Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Communications Sales & Leasing Inc (CSAL), OneMain Holdings Inc (OMF): Toscafund’s Q3 Winners Turn Traitor in Q4

Toscafund Asset Management is a London-based hedge fund founded in 2000 by Martin Hughes. Toscafund’s equity portfolio was valued at $43.49 million at the end of the second quarter. In the third quarter, the fund’s stakes in 7 companies whose market value was $1 billion or more returned an impressive 18.69%. While these returns are different from the actual returns posted by the fund, which include all of its positions, long and short, these returns calculated for Toscafund’s long positions show that the fund’s performance beat the market.

This strategy of calculating returns based on non-volatile stocks (micro-cap stocks) helps us focus on those hedge funds who have either timed the market well or whose picks are finally getting some of the recognition that they deserved. Toscafund is one of those hedge funds. In this article we’ll analyze its biggest bets which paid off in the third quarter, which were Communications Sales & Leasing Inc (NASDAQ:CSAL), OneMain Holdings Inc (NYSE:OMF), Cornerstone OnDemand, Inc. (NASDAQ:CSOD), and First Data Corp (NYSE:FDC).

Toscafund reported ownership of 2.3 million shares of Communications Sales & Leasing Inc (NASDAQ:CSAL), 46% less than the fund’s position in the company a quarter earlier. The aggregate value of Toscafund’s stake in the company stood at about $65.1 million on June 30. The stock returned 10.7% during the third quarter, but has given up those gains during the fourth quarter.

REIT Stocks Northstar Realty Finance NRF

g0d4ather /

At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 60% jump from one quarter earlier, as hedge funds timed their move into the equity well. More specifically, Citadel Investment Group was the largest shareholder of Communications Sales & Leasing Inc (NASDAQ:CSAL), with a stake worth $91.3 million reported as of the end of June. Trailing Citadel Investment Group was Zimmer Partners, which amassed a stake valued at $73.7 million. Renaissance Technologies also held a valuable position in the company.

Follow Uniti Group Inc. (NASDAQ:UNIT)
Trade (NASDAQ:UNIT) Now!


Toscafund had over 2.22 million shares of OneMain Holdings Inc (NYSE:OMF) in its portfolio at the end of the June quarter, valued at about $50.4 million. The stock was the best performer of the stocks listed in this article, returning 35.6% during the third quarter. However, shares tanked earlier this month, all the way down to 52-week-lows after it drastically cut its FY 2016 and FY2017 EPS guidance, which lead to several analysts slashing their ratings and price targets on the stock.

The company was in 20 hedge funds’ portfolios at the end of June down from 23 hedge funds in our database with OMF positions at the end of the previous quarter. Among these funds, Omega Advisors held the most valuable stake in OneMain Holdings Inc (NYSE:OMF), which was worth $73.5 million at the end of the second quarter. Moreover, Tricadia Capital Management, Key Colony Management, and Basswood Capital were also bullish on OneMain Holdings Inc (NYSE:OMF).

Follow Onemain Holdings Inc. (NYSE:OMF)
Trade (NYSE:OMF) Now!

We’ll check out two more of the fund’s stock picks on the next page.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.