Breton Hill, a Toronto-based macro-focused alternative asset management firm focused on liquid market strategies, was established by Ray Carroll in 2011 with $100 million in seed capital from various investors. Prior to founding Breton Hill, Carroll was the CIO for the Mosaic division at Diversified Global Asset Management (DGAM), a multi-billion dollar Canadian asset management firm. Carroll has guided his fund wisely over the years, as the latest 13F filing shows that Breton Hill’s total U.S. equity portfolio was worth slightly over $227 million. Let’s take a closer look at Carroll’s favorite positions.
First, a little about ourselves. We at Insider Monkey monitor the smart money. We pay attention to elite funds’ moves because our research has shown that elite funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
#4 Philip Morris International Inc. (NYSE:PM)
Shares held (as of September 30): 78,248
Total Value (as of September 30): $6.2 million
Percent of Portfolio (as of September 30): 2.72%
Who says sin doesn’t pay? The strong dollar may be having a negative effect on Philip Morris International Inc. (NYSE:PM)’s international sales, but shares have still returned 12.7% year to date and also pay an attractive 4.61% dividend yield too. Not bad for a cigarette stock many investors wrote off in the 90’s. Demand for tobacco is inelastic and Philip Morris will make money in good times and bad. Andy Brown‘s Cedar Rock Capital owns 12.46 million shares.
#3 Altria Group Inc (NYSE:MO)
Shares held (as of September 30): 124,641
Total Value (as of September 30): $6.78 million
Percent of Portfolio (as of September 30): 2.97%
As well as Philip Morris International has done, Altria Group Inc (NYSE:MO) has done even better. Altria Group Inc (NYSE:MO) shares are up an astounding 24.94% year to date, as earnings per share has met or beaten analyst expectations for four straight quarters. Given that Altria owns around 27% of the recently sold SABMiller, management could use the extra money garnered to deleverage, pay a special dividend, or buy back some stock (if the deal goes through). We’re fans of the company given the attractive 3.79% dividend yield. Tom Russo‘s Gardner Russo & Gardner owns 6.5 million shares.
#2 Ford Motor Company (NYSE:F)
Shares held (as of September 30): 563,377
Total Value (as of September 30): $4.65 million
Percent of Portfolio (as of September 30): 3.35%
Ford Motor Company (NYSE:F) shares are up 2% year to date as the U.S. economy picks up steam. Ford Motor Company (NYSE:F), which makes about 50% as many vehicles in China as GM does, isn’t retreating from China, as it recently announced it will invest up to $1.5 billion to increase market share in the country. If China’s economy recovers, Ford will reap big benefits. Ford could also benefit from Volkswagen’s recent recall troubles as well. Shares pay a 3.9% dividend yield. Richard S. Pzena‘s Pzena Investment Management owns 17.72 million shares.
# 1 General Motors Company (NYSE:GM)
Shares held (as of September 30): 295,995
Total Value (as of September 30): $ 8.89 million
Percent of Portfolio (as of September 30): 3.9%
General Motors Company (NYSE:GM) stock is roughly flat year to date as the company has largely moved on from its vehicle recalls and the U.S. economy remains strong. Given General Motors Company (NYSE:GM)’s forward PE of 6.38 and dividend yield of 4.33%, GM shares will be a great buy if China’s economy can pull through and vehicle sales don’t plummet. General Motors is no longer hobbled by legacy costs and pensions but the market doesn’t give the company as much respect as it gives Elon Musk’s Tesla. The market could be on to something, as General Motors needs to get better at the self driving and electric vehicle game to guarantee its future. Still, many smart money investors have faith in General Motors, including Warren Buffett‘s Berkshire Hathaway, which owns 41 million shares, and David Tepper’s Appaloosa Management, which owns 18.79 million shares.