 shares, same as Jim Simons, who last declared possession of 645,300 shares.

Last is SanDisk Corporation (NASDAQ:SNDK), the only stock that was in last quarter’s list as well. This $23.8 billion market cap data storage solutions designer, developer and manufacturer saw Rail-Splitter sell 42,400 shares (or almost 1/3 of its holdings) over Q2. The fund now owns 98,250 shares of SanDisk Corporation (NASDAQ:SNDK), worth more than $10 million.

Rob Citrone’s Discovery Capital Management also cut its exposure to the company over Q1, but is still the largest hedge fund shareholder, with 7.95 million shares. SanDisk Corporation (NASDAQ:SNDK) has seen its stock appreciate by almost 50% year-to-date, so one can understand why, in spite of the bullish sentiment prevailing amongst analysts and hedge funds, some of the company’s biggest investors are selling the stock, seeking to capitalize this marked increase.

Disclosure: Javier Hasse holds no position in any stocks or funds mentioned

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 Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

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!