Lonestar Capital Management LLC is a San Francisco-based investment firm which was founded in 2001 by the famous veteran of the hedge-fund industry, Jerome L. Simon. Lonestar’s equity portfolio had a value of over $368.52 million at the end of the second quarter, according the fund’s 13F filings with the SEC. In the third quarter, Lonestar Capital Management posted a compelling return of 19.29% from its long positions in nine companies which have a market cap of at least $1 billion.
Unlike the actual returns of the hedge funds which include short and long positions in all companies in the portfolio as a whole, targeted returns calculated only for long positions in companies which have a market capitalization of $1 billion or above were positive for 627 hedge funds out of nearly 660 funds in Insider Monkey’s database. These returns show that hedge imitating hedge funds smartly based on specific data points can help beat the market.
Let’s find out the Lonestar’s biggest bets which are responsible for its heavy gains.
Lonestar upped its stake Berry Plastics Group Inc (NYSE:BERY) by 3% in the second quarter, concluding the period with a total of 825,000 shares of the company, which have a total worth of $32.1 million. The stock returned 12.9% during the third quarter. At the end of June, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the first quarter of 2016. According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Polak’s Anchor Bolt Capital had the number one position in Berry Plastics Group Inc (NYSE:BERY), worth close to $210.7 million, comprising 7.4% of its total 13F portfolio. The second largest stake was held by Canyon Capital Advisors, managed by Joshua Friedman and Mitchell Julis, which holds a $125.1 million position; the fund has 5% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Joshua Kaufman and Craig Nerenberg’s Brenner West Capital Partners, Barry Rosenstein’s JANA Partners and Robert Boucai’s Newbrook Capital Advisors.
Lonestar Capital sold 25% of its stake in The Goodyear Tire & Rubber Company (NASDAQ:GT) in the second quarter and reported ownership of 650,000 shares of the company worth of $16.68 million as of the end of June. The stock returned 26.2% during the third quarter. Heading into the third quarter of 2016, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 6% from the previous quarter. Among these funds, Adage Capital Management held the most valuable stake in The Goodyear Tire & Rubber Company (NASDAQ:GT), which was worth $217.7 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $158.9 million worth of shares. Moreover, Diamond Hill Capital, Marcato Capital Management, and Atlantic Investment Management were also bullish on The Goodyear Tire & Rubber Company (NASDAQ:GT).
On the next page, we will discuss the rest of Lonestar’s important stock picks.
LendingClub Corp (NYSE:LC) was a new addition to Lonestar’s portfolio as of the second quarter, as the fund bought 1.7 million new shares of the company, which had a total value of $7.31 million. The stock surged by 43.7% during the third quarter. At the end of the second quarter, a total of 24 of the hedge funds followed by our team were long this stock, a change of 4% from the end of March. Among these funds, Park West Asset Management held the most valuable stake in LendingClub Corp (NYSE:LC), which was worth $25.4 million at the end of the second quarter. On the second spot was VY Capital which amassed $19.4 million worth of stock. Moreover, Light Street Capital, EastBay Asset Management and Passport Capital were also bullish on LendingClub Corp (NYSE:LC).
Lonestar increased its exposure to SUPERVALU INC. (NYSE:SVU) by 11% to 1.0 million shares of the company valued at $4.72 million during the second quarter. In the following three months, the stock gained 5.7%. At the end of June, 28 funds from our database were bullish on this stock, unchanged over the quarter. Among these funds, North Tide Capital held the most valuable stake in SUPERVALU INC. (NYSE:SVU), which was worth $115.6 million at the end of the second quarter. On the second spot was Glenhill Advisors which amassed $78.7 millions worth of shares. Moreover, AQR Capital Management, Two Sigma Advisors, and Millennium Management were also bullish on SUPERVALU INC. (NYSE:SVU).