Geoffrey Raynor’s Q Investments has filed its 13F with the SEC for the reporting period of March 31, 2015, disclosing a public equity portfolio valued at $547.50 million. Raynor is the founding partner of the firm, which he founded the investment firm in 1994. The investment firm has over $3.41 billion in assets under management and works out of its offices in Fort Worth, Texas. Raynor’s fund is most heavily invested in the technology sector overall, though the bulk of his top picks are real estate-related, and it’s these picks which we’ll look at in this article, them being M/I Homes Inc (NYSE:MHO), LGI Homes Inc (NASDAQ:LGIH), and Forestar Group Inc. (NYSE:FOR). All of these companies are micro-cap investments, with M/I Homes Inc (NYSE:MHO) being the highest valued of the three with a market cap of $609.39 million.
Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole. These small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Moreover, since the beginning of forward testing from August 2012, the strategy worked just as our research predicted, outperforming the market every year and returning 142% over the last 32 months, which is more than 83 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
M/I Homes Inc (NYSE:MHO) is the second ranked long position of Raynor, who owns 728,023 shares of the single-family home builder, with a value of $17.36 million. The real estate firm improved its quarterly revenue by 12% to $263 million in the first quarter of 2015, with earnings per share of $0.31, which was lower than the prior year earnings per share of $0.41. Market experts are expecting M/I Homes Inc (NYSE:MHO) to report earnings per share of $0.40 for the current quarter. The shares of the company have improved 9.72% year-to-date. Royce & Associates and Gratia Capital are among the primary stockholders of M/I Homes Inc (NYSE:MHO) with investments worth $16.91 million and $16.90 million, respectively.