In a recently submitted filing with the Securities and Exchange Commission (SEC), Brett Barakett‘s Tremblant Capital revealed that it has increased its stake in Tile Shop Hldgs, Inc. (NASDAQ:TTS) by 40% from the end of June. Following the transaction, the fund now owns nearly 6 million shares or 11.69% of the company’s outstanding common stock.
Tremblant Capital Group is a New York-based long/short equity hedge fund founded by Brett Barakett in 2001. Mr. Barakett holds an Honors Degree in Business Administration from University of Western Ontario, Ivey School of Business and an MBA from Harvard Business School. Prior to founding Tremblant Capital, Mr. Barakett worked as Consumer and Retail Sector Portfolio Manager at Moore Capital Management, LP. Although Tremblant Capital Group maintains a fairly diversified portfolio, a large part of its capital is usually allocated to stocks from the consumer discretionary sector. In February, the fund partnered with Morgan Stanley to launch the MS Tremblant Long/Short Equity UCITS Fund. At the end of June, the top 10 holdings of Tremblant Capital Group accounted for 51.82% of its equity portfolio, which was worth over $1.78 billion.
We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about 6 basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 60 percentage points (118% return vs. S&P 500’s 57.6% gain) over the last 36 months (see the details here).
Founded 30 years ago, Minnesota-based Tile Shop Hldgs, Inc. (NASDAQ:TTS) is a specialty retailer of tiles and other ceramic products. The company currently operates 110 stores across 31 states in the U.S. and boasts a portfolio of almost 4,000 products. Apart from operating brick-and-mortar stores, Tile Shop Hldgs, Inc. (NASDAQ:TTS) also retails its products through its website tileshop.com. The company made its debut stock market debut nearly three years ago after merging with private equity firm J.W. Childs-backed JWC Acquisition Corp. Although its shares still trade near the same price at which they made their debut, on a year-to-date basis they are trading up by 44.73%. Apart from Tremblant Capital, Charles Paquelet‘s Skylands Capital and George Mccabe‘s Portolan Capital Management were two of the largest shareholders of Tile Shop Hldgs, Inc. (NASDAQ:TTS) among the funds tracked by us, owning 958,725 shares and 618,030 shares of the company at the end of June respectively.