At number four, and another new addition with 4,271 shares, is Core-Mark Holding Company, Inc. (NASDAQ:CORE). Core Mark sells fresh and broad-line supply products such as tobacco, candy, snacks, health and beauty products and beverages to the convenience and grocery store industry. Because of the factors that contribute to steady income growth within this sector, CORE enjoys bullish fundamentals including a trailing price/earnings ratio of 18x versus the industry average of 73.5x and a very low debt to equity ratio. The 4Q earnings report illustrated the financial strength of the company as well as its ability to keep costs low as a percentage of sales. As a result, the bottom line improved from $26.2 million to $33.9 million.
Finally, at number five, is LyondellBasell Industries NV (NYSE:LYB), a chemical company that turns liquid and gaseous hydrocarbon feedstock into plastic resins and other chemicals. LYB released 4Q earnings in which net income improved 32%. Lyondell also recently announced that it is spending up to $1 billion to expand their existing facilities (to capitalize on the drop in natural gas prices) that will help boost productivity and generate as much as $500-$600 million in annual pre-tax earnings. Currently at 3x book value, the stock is still priced very competitively to the rest of the petro-chemical sector.
Monarch Alternative Capital’s tactic to invest heavily in only a few stocks may seem like a very risky strategy, at least on the long-only equity side. If just one of these positions, say, for example, a company vulnerable like US Concrete, should take a hit on disappointing construction data, the return on the equity portfolio may suffer. Even American International Group Inc (NYSE:AIG), despite their much more conservative management, is not immune to the volatility in the financial markets. To see the entire Monarch Alternative Capital portfolio, check it out on Insider Monkey.
Disclosure: I do not own any of the stocks mentioned in this article.