Napier Park Global Capital is an asset management team founded by Jim O’Brien and Jonathan Dorfman that has around $5.7 billion in assets under management. The fund employs a variety of investment strategies such as event-driven, mortgage, distressed debt and corporate credit, among others. The fund has an equity portfolio worth close to $239.8 million, which is primarily focused on the Services sector, although it also contains positions from various other sectors and industries such as Technology and Healthcare. In this article we will discuss Napier’s top three largest stakes in terms of value, which the fund reported in its latest 13F filing for the second quarter. The positions are represented by Ally Financial Inc (NYSE:ALLY), Lions Gate Entertainment Corp. (USA) (NYSE:LGF), and Micron Technology, Inc. (NASDAQ:MU).
In Ally Financial Inc (NYSE:ALLY), Napier Park Global Capital has initiated a stake during the second quarter, reporting ownership of some 834,900 shares of the company, worth $19.96 million, the stake amassing some 8.30% of the fund’s total equity portfolio. Ally Financial is an $11 billion market cap financial company that operates a direct bank. The stock of Ally Financial Inc (NYSE:ALLY) remained basically flat since the beginning of the year, edging down by 0.7% year-to-date. The company has recently released two new mobile apps for Android and Kindle Fire tablets, to expand the availability of its products and services to its customers. For the second quarter of the year, Ally Financial Inc (NYSE:ALLY) reported a net income of $323 million, which represents a significant improvement from a loss of $927 million for the same period of last year.
Aside from Napier, another investor bullish on Ally Financial is Dan Loeb’s Third Point, which also initiated a stake during the third quarter and reported ownership of 45.60 million shares, worth around $1.1 billion, the stake amassing over 13% of Third Point’s portfolio, and being the second-largest in terms of value.
On the second spot is Lions Gate Entertainment Corp. (USA) (NYSE:LGF), in which Napier reported ownership of approximately 387,500 shares, valued at $11.1 million, the position being decreased by 65% on the quarter. Another investor of the company is Mark Rachesky‘s MHR Fund Management, which owns 51.26 million shares of Lions Gate Entertainment Corp. (USA) (NYSE:LGF) as of the end of June, the $1.47 billion position amassing over 50% of MHR’s equity portfolio. The company has raised its dividend earlier this month, setting it at $0.07, from $0.05, which gives it a yield of 0.83. Moreover, the stock of Lions Gate Entertainment Corp. (USA) (NYSE:LGF) trails a P/E of 27.70, which is above the average for the movie production industry of 19.40.
Napier Park Global has also reduced its stake in Micron Technology, Inc. (NASDAQ:MU) by some 376,800 shares to 330,200 shares held as of the end of June. The value of the stake amounts to $10.88 million, which represents approximately 4.5% of the fund’s total equity portfolio. Micron Technology, Inc. (NASDAQ:MU) is one of the leaders in the semiconductors industry, being also one of the top companies in terms of market capitalization, having a market cap of $34.6 billion. Micron Technology, Inc. (NASDAQ:MU)’s also trails a P/E of 10.40, which is below the industry average of around 16.00. The stock of the company surged by 49% year-to-date, on the back of release of new products and solid financial performance for the first two quarters of the year. Another shareholder of Micron Technology, Inc. (NASDAQ:MU) is Seth Klarman‘s Baupost Group, which owns 51.66 million shares of the company as of the end of June.
Ally Financial Inc (NYSE:ALLY)