Bourgeon Capital Bets on Tech, Oil & Finance for Q2

John A. Zaro is the CEO of Bourgeon Capital, a member of the New York Society of Security Analysts and holds a BA of Arts in Political Science/Economics from Stanford University. Bourgeon Capital has recently disclosed its 13F portfolio, which has a value of $163 million in equities and contains 106 long positions.  As of the end of March, Bourgeon Capital’s largest positions are represented by JPMorgan Chase & Co. (NYSE:JPM), Williams Companies Inc (NYSE:WMB), Plum Creek Timber Co. Inc. (NYSE:PCL), Johnson Controls Inc (NYSE:JCI) and Schlumberger Limited. (NYSE:SLB).

We follow Bourgeon Capital alongside some 730 other investors because our research has shown that imitating a portfolio of the 15 most popular small-cap picks among them can generate around 1 percentage point in excess of the S&P 500 Total Return Index’s monthly returns, on average. Moreover, these small-cap stocks delivered a monthly alpha of 80 basis points, compared to the 50 most popular large-cap stocks among hedge funds, which had a monthly alpha of about six basis points per month between 1999 and 2012. We have been tracking the performance of these small-cap stocks since the end of August 2012 and this strategy has beaten the market by around 80 percentage points over the last 2.5 years, gaining more than 135% (see the details here).

John Zaro of Bourgeon Capital

In the next sections, we will analyze John A. Zaro’s largest holdings as of the end of March. On the first spot is JPMorgan Chase & Co. (NYSE:JPM), in which Bourgeon Capital disclosed a $5.45 million position that contains 90,004 shares, which represent 3.34% of the fund’s equity portfolio. For the first quarter of 2015, JPMorgan Chase & Co. (NYSE:JPM) reported a net income of $5.9 billion, an increase of 20% on the year, or $1.45 per share, and revenue of $24 billion. Aside from Bourgeon Capital, other shareholders of JPMorgan Chase & Co. (NYSE:JPM) include Lansdowne Partners, Ken Fisher’s Fisher Asset Management and Edgar Wachenheim’s Greenhaven Associates.

Mr. Zaro’s stake in Williams Companies Inc (NYSE:WMB) is the second-largest in its equity portfolio with a value of $4.98 million. The total number of shares held by Bourgeon Capital in the company has decreased by around 14% on the quarter to 98,350 shares. According to its financial report for the first quarter of 2015, the company posted an adjusted EBITDA of $917 million, up by 19% on the year on the back of its mergers with Access Midstream, Atlantic-Gulf and Northeast G&P.  Williams Companies Inc (NYSE:WMB) also posted a net income of $89 million for the first quarter of 2015, compared with $352 million in the same period of the previous year. Other large shareholders of Williams Companies Inc (NYSE:WMB) among the funds we track are Corvex Capital, managed by Keith Meister, Eric W. Mandelblatt’s Soroban Capital Partners and Fir Tree, founded by Jeffrey Tannenbaum.