Cyrus Capital Partners is a New York-based hedge fund founded and managed by Stephen C. Freidheim, who used to work as the Senior Managing Member at Och-Ziff Freidheim (OZF Capital). The fund recently disclosed its equity portfolio for the second quarter of 2014, worth more than $1 billion, with a focus on transports stocks (38% of its total equity portfolio). In this article we will take a look into its top positions in order to elucidate if any of them deserve further research. The companies involved are: American International Group Inc (NYSE:AIG), JetBlue Airways Corporation (NASDAQ:JBLU) and American Airlines Group Inc (NASDAQ:AAL).
The fund’s largest bet was placed on American International Group Inc (NYSE:AIG), a $78.6 billion market cap insurance company. The position remained unchanged over the period; Cyrus Capital owns 2.5 million shares of Common Stock, worth more than $136 million, which account for roughly 13% of its equity portfolio’s total value. The largest hedge fund shareholder of the company, among those we track, Bruce Berkowitz’s Fairholme (Fairx), last disclosed ownership of more than $4.4 billion in stock – this position includes 69.8 million shares of the company.
During the second quarter, American International Group Inc (NYSE:AIG) replaced its CEO and President, Robert Benmosche, with Peter Hancock, who had directed the company’s property-casualty business since March 2011. A few days after this announcement, the company publicized a tender offer for as much as $1.5 billion of its bonds, in an attempt to cut debt and ameliorate its credit ratings.
JetBlue Airways Corporation (NASDAQ:JBLU) came in second. The $3.5 billion market cap, passenger airline company saw Cyrus Capital start a position with 12 million shares during the second quarter. The stake, worth roughly $130 million, accounts for about 12.4% of its total equity portfolio, and makes it the largest hedge fund shareholder, among those that we track, trailed by a few other major funds like Jim Simons’ Renaissance Technologies, which owns 3.22 million shares of the company’s Common Stock.
JetBlue Airways Corporation (NASDAQ:JBLU)’s stock has returned almost 44% year-to-date, and 28.8% over the second quarter. This growth was fueled by several positives, including various earnings estimates revisions, and the launch of its premium service, which is still prices lower than its competitors’, amongst others.
Last in this list is American Airlines Group Inc (NASDAQ:AAL), a $27.4 billion market cap airline operator. The fund disclosed ownership of 2.96 million shares of the company, which implies a 31% increase in its stake valued at more than $127 million. Several other funds have been also making a profit from the 52.8% upsurge that the stock has experienced since the beginning of the year. James Dinan’s York Capital Management, the largest hedge fund shareholder, among those that we track, last declared a 30% boost in its exposure, and now owns 18.4 million shares, worth more than $790 million.
American Airlines Group Inc (NASDAQ:AAL)’s high returns were drive by several elements, amongst which we can count higher profits, the announcement of dividend payouts and share buyback programs, and multiple earnings estimates revisions (both from the company and analysts).
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned.