Goodnow Investment Group was founded by Edward Goodnow. The fund’s equity portfolio is worth $422.13 million as of the end of September, down from $429.40 million a quarter earlier, and is diversified across sectors. According to our calculations, the fund generated a third-quarter return of 10.77%, based on 21 long positions in companies worth over $1.0 billion.
Contrary to the actual returns of hedge funds which are taking it on the chin lately, long positions of the smart money always tend to beat the market. For instance, 95% of nearly 660 funds tracked by Insider Monkey collectively returned 8.3% in the third quarter from their long bets, dwarfing the S&P 500 ETF’s return of 3.3% for the period.
Having said that, let’s take a closer look at some of Goodnow’s top picks, particularly: Credit Acceptance Corp. (NASDAQ:CACC), Aircastle Limited (NYSE:AYR), Paypal Holdings Inc (NASDAQ:PYPL), and Commscope Holding Company Inc (NASDAQ:COMM).
Goodnow Investment Group had 217,261 shares of Credit Acceptance Corp. (NASDAQ:CACC) worth $43.69 million at the end of September. The investment was fruitful as the stock returned 8.6% in the third quarter. During the second quarter, the number of funds from our database long Credit Acceptance Corp declined by two to 21. Among these funds, he largest stake in Credit Acceptance Corp. (NASDAQ:CACC) was held by Abrams Bison Investments, which reported holding $210.6 million worth of stock as of the end of June. It was followed by BloombergSen with a $150.6 million position. Other investors bullish on the company included Cantillon Capital Management, Goodnow Investment Group, and Makaira Partners.
Goodnow inched up its stake in Aircastle Limited (NYSE:AYR) by 2% to 1.85 million shares valued at $36.72 million during the third quarter. Meanwhile, the stock appreciated by 2.7% during the same period. Heading into the third quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, up by 75% from the previous quarter. Ric Dillon’s Diamond Hill Capital has the number one position in Aircastle Limited (NYSE:AYR), worth close to $54.7 million at the end of June. Other funds bullish on the company included John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Neil Chriss’s Hutchin Hill Capital.