Neil Chriss, a highly reputed mathematician, has also found his way into hedge fund management, having founded Hutchin Hill Capital in 2007. He went into the hedge fund business after spending some time working on Wall Street and has since built a name for himself as a result of his success. His fund submitted its 13F filing with the U.S. Securities and Exchange Commission for the period of March 31 and the filing showed that the fund sported a public equity portfolio value of $3.61 billion, representing an increase of 24.8% over the last quarter of 2014, while Hutchin Hill Capital maintained $6.73 billion in assets under management. In Chriss’ first years in the hedge fund business, he has posted 12% in annualized gains, approximately six times the average returns registered by his peers. With his multi-strategy approach, he has attracted large sums of capital from investors big and small. Chriss chooses his stocks carefully, carrying out thorough analysis to establish their potential before moving to secure portions in them. In this article, we are looking at three of his new picks made during the first quarter, which are Albemarle Corporation (NYSE:ALB), Darden Restaurants, Inc. (NYSE:DRI), and Kohl’s Corporation (NYSE:KSS).
Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 83 percentage points, returning over 142% (read the details here). Hence a retail investor needs to isolate himself from the herd and take advantage of the best growth opportunities in the market by concentrating on small-cap stocks.
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Chriss roped Albemarle Corporation (NYSE:ALB) into his fold during the first quarter of 2015. At the close of the quarter, the Wall Street expert held a total of 1.08 million shares of the specialty chemical company, with his holding having a market value of $57.17 million. The Baton Rouge, Louisiana-based company acquired Rockwood Holdings, Inc. earlier this year and realigned its global business units in an effort to strengthen its international operations. For the first quarter of 2015, the company posted earnings per share of $1.17, representing a 19% rise compared to the first quarter of 2014. The earnings per share figure handily surpassed Thomson Reuters consensus estimate of $0.71. Analysts forecast $3.89 in earnings per share for the current fiscal year, falling within the company’s own guidance of $3.65-$4.05 per share. 38 of the hedge funds that we track had positions in Albemarle Corporation (NYSE:ALB) at the end of the first quarter, with their holdings having an aggregate value of $595.33 million. Jeffrey Gates‘ Gates Capital Management and Ross Margolies’ Stelliam Investment Management are among the funds that had stakes in the stock.