Kevin D. Eng’s Columbus Hill Capital Management has filed its 13F with the SEC for the reporting period of March 31, 2015. After analyzing the equity portfolio of Mr. Eng, we found out that a large percentage of his stock investments are similar to his previous employer David Tepper’s Appaloosa Management L.P. What is more interesting is that Kevin Eng has worked for David Tepper as well as Stan Druckenmiller of Duquesne Capital Management but his portfolio seems to be inspired from Tepper’s stock picks. It is also possible that Eng and Tepper share ideas. Some of the common stock positions held by Columbus Hill Capital and Appaloosa Management include Delta Air Lines, Inc. (NYSE:DAL), United Continental Holdings Inc (NYSE:UAL), Google Inc (NASDAQ:GOOGL), Axiall Corp (NYSE:AXLL), and Bank of America Corp (NYSE:BAC).
Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to come up with attractive investment ideas. We also 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 145% over the last 34 months, which is more than 85 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
Columbus Hill Capital Management raised its stake in Delta Air Lines, Inc. (NYSE:DAL) by 316% with 792,230 shares of the airliner valued at $35.62 million. It might be of interest to notice that David Tepper’s Appaloosa Management L.P also upped its stake in the global airline company by 45% with 4.67 million shares valued at $210.03 million. As of now Delta Air Lines, Inc. (NYSE:DAL) is under a continuous dispute with Southwest Airlines Co (NYSE:LUV) for its operations at the Dallas Love Airport and both the companies are ready to file lawsuits against the city in case proper accommodation for their flights is not provided. Delta Air Lines has also attracted investments from Lansdowne Partners.
Despite a 17.67% decline in the share prices of United Continental Holdings Inc (NYSE:UAL), Columbus Hill Capital Management initiated a new position in the air transportation company with 391,404 shares worth $26.32 million. On the other hand, Appaloosa Management reduced its stake in the holding company by 19% during the first quarter of 2015 with 3.97 million shares valued at $266.88 million. United Airlines, subsidiary of United Continental Holdings, added two used Boeing planes of Copa Airlines, business arm of Copa Holdings, S.A. (NYSE:CPA), 737 and 700, to its existing fleet. In addition to it, United Airlines is all set to offer premium air transportation services at Newark Liberty International Airport starting this October. Some of these services include flatbed seats in BusinessFirst cabin and extra legroom in its Economy plus class flights. On top of it, the airliner has invested more than $2 billion at the Newark International Airport for building world-class gateway. Daniel Och’s Oz Management is among the primary stockholders of United Continental Holdings Inc (NYSE:UAL).
One interesting fact about the airlines stocks is that David Tepper sold out of its $233 million American Airlines (NASDAQ:AAL) position by the end of Q1. On the other side of the trade might have been Kevin Eng as he boosted his AAL stake by 78% during the quarter. We recently discussed insider trading activity at American Airlines in this article.
Google Inc (NASDAQ:GOOGL) is another common stock pick of Appaloosa Management and Columbus Hill Capital Management. David Tepper owns 342,427 Class A shares of Google along with 407,937 Class B shares of the search engine company. Appaloosa Management has reduced its stake in Google Inc (NASDAQ:GOOGL) as shown in its 13F filing for the first quarter of 2015. Somewhat similar trend was observed in Columbus Hill Capital Management as the investment manager reduced its stake in the tech giant by 60% to 43,674 shares valued at $24.23 million. Following a similar trend in the technology industry, Google Inc (NASDAQ:GOOGL) has launched its own music streaming service, Google Play. The search engine company has launched Google Play against the upcoming music service of Apple Inc. (NASDAQ:AAPL) and other competitors like Spotify. Google will offer the trial version of the music streaming service free and it will introduce a subscription package later for a monthly fee of $9.99 for the next two years. This service will include radio stations, which is likely to give it a competitive edge over Apple’s music service. Andreas Halvorsen is among one of the primary stockholders of Google Inc (NASDAQ:GOOGL).