Willem Mesdag’s Red Mountain Capital disclosed its equity portfolio as of December 31st in its latest 13F filing. According to the filing submitted with the U.S. Securities and Exchange Commission, the investment firm’s top three stock picks last quarter were Air Transport Services Group Inc. (NASDAQ:ATSG), Popeyes Louisiana Kitchen Inc (NASDAQ:PLKI), and Marlin Business Services Corp. (NASDAQ:MRLN).
Red Mountain Capital was founded by Willem Mesdag, who had served as an investment banker at Goldman Sachs for 21 years, before retiring and launching his own hedge fund. The firm invests in publicly-traded small cap stocks, and seeks to engage with management and boards of directors in order to increase shareholder value. Red Mountain makes long-term investments and its partners serve on the boards of several of the companies it holds a stake in. According to Mr. Mesdag, his hedge fund operates like an investment banker, contributing capital to small firms displaying great business models. Red Mountain’s currently boasts an equity portfolio valued at around $410 million, up from $300 million at the end of the third quarter. As of the end of 2014, the hedge fund’s equity portfolio was comprised of 14 stocks from different sectors, ranging from finance to transports.
Red Mountain Capital’s top pick last quarter was Air Transport Services Group Inc. (NASDAQ:ATSG), where it held a position of 11.15 million shares. The holding, which was valued at around $95.5 million, represented 23.27% of the hedge fund’s equity portfolio. Mr. Mesdag’s firm has been backing the company since 2006, when it acquired an initial stake of 3.66 million shares. Once the company recovered from the crash in 2008, share prices began to gradually climb. Over the past five years, the stock has gained around 255% and year-to-date, shares have already appreciated by around 5.5%.
Air Transport Services Group Inc. (NASDAQ:ATSG) is a provider of airline operations, aircraft leasing and maintenance, and other services for the cargo transportation and package delivery industries. As the largest shareholder among institutional investors, Red Mountain Capital has maintained a bullish stance towards the company, which is backed by several other hedge funds. Amongst those betting on the stock is Phil Frohlich’s Prescott Group Capital Management, which holds a position of 6.22 million shares. Gregg J. Powers’ Private Capital Management is also optimistic, holding 1.82 million shares of common stock. These investors are surely excited about the company’s upcoming financial results, as Air Transport Services Group Inc. (NASDAQ:ATSG) has seen favorable earnings estimate revision activity in the past month.