Zebra Capital Management is Fond of These Financial Stocks

Zebra Capital Management is an independent investment management firm, headquartered in Milford, Connecticut, managing equity-focused investment strategies. It was founded in 2001 by Roger Ibbotson, Professor in the Practice Emeritus of Finance at Yale’s School of Management. The fund uses liquidity, valuation and growth ratios to identify manifestations of “popularity,” in order to find stocks that are less popular, but nonetheless have strong fundamental characteristics. Its equity portfolio, valued at roughly $239.32 million, is quite diversified, although services and financial stocks predominate.

Over the quarter, Zebra Capital started 73 new equity positions, increased its exposure to around 140 of its preexisting holdings, and sold out 40 positions. In this article I will take a look at some of the fund’s most noteworthy moves for Q1.

Credit Acceptance Corp. (NASDAQ:CACC)

The first case I would like to refer to is that of Credit Acceptance Corp. (NASDAQ:CACC), a $2.9 billion market cap financing company that offers automobile dealers financing programs that enable them to sell vehicles to consumers regardless of their credit history. This used to be Zebra’s 10th most valuable holding; however, during the first three months, Mr. Ibbotson almost doubled its stakes in the company. The fund now owns 36,038 shares of the company, worth more than $5 million. This makes it the fund’s most valuable equity position for the end of the first quarter.

Other funds with even larger bets on this stock are William Von Mueffling’s Cantillon Capital Management, which owns 457,420 shares ($65 million in stock), and Jim Simons’ Renaissance Technologies, with 327,600 shares.

ACE Limited (NYSE:ACE) was the most valuable holding in Zebra’s portfolio by the end of 2013. However, it was displaced to the second-runner position during the first fiscal quarter of 2014. This $34 billion market cap Swiss-incorporated insurance and reinsurance organization saw Mr. Ibbotson’s fund decrease its stake by 6% in the first quarter, to 39,527, valued slightly under $4 million.

Once again, Zebra’s bet becomes quite insignificant when compared with those of Brian Ashford-Russell and Tim Woolley (Polar Capital), and David Harding (Winton Capital Management). Both these funds increased their exposure to this company over Q1, and now own 936,588 shares and 789,203 shares, respectively. These holdings are valued at roughly $92 million and $78 million.

Finally, I would like to take a look into one more bullish move. Between Jan. 1 and March 31, 2014, Zebra Capital more than doubled its stake in Enstar Group Ltd. (NASDAQ:ESGR), a $2.62 billion market cap company that acquires and manages insurance and reinsurance companies in run-off and portfolios of insurance and reinsurance business in run-off, and providing management, consulting and other services to the insurance and reinsurance industry. The fund now holds 24,384 shares, worth more than $3.3 million. This makes it the third largest shareholder among hedge funds tracked by us, only trailing Charles Akre’s Akre Capital Management, which owns 498,626 shares ($67 million in stock), and Ric Dillon’s Diamond Hill Capital that holds 196,504 shares ($26 million). All three of them (Akre, Dillon and Ibbotson) raised their stakes in this company over Q1.

Disclosure: Javier Hasse holds no position in any stocks mentioned

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!