Bernard Selz’s Top New Picks For Q3

Bernard Selz’s hedge fund Selz Capital is a New York-based fund which offers investment advisory services regarding the security portfolios of individuals, as well as small businesses. At the end of the second quarter of 2015, Selz Capital had a diversified portfolio, with 22% of its total value invested in the consumer discretionary sector, 21% in transports, 17% in energy, 13% in healthcare, and 11% in finance. There were 70 total positions held by the fund, and its public equity portfolio was valued at $554.04 million at the end of the second quarter. During the quarter, Selz Capital made a few investments in new positions, nine total, and we’ll take a look at the top three of those stocks in this article. They are Allergan PLC (NYSE:AGN), Spirit Airlines Incorporated (NASDAQ:SAVE), and Medallion Financial Corp (NASDAQ:TAXI).

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Professional investors like Selz spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 139% and beaten the market by more than 80 percentage points since the end of August 2012 (see the details).

Bernard Selz
Bernard Selz
Selz Capital

The fund acquired a new position in Allergan PLC (NYSE:AGN), purchasing 134,000 shares with a value of $40.6 million at the end of the second quarter. This formed 7.34% of the fund’s total portfolio holdings and vaulted Allergan into the second spot int he fund’s portfolio. Allergan PLC (NYSE:AGN) is a multi-specialty healthcare company focused on developing and commercializing innovative pharmaceuticals, biologics, medical devices, and over-the-counter products. It has a market capitalization of $124.5 billion, with a reported profit of $4.23 billion for the quarter ending 31 March, 2015. Recently, Allergan said it would buy Kythera Biopharmaceuticals Inc (NASDAQ:KYTH) in a cash-and-stock deal valued at about $2.1 billion, to expand its line of cosmetic treatments. The company said it expects the deal to begin adding to its earning per share after 2016. Andreas Halvorsen‘s Viking Global had the largest position in Allergan among the funds we track as of March 31, holding over 6.10 million shares.