Kynikos, the hedge fund of revered short seller Jim Chanos, recently disclosed its U.S public equity portfolio as of September 30, which contained assets worth $309.52 million as of that date. According to the filing, Kynikos sold its entire stake in 31 stocks during the third quarter, while reducing its holding in 24 stocks, making additional purchases in 15 stocks, and initiated a stake in six stocks. The filing also revealed that the fund’s equity portfolio had a very high quarterly turnover rate of 82.22% during the third quarter and that it became considerably top-heavy by the end of that period, with Kynikos’ top-10 equity holdings amassing nearly three-fourths of its portfolio’s value.
In this article, we are going to discuss five stocks that Chanos and his fund Kynikos are bullish on as of the end of the third quarter.
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#5 Crown Holdings, Inc. (NYSE:CCK)
– Shares Held By Kynikos (as of September 30): 76,473
– Value of The Holding (as of September 30): 4.36 Million
Let’s start with Crown Holdings, Inc. (NYSE:CCK), in which Kynikos reduced its stake by 42% during the third quarter. Shares of the consumer goods packaging products company have had a slow but steady run upwards over the last five years, appreciating by 75.58% during that period. Although the stock has corrected a little in this quarter, it is still trading up by 8.15% in 2016. For its most recent quarter, Crown Holdings, Inc. (NYSE:CCK) reported EPS of $1.33, which was $0.03 above analysts’ expectations. However, the revenue of $2.33 billion that it declared for the period missed estimates by $60 million. On October 24, analysts at Jefferies Group reiterated their ‘Buy’ rating on the stock, but lowered their price target on it to $63 from $64, suggesting potential upside of 15%.
#4 Apple Inc. (NASDAQ:AAPL)
– Shares Held By Kynikos (as of September 30): 39,238
– Value of The Holding (as of September 30): 4.44 Million
Kynikos lowered its stake in Apple Inc. (NASDAQ:AAPL) marginally, by 2%, during the September quarter. Apple Inc. (NASDAQ:AAPL)’s stock suffered a significant decline in the days following the company’s third quarter earnings release and is currently trading up by only 5.67% year-to-date. According to recent reports, after billionaire Donald Trump was elected as the new President, the company has been toying with the idea of moving some of its iPhone production back to the United States, presumably to appease the President-elect. However, analysts think that it’s highly unlikely that the company will go ahead with that move unless trade relations between the U.S. and China suffer a dramatic breakdown. On the contrary, a few analysts consider Mr. Trump’s win to be favorable for the company, due to the fact that if he goes ahead with his promises, it will end up paying less taxes and will be able to bring the $200 billion that it holds overseas back to the United States.
We’ll check out three more stocks that Jim Chanos is bullish on over on the next page.
#3 Starz (NASDAQ:STRZA)
– Shares Held By Kynikos (as of September 30): 166,666
– Value of The Holding (as of September 30): 5.2 Million
Moving on, Kynikos increased its holding in Starz (NASDAQ:STRZA) by 15% during the third quarter. Jeffrey Jacobowitz’s Simcoe Capital Management was another hedge fund that we track which boosted its stake in the company during that time, by 7% to 924,875 shares. After months of negotiations, Lions Gate Entertainment Corp. (USA) (NYSE:LGF) announced on June 30 that it would be acquiring Starz (NASDAQ:STRZA) in a $4.4 billion cash and stock deal. Since that announcement, Starz’s stock has been on an upward march. Even Mr. Trump’s recent victory, which was considered detrimental for media companies that are currently engaged in M&A deals, hasn’t caused the stock to pull back, as it now trades up by 1.16% year-to-date. At the end of last month, analysts at Stifel Nicolaus upgraded the stock to ‘Buy’ from ‘Hold’ and also upped their price target on it to $36 from $33.
#2 Molson Coors Brewing Co (NYSE:TAP)
– Shares Held By Kynikos (as of September 30): 51,833
– Value of The Holding (as of September 30): 5.7 Million
Amid a 7.5% rise in Molson Coors Brewing Co (NYSE:TAP)’s stock during the third quarter, Kynikos upped its stake in the company by 14%. Shares of the brewing company have fallen quite a bit since making their lifetime high of $112.09 last month, but still boast year-to-date gains of 5.32%. On November 17, Molson Coors Brewing Co (NYSE:TAP) declared a quarterly dividend of $0.41 per share, which based on the current price of the stock translates into a forward yield of 1.66%. For its fiscal 2016 third quarter, the company reported EPS of $1.03 on revenue of $947.50 million, which was below analysts’ estimates of EPS of $1.05 on revenue of $985.75 million. Nevertheless, most analysts continue to remain bullish on the stock, with an average rating of ‘Buy’ and an average price target of $124.60 on it.
– Related Reading: 10 Largest Alcohol Companies in the World
#1 SPDR S&P MidCap 400 ETF (NYSEARCA:MDY)
– Shares Held By Kynikos (as of September 30): 220,762
– Value of The Holding (as of September 30): 62.31 Million
After boosting its holding in the SPDR S&P MidCap 400 ETF (NYSEARCA:MDY) by 445% during the second quarter, Kynikos increased it by a further 25% during the third quarter. The SPDR S&P MidCap 400 ETF (NYSEARCA:MDY) tracks and seeks to provide investment results that mimic the price and yield performance of the S&P MidCap 400 Index, before expenses. In the last five years, the ETF has appreciated by over 90% and is currently trading at its lifetime high of $297.86. A large part of the gains that the ETF has registered this year have come on the back of the recent rally in the equity markets after Mr. Trump’s win. At the end of October, the ETF had a 12-Month yield of 1.38% and was rated Bronze by Morningstar due to a relatively higher fee than its closest competitors and disadvantageous structure limit.