Marque Millennium Capital is a New York-based hedge fund founded by Wilfred Meckel. According to the official website of the fund, over the past 24 years it has shown superior results with its long-only, large-cap oriented relative value strategies. Most of its stock picks are based on one important assumption, which is described thusly “…over time, the stock market will value the current fundamentals of a company as it has valued them in the past”. In simple words, Marque Millennium buys a company when its price is lower than the historical value for companies with similar fundamentals. According to the most recent 13F report for the June 30 reporting period, the fund’s public equity portfolio holds $192 million in equities. The largest amounts of that capital were allocated towards technology and financial sector stocks, at 25.45% and 17.94% respectively. In this article we invite you to take a closer look at the top three positions of Marque Millennium, represented by Constellation Brands Inc (NYSE:STZ), Blackstone Group LP (NYSE:BX) and Express Scripts Holding Company (NASDAQ:ESRX). Perhaps, it’s high time time to check whether the aforementioned assumption holds true and employ such thinking in some of your own future picks.
We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 123.1% since then and outperformed the S&P 500 Index by around 66.5 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
Following a 20.86% cut to its stake in Constellation Brands Inc (NYSE:STZ), Marque Millennium finished the most recent quarter with 81,950 shares valued at $9.62 million. Constellation Brands is an international alcohol company engaged in the production of beer, wine and spirits. Year-to-date, the stock of this $23.01 billion company has appreciated by 19.93%, though the largest movements occurred mostly in the first quarter. The second quarter turned out to be rather dull, as has the third thus far, despite the company’s earnings announcement at the beginning of July in which it reported beating both the bottom and top line estimates placed upon it by analysts for its latest earnings results, posting earnings per share of $1.26 for the period. Kensico Capital, led by Michael Lowenstein, topped the list the largest shareholders covered by our database during the first three months of the year. His holdings in Constellation Brands Inc (NYSE:STZ) totaled to 6.73 million shares worth $782.62 million.
The next stock is Blackstone Group LP (NYSE:BX), in which Mr. Meckel sold around 21.14% of his previous holdings during the second quarter. As a result, the fund ended up owning some 227,220 shares of Blackstone Group LP (NYSE:BX), worth $8.66 million by the end of the period. During the first half of 2015, Blackstone, the global alternative asset manager and provider of financial advisory services returned around 20.8%, after which it slid by 6.6%. However, analysts believe that the stock has pretty solid upward potential of 25.9% from the $38.60 per share where it is traded at these days. Robert Joseph Caruso’s Select Equity Group held the largest amount of Blackstone Group LP (NYSE:BX)’s shares among the funds we track, 2.35 million in all, valued at $91.52 million as of March 31.
Finally, the third-largest position of Marque Millennium was also reduced over the course of the second quarter of this year. This time, the fund disposed of around 19.92% of its shares of Express Scripts Holding Company (NASDAQ:ESRX), having 82,800 shares left at the end of the period, valued at $7.54 million. The $66.39 billion company provides integrated pharmacy benefit management services. During the past seven months, the stock has been steadily climbing towards a new multi-year high, having gained around 9.11% in 2015. On July 28 the company announced a 1.4% year-to-year growth in sales, and exceeded earnings expectations with its latest results, posting $1.44 in EPS. The results led to the equity price going up by 2.5% on the day. Robert Rodriguez and Steven Romick, managing First Pacific Advisors LLC, held around 4.60 million shares of Express Scripts Holding Company (NASDAQ:ESRX) on March 31, which were worth $399.44 million at that time.