Insider Monkey tracks nearly 750 elite hedge funds and use data from their filings to share industry trends and insights with its audience. We do this because history shows that hedge funds are great stock pickers, a fact which is often eclipsed by the hullabaloo of contracting returns, losses from short positions and insider trading scandals. Our data for hedge funds’ third-quarter returns backs this up, as among the funds in our database with at least 5 long positions in billion-dollar companies on June 30, we calculated the returns of their qualifying long positions at 8.3% for the quarter. Meanwhile, the Barclay Hedge Fund Index has hedge funds’ actual returns for the third-quarter at less than 4%, though it should be noted that the Barclay’s Index tracks the performance of thousands of funds, while we focus solely on the cream of the hedge fund crop. Thus, in this article we’ll take a look at four of the long positions held by MSDC Management on June 30, which are Cedar Fair, L.P. (NYSE:FUN), SS and C Technologies Holdings Inc (NASDAQ:SSNC), Coty Inc (NYSE:COTY), and Tribune Media Co (NYSE:TRCO).
MSDC Management is a privately-owned investment fund that is based in New York. The firm is managed by Marc Lisker, Glenn Fuhrman and John Phelan, and is the family office for Michael Dell of Dell Inc., which it helped to take private in 2013. The fund oversees $1.24 billion in managed 13F securities as of September 30. In the third quarter, MSDC’s stock picks returned 12.42% when looking at its 36 long positions in non-microcap companies. With that in mind, let’s take a look at four stocks which the fund is bullish on.
MSDC Management cut its stake in Cedar Fair, L.P. (NYSE:FUN) by 35% in the third quarter, moving into the current quarter with a total of 1.83 million shares of the company, which had a net worth of about $105.16 million. The stock returned 0.5% during the third quarter. Cedar Fair, L.P. (NYSE:FUN) investors should pay attention to an increase in hedge fund interest in recent months. FUN was in 10 hedge funds’ portfolios at the end of the second quarter of 2016, up from just 6 hedge funds in our database with FUN holdings at the end of the previous quarter. MSDC Management was the largest shareholder of Cedar Fair, L.P. (NYSE:FUN) among those funds, followed by Trafelet Capital, which amassed a stake valued at $13.9 million. Osterweis Capital Management, Renaissance Technologies, and Land & Buildings Investment Management also held valuable positions in the company.
MSDC Management reduced its holding in SS and C Technologies Holdings Inc (NASDAQ:SSNC) in the third quarter by 8%, ending the period with over 3.34 million shares of the company which had a total value of about $107.48 million. The stock returned 14.7% during the third quarter. SS and C Technologies Holdings Inc (NASDAQ:SSNC) was in 31 hedge funds’ portfolios at the end of the second quarter of 2016. Valinor Management LLC was the largest shareholder of SS and C Technologies Holdings Inc (NASDAQ:SSNC) among them, with a stake worth $145.1 million reported as of the end of June. Trailing Valinor Management LLC was Farallon Capital, which amassed a stake valued at $139.6 million. Southpoint Capital Advisors and Alkeon Capital Management also held valuable positions in the company.
We’ll check out two more of the fund’s stock picks on the next page.
MSDC reported ownership of 2.68 million shares of Coty Inc (NYSE:COTY) as of the end of the third quarter, unchanged quarter-over-quarter. The net worth of the stake was about $62.88 million at the end of September. The stock lost 8.7% during the third quarter, ranking as one of the fund’s few losers. At Q2’s end, a total of 13 of the hedge funds in our system held long positions in Coty, a plunge of 41% from the first quarter of 2016, which was a huge warning sign. Shares have lost over 25% of their value since the end of that quarter in which hedge funds bailed on the stock, which is why monitoring aggregate hedge fund activity can provide great insight. Balyasny Asset Management, Thunderbird Partners, and Citadel Investment Group were some of the funds that stuck with the stock, owning shares of it as of the end of June.
MSDC Management made no change to its position in Tribune Media Co (NYSE:TRCO) in the third quarter, heading into the fourth quarter with a $32.52 million stake in the company, which consisted of 829,994 shares. The stock also had a rough third quarter, losing 6.2% of its value. Tribune Media Co (NYSE:TRCO) was in 23 hedge funds’ portfolios at the end of the second quarter of 2016 among those we track, down by 4% from a quarter earlier. According to Insider Monkey’s hedge fund database, Howard Marks’ Oaktree Capital Management has the largest position in Tribune Media Co (NYSE:TRCO), worth close to $555.5 million, comprising 10% of its total 13F portfolio. Coming in second is Angelo Gordon & Co, managed by John M. Angelo and Michael L. Gordon, which holds a $248.7 million position. Other peers with similar optimism contain Mason Hawkins’ Southeastern Asset Management, Leon Cooperman’s Omega Advisors, and Steven Tananbaum’s GoldenTree Asset Management.