In a recently disclosed filing with the SEC, Debra Fine‘s Fine Capital Partners reduced its stake in Hornbeck Offshore Services, Inc. (NYSE:HOS) by nearly 1.4%. According to the latest filing with SEC, Fine Capital now owns 3.56 million shares, down from 3.61 million shares held previously. Fine Capital’s current passive stake in Hornbeck accounts for 9.97% of the company’s outstanding common stock. At the end of the 2014, Hornbeck represented the third-largest position in Fine’s equity portfolio, trailing Assured Guaranty Ltd. (NYSE:AGO) and Scientific Games Corp (NASDAQ:SGMS), on the first and second spots respectively.
The New York City-based hedge fund, Fine Capital Partners was founded in 2004 and has both its long and short equity positions in the U.S. companies. Debra Fine’s investment philosophy is based on fundamental research of the companies, which involves their current market valuation, competitive market position, profit and growth outlook, management capabilities, capital structure, and cash flow generation properties. Besides managing her fund, she has been a Trustee of Save The Children Federation since February 2013. The fund’s equity portfolio, having a value of about $1.20 billion, as of the end of last year, has around 35% of its value held in the finance sector, followed by the consumer discretionary sector constituting 27% of the value.
Generally, following the top stock picks of hedge funds is not a great strategy for retail investors, since they mostly involve large cap companies. On the other hand, following their small cap picks is much more advantageous. Our research has shown that between 1999 and 2009, hedge funds on an average only beat the market by 2.0 percentage points on an annual basis. However, the interesting part is that small caps picks beat the market by double digits during the same period. Fine Capital’s equity portfolio is mainly concentrated in small-cap companies.
Fine Capital increased its stake in Hornbeck Offshore Services, Inc. (NYSE:HOS) by nearly 6% during the fourth quarter. the stake being the third largest in the fund’s portfolio. The $682.69 million company has been under pressure lately and the stock is down by nearly 56.6% over the last year. Hornbeck Offshore Services, Inc. (NYSE:HOS) is a provider of marine transportation services to exploration and production, oilfield service, offshore construction and United States military customers. The recent dip in oil prices has hit the company hard. After delivering a record quarterly revenue in the second quarter of 2014, Hornbeck missed revenue estimates in both subsequent quarters. Fourth quarter Earnings per Share (EPS) of $0.52 missed the consensus estimate by $0.07 and revenues of $160.22 million were $7.44 million smaller than anticipated.
Among more than 700 hedge funds that we track, one prominent investor of Hornbeck Offshore Services, Inc. (NYSE:HOS) is billionaire Israel Englander‘s Millennium Management, which initiated a position in the company with 1.57 million shares valued at $39.15 million during the fourth quarter.