David Keidan-led Buckingham Capital Management recently submitted its 13F filing with the SEC for the reporting period of June 30, revealing a U.S. equity portfolio with holdings valued at $823.4 million. The New York-based fund was founded in 1985 and currently manages over $1.2 billion in assets spread over two strategies: a broad one that covers most sectors and one focused strictly on stocks from the retail, apparel, and footwear spaces.
According to Buckingham’s latest filing, its U.S. equity portfolio was well diversified at the end of June, with 79 long positions and its top-ten holdings accounting for less than one-third of the value of the portfolio. However, the fund had very high exposure to the consumer discretionary sector, stocks from which amassed over two-thirds of its portfolio’s value. Considering the fund’s high exposure to the sector, in this article we’ll focus on its top-five holdings going into the third quarter, all of which belonged to stocks from the consumer discretionary space.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
#5. Burlington Stores Inc (NYSE:BURL)
– Shares Owned by Buckingham Capital Management (as of June 30): 374,100
– Value of Holding (as of June 30): $24.96 Million
Burlington Stores Inc (NYSE:BURL) has been one of the best performing retailing stocks this year, having appreciated by almost 80%. During the second quarter, Buckingham Capital inched up its stake in the company by 2%. Since the company has been posting strong comps and financial numbers over the past several quarters, most analysts have a favorable view of it. However, a lot of analysts also think that due to the hefty rally it has seen this year, the stock might have become overvalued. For its second quarter results, which will be announced on August 25, analysts are expecting the company to report EPS of $0.30 on revenue of $1.24 billion. For the same quarter of the previous year, Burlington Stores Inc (NYSE:BURL) delivered EPS of $0.19 on revenue of $1.14 billion. On August 1, analysts at Goldman Sachs reiterated their ‘Buy’ rating and $84 price target on the stock. John Horseman‘s Horseman Capital Management also upped its holding in Burlington Stores during the second quarter, by 23% to 430,000 shares.
#4. Signet Jewelers Ltd. (NYSE:SIG)
– Shares Owned by Buckingham Capital Management (as of June 30): 305,687
– Value of Holding (as of June 30): $25.17 Million
Despite Buckingham Capital increasing its stake in Signet Jewelers Ltd. (NYSE:SIG) by 28% during the second quarter, the holding dropped from the top spot in the fund’s portfolio to the fourth spot owing to the sharp 33.5% drop in Signet’s stock during the quarter. A large part of the 23% decline that Signet Jewelers Ltd. (NYSE:SIG)’s stock has seen this year came after reports emerged alleging that the company was engaged in diamond-swapping practices. Though the company has tried numerous damage control measures over the past two months, including promotions and insiders buying the stock, its shares have failed to bounce back convincingly. Signet Jewelers Ltd. (NYSE:SIG) is also expected to report its second quarter results by the end of this month and the current consensus of analysts is for it to report EPS of $1.46 on revenue of $1.44 billion. In comparison, the company had reported EPS of $1.28 on revenue of $1.41 billion for the same quarter of last year. Gabriel Plotkin‘s Melvin Capital Management lowered its stake in Signet Jewelers by 25% to 600,000 shares during the second quarter.
We’ll check out Foot Locker and two other consumer stocks that Buckingham Capital loves on the next page.