Richard Mashaal‘s RIMA Senvest Management recently disclosed increasing its passive positions in Era Group Inc (NYSE:ERA) and Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY). According to two new filings with the Securities and Exchange Commission, the investor owns 1.05 million shares of Era Group, which represent 5.13% of the company’s outstanding stock, and 25.55 million shares of Cresud (represented by 2.55 million ADSs), equal to 5.18% of that company’s common stock. In its latest 13F filing, RIMA reported holding around 866,000 shares of Era Group and 2.20 million sponsored ADRs of Cresud.
In Era Group Inc (NYSE:ERA), RIMA Senvest initiated a stake during the first quarter of 2013, the same period when the company went public. The investor then proceeded to raise its stake in the company from the initially-held 196,500 shares, while the stock grew by 18% since its IPO. The latest acquisition of shares comes in line with several insiders reporting exercising their options to buy stock and selling parts of their holdings. One of them is Christopher Scott Bradshaw, the CEO, CFO, President and Director of Era Group Inc (NYSE:ERA), who at the end of last week exercised his options to acquire 25,000 shares and sold 3,624 shares at $20.97, holding 73,556 shares after the sale. Another shareholder of Era Group Inc (NYSE:ERA) is Chuck Royce’s Royce & Associates, which during the fourth quarter inched down its stake in the helicopter operations company by 7% to 902,200 shares.
Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY) is a $1.0 billion Argentinian producer of agricultural commodities. The stock gained over 61% in the last 52 weeks, but since the fund initiated a stake with 57,600 shares during the first quarter of 2010, the share price has inched up by just 6.0%. Nevertheless, the company’s stock significantly outperformed the farm products industry, which gained 23% over the last three years. Among the funds that we track, RIMA Senvest is the largest shareholder of Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY), followed by Murray Stahl’s Horizon Asset Management, which owned 1.02 million shares, according to its latest 13F filing.
RIMA Senvest is a particularly interesting fund to track, even though its equity portfolio is relatively small and stands at around $1.40 billion as of the end of 2014. What’s interesting about the fund is that its managers Richard Mashaal and Brian Gonick have set a very ambitious hurdle rate for their investments. According to a report by Bloomberg, Messrs. Mashaal and Gonick consider that the stocks they buy should have the potential to double or triple in value between one and three years. According to the same source, RIMA Senvest has often succeeded in its goal, with seven of its 20 largest positions gaining over 100 percent in 2013 and the fund posting a return of 79.4% for that year. Moreover, in the 17 years since its inception through December 2013, the fund had average returns of over 20% per year, including surges of some 230% in 2009, 169% in 2003, and a drop of 54% in 2008.
It’s not surprising that RIMA manages to post such impressive returns, since the fund focuses on small-cap stocks. These companies are usually underpriced and have a considerable intrinsic value that can be discovered over the years and send the stock higher. RIMA’s strategy is also aligned with the one that we have developed at Insider Monkey, which is also focused on small-cap stocks. Our strategy returned 132% between August 2012 and March 2015, beating the market by more than 70 percentage points.
RIMA Senvest’s latest 13F also showed that the fund initiated 11 new long positions during the fourth quarter, three of which account for more than 1% of its equity portfolio. The largest new position is represented by Fiat Chrysler Automobiles NV (NYSE:FCAU), a $20.91 billion auto manufacturer, in which the investor disclosed a $53.02 million stake that contained 4.58 million shares. Massive safety recalls that affected giant auto companies such as GM and Ford also affected Fiat Chrysler Automobiles NV (NYSE:FCAU), which earlier this month announced the recall of some 702,600 SUVs, including the Dodge Journey and Dodge Grand Caravan and the Chrysler Town and Country minivans. The recalls are being made to fix defective ignition switches that can turn off the engine unexpectedly. Nevertheless, the stock of the company is up by 47% over the last 52 weeks as the company enjoyed strong sales during the past year. Cliff Asness‘ AQR Capital Management is another shareholder of Fiat Chrysler Automobiles NV (NYSE:FCAU), which owned 6.92 million shares as of the end of 2014.
RIMA also initiated a stake in Google Inc (NASDAQ:GOOG) during the fourth quarter, disclosing ownership of 61,500 shares, valued at $32.37 million. Google Inc (NASDAQ:GOOG)’s class C shares have enjoyed a strong run since the beginning of the year, gaining over 8%, but since the end of March 2014, when they started trading, shares are actually almost flat amid high volatility. Earlier today, Google Inc (NASDAQ:GOOG) announced that it hired Ruth Porat, the current CFO of Morgan Stanley, to succeed Patrick Pichette as its new CFO in May. Among the funds that we track, both the company’s class A and class C stocks have seen a decrease in popularity during the fourth quarter. For Google’s class C stock, the number of funds holding long positions declined to 105, from 113, while the amount of capital held by these funds fell to $5.68 billion from $6.11 billion. Aside from RIMA Senvest, another shareholder of Google Inc (NASDAQ:GOOG) is Boykin Curry’s Eagle Capital Management, which held 1.12 million shares.
Finally, the third largest position in RIMA Senvest’s equity portfolio is represented by Digimarc Corp (NASDAQ:DMRC), a microcap developer of solutions, licenser of intellectual property, and provider of development services to global business partners. The stock is down by 30% over the last 52 weeks, but analysts are optimistic about Digimarc Corp (NASDAQ:DMRC)’s prospects as the stock has a consensus ‘Buy’ rating and a price target of over $39, which represents a significant premium over the current price of $22.89. However, in February, TheStreet downgraded the stock to ‘Sell’ from ‘Hold’. RIMA is the largest shareholder of Digimarc Corp (NASDAQ:DMRC) among the funds that we track, while other investors own much smaller positions in the company. The second-largest stake is held by Eric Semler‘s TCS Capital Management, which disclosed holding 64,250 shares in its latest 13F filing
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