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Hedge Fund Limestone Value Partners Is Snapping Up These Declining Stocks

Limestone Value Partners, led by Douglas Dunn and Vincent Soler, recently filed its 13F form with the U.S. Securities and Exchange Commission for the reporting period ending September 30. Limestone disclosed a public equity portfolio, valued at $81.84 million. The filing showed that the fund invested a large amount of money in real estate and energy stocks. In this article, we’ll take a look at Limestone’s top stock picks, including Microsoft Corporation (NASDAQ:MSFT), for the quarter.

Douglas Dunn And Vincent Soler
Douglas Dunn And Vincent Soler
Limestone Value Partners

We don’t just track the latest moves of hedge funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research which showed that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests, and easily beating the most popular large-cap picks of funds, which nonetheless get the majority of their collective capital. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic only the very best ideas of the best fund managers on your own? During the three years since the beginning of forward testing in August 2012, the Insider Monkey small-cap strategy has outperformed the market by more than 50 percentage points, returning 102% (see more details).

Lets discuss Limestone’s top stocks.

Realogy Holdings Corp (NYSE:RLGY)

Shares Owned by Limestone (as of September 30): 255,400

Value of Limestone’s Shares (as of September 30): $9.61 million

Percentage of Limestone’s Public Equity Portfolio (as of September 30): 11.74%

Shares Owned by Limestone (as of June 30): 223,400

Third Quarter Returns: -19.46%

Limestone seems to be a big fan of New Jersey-based Realogy Holdings Corp (NYSE:RLGY), a residential real estate franchiser and a provider of real estate brokerage, relocation, and title and settlement services. The fund increased share ownership in Realogy Holdings Corp (NYSE:RLGY) by 14% during the quarter. The company had impressive financial results for the second quarter, with net income increasing by 43% to $97 million, compared to the prior year quarter. Revenue for the quarter rose by 9% to $1.7 billion, compared to 2014. Realogy Holdings Corp (NYSE:RLGY) lost 13% year-to-date and nearly 20% during the third quarter. Another large investor of the company is Stephen Mandel’s Lone Pine Capital, owning more than 10 million shares.

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Buckeye Partners L.P. (NYSE:BPL)

Shares Owned by Limestone (as of September 30): 144,900

Value of Limestone’s Shares (as of September 30): $8.59 million

Percentage of Limestone’s Public Equity Portfolio (as of September 30): 10.49%

Shares Owned by Limestone (as of June 30): 0

Third Quarter Returns: -18.48%

Buckeye Partners L.P. (NYSE:BPL) is a new position initiated by Limestone during the third quarter. Buckeye Partners L.P. (NYSE:BPL) owns and operates a diversified network of integrated assets providing midstream logistic solutions. Financial health of the company seems impressive, as the company’s second quarter income increased to $91.3 million, versus $61.9 million in 2014. Shares of Buckeye Partners L.P. (NYSE:BPL) lost more than 8% year-to-date. Nearly 19% decline in the stock and increasing earnings must have been enough to trigger a large purchase for Limestone Value Partners.

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