Wilbur Ross’s Favorites Include Assured Guaranty Ltd. (AGO), EXCO Resources Inc (XCO) & More

WL Ross & Co. is a hedge fund managed by Wilbur Ross under the Invesco umbrella. With an AUM figure of almost $9 billion, WL Ross is focusing on distressed asset scenarios, a strategy that led him to swap toxic assets from U.S. banks in exchange for tax breaks, during the latest financial crisis. As part of our strategy, which involves tracking the activity of top-tier hedge funds, let’s take a look at Ross’s favorite stock picks from his latest 13F filing.

As follows, in first place is Assured Guaranty Ltd. (NYSE:AGO), in which the hedge fund holds over 19.8 million shares, valued at $408.8 million, up from the previous value $282.3 million, reported at the end of 2012. Assured Guaranty Ltd. (NYSE:AGO) has returned over 53% since January and sports a P/E of 8.8x.

The next position is held by EXCO Resources Inc (NYSE:XCO), in which WL Ross disclosed a $224.6 million stake, which contains more than 31.5 million shares, an unchanged amount since the end of last year. In addition to WL Ross, we can mention Fairfax Financial Holdings (managed by Prem Watsa) and AQR Capital Management (Cliff Asness) as well as another 25 elite hedge funds that held shares of EXCO Resources Inc (NYSE:XCO) during the first three months of 2013.

We should also mention BankUnited (NYSE:BKU), represented in the 13F portfolio of Wilbur Ross’s hedge fund by 8.2 million shares, worth $209.8 million. According to the two latest 13F filings, the stake in BankUnited (NYSE:BKU) represents a new equity in the 13F portfolio of WL Ross. The stock of BankUnited (NYSE:BKU) has a year-to-date return above 23%, trading at 14.5 times trailing twelve-month earnings.

The fourth-largest stake in the equity portfolio of WL Ross represents 11.5 million shares of Cascade Bancorp (NASDAQ:CACB). The value of the stake amounts to $77.5 million, slightly up from $71.8 million reported at the end of the last quarter of 2013.

See which bank is in fifth place:

Last is a $72.6 million stake in Sun Bancorp, Inc. /NJ (NASDAQ:SNBC), which contains about 21.3 million shares. It is another new position in the equity portfolio of WL Ross & Co. Shares of Sun Bancorp, Inc. /NJ (NASDAQ:SNBC) are down almost 7% since the start of 2013.

On the whole, the equity portfolio of Wilbur Ross and WL Ross & Co. involves five companies and has a value of over $993.3 million. While focusing on distressed assets is a working strategy for Wilbur Ross, there are some other more common strategies used by hedge fund managers, as seen in this recent list of the best hedge fund strategies.

Aside from WL Ross & Co. you should take a look at the top picks of some other hedge funds we track. Ancient Art (Teton Capital), managed by Quincy Lee, Jeffrey Altman’s Owl Creek, and Philippe Jabre’s Jabre Capital are all good starting points.

Disclosure: none