Hedge fund powerhouse Avenue Capital Group was founded by Marc Lasry and Sonia Gardner in 1995. The investment firm primarily focuses its investing strategy on distressed debt and undervalued securities of companies across a variety of industries. Avenue Capital has approximately $13.9 billion in assets under management as of July 31, but it has recently been raising new money for an energy-oriented portfolio, Avenue Energy Opportunities Fund LP. The firm is among several other hedge funds that is seeking for investment opportunities in the energy sector, convinced that there are some strong and healthy companies that have been oversold as a result of the sharp drop in oil prices. As stated by the fund’s most recent 13F filing with the SEC, Avenue Capital Group manages a public equity portfolio worth $918.05 million as of June 30. In the following article we’ll be discussing Marc Lasry’s top stock picks in the second quarter, which incidentally includes a new energy bet. The top three holdings of Lasry include: Houghton Mifflin Harcourt Company (NASDAQ:HMHC), Gener8 Maritime Inc. (NYSE:GNRT), and Meritor Inc. (NYSE:MTOR).
We don’t just track the latest moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? Since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market every year, returning 118%, over two times greater returns than the S&P 500 during the same period (see more details).
Although Lasry sold 1.0 million shares of his 5.74 million-share stake in Houghton Mifflin Harcourt Company (NASDAQ:HMHC), the stock still represents his most valuable holding, worth $119.40 million as of June 30. The shares of the global provider of solutions for educational institutions and other consumers have gained nearly 15% since the beginning of the year. Houghton Mifflin Harcourt recently announced the acquisition of select eBook and technology assets of MeeGenius, which is an eBook subscription service for young children. This investment in high-quality digital content reinforces the company’s strategic focus on the direct-to-consumer market. Meanwhile, the global learning company has also posted its financial results for the second quarter of 2015 recently, reporting net sales of $380 million, down by 5% year-over-year. At the same time, the company posted a net loss of $8 million for the quarter, compared to a net income of $12 million reported a year ago. Paulson & Co, founded by John Paulson, is among the largest shareholders of Houghton Mifflin Harcourt Company (NASDAQ:HMHC), holding an ownership stake of 12.23 million shares as of June 30.