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).
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.