Forestar Group Inc., American Capital Ltd., Axalta Coating Systems Ltd: Gratia Capital’s Top Picks

American Capital Ltd. (NASDAQ:ACAS) remains Gratia Capital’s second choice, with the addition of 11,124 shares to their holding during the fourth quarter. American Capital has proven to be a volatile stock of late, with a beta of 1.66, though it proved a wise choice to hold onto in the fourth quarter, as it rose 3.18%. Short interest in American Capital dropped by 30% heading into February, and the stock is up 3.07% thus far during the month, after a rocky January.

The private equity firm, based in Bethesda, Maryland, and with offices in cities such as Singapore, London, and Paris, manages $21 billion in assets, and has $80 billion in total assets under management. In addition to their asset management portfolio, they also manage three other publicly-traded companies with a book value of approximately $11 billion: American Capital Agency Corp. (NASDAQ:AGNC), American Capital Mortgage Investment Corp. (NASDAQ:MTGE) and American Capital Senior Floating, Ltd. (NASDAQ:ACSF).

Jeffrey Tannenbaum’s Fir Tree, and Barry Rosenstein’s JANA Partners are two large investors in American Capital Ltd. (NASDAQ:ACAS), with ownership of 12.28 million and 12.13 million shares respectively.

Lastly is Gratia Capital’s strong play on the newly listed Axalta Coating Systems Ltd (NYSE:AXTA). The liquid and powder coatings business was formerly a division of  E I Du Pont De Nemours And Co (NYSE:DD) dubbed DuPont Performance Coatings, before being sold to The Carlyle Group LP (NASDAQ:CG) in February 2013 and being rebranded as Axalta.

In November 2014, The Carlyle Group took Axalta public, offering 50 million shares of the company at $19.50 a piece.  NASCAR driver Jeff Gordon, whose car is painted and sponsored by Axalta, as well as being prominently adorned with their logo, was on hand at the NYSE for the company’s IPO. Since then, the stock has soared more than 25% from the IPO offering price, to $25.07, giving the company a market cap of $5.72 billion.

Benjamin A. Smith’s Laurion Capital Management is another one of our funds that has declared early ownership in Axalta Coating Systems Ltd (NYSE:AXTA), with 75,000 shares at the end of 2014.

Disclosure: None