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Urban Outfitters, Inc. (URBN): Apex Capital Was Right Betting On Retailer; See Fund’s Other Top Picks

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Urban Outfitters, Inc. (NASDAQ:URBN) is one of the stocks in the news today, being on of the top gaines in intraday trading. The stock jumped by over 11% on the back of strong financial results that the company reported today. Many investors have anticipated Urban Outfitters’ strong performance, but one of the funds that invested a considerable portion of its equity portfolio in the company is Sanford J. Colen‘s Apex Capital that owns 1.64 million shares of the company, the $57.48 million stake being the fourth-largest in the fund’s equity portfolio. Moreover, during the fourth quarter, the fund raised its stake in the company by 49%.

Urban Outfitters, Inc. (NASDAQ:URBN)

Urban Outfitters, Inc. (NASDAQ:URBN) is a specialty retailer that offers apparel and accessories under several brands such as Urban Outfitters, Anthropologie, Free People, Terrain and Bhldn. The company also has a wholesale division that designs and markets casual apparel for young women sold through department and specialty stores across the world. For the fourth quarter of fiscal 2015 (ended January, 2015), Urban Outfitters, Inc. (NASDAQ:URBN) posted record sales of $1.01 billion, up by 12% on the year, while the company’s earnings per diluted share went up to $0.60 from $0.59. For the full fiscal year, the company’s revenue also grew to $3.23 billion from $3.09 billion for the previous year, but EPS fell to $1.68 from $1.89. Therefore, with Urban Outfitters posting significant growth across all brands it owns, and taking into account the fact that the company’s sales have been growing for the last several years, the stock can grow even further.

As, it has been mentioned, some investors expected a strong performance from Urban Outfitters, Inc. (NASDAQ:URBN) and during the fourth quarter added the company to their equity portfolios or increased their positions. However, among the majority of funds that we track, the holdings in Urban Outfitters amass very small portions of the total equity portfolio value. For example, Steve Cohen‘s Point72 Asset Management and Alexander Mitchell’s Scopus Asset Management initiated stakes in the company, holding 1.40 million shares and 350,000 shares respectively, both positions accounting for around 0.30% of the equity portfolio value.

Let’s get back at Apex Capital, though. The fund has an equity portfolio valued at $1.43 billion, which is primarily iuvested in the services sector, the majority of top picks being services companies. The fund also has some exposure to technology and healthcare stocks. Mr. Colen can be considered an activist investor, since last year the investor disclosed entering into discussions with MicroStrategy Incorporated (NASDAQ:MSTR), regarding the company’s underperformance. The story has not developed much since then, although MicroStrategy’s stock gained around 25% over the last year, which is approximately the same period since Apex sent its letter.

At the end of 2014, the top three holdings in Apex’s 13F portfolio were represented by Netflix, Inc. (NASDAQ:NFLX)Michael Kors Holdings Ltd (NYSE:KORS), and MicroStrategy Incorporated (NASDAQ:MSTR).

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