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Moab Capital Partners’ Return, AUM, and Holdings

Back in 2006, Michael Rothenberg founded his own asset management firm called Moab Capital Partners. Prior to launching his own hedge fund, he worked at Xerion Capital Partners where he was in charge of a portfolio of event-driven, distressed debt and bank debt equities. In fact, Michael Rothenberg sharpened his investment skills mainly in the event-driven sphere. At Troy Capital Management, LLC, he was managing distressed debt portfolio, at Gracie Capital Partners, LLC, which is an event-driven and distressed debt oriented hedge fund, was an investment analyst, and at Perry Capital, LLC, he also honed his investment acumen in the event-driven and distressed debt domains. With almost 20 years of experience in the industry, Michael Rothenberg can be considered an event-driven strategy veteran. He graduated from The Wharton School at The University of Pennsylvania with a BS in Economics, majoring in Finance.

Moab Capital Partners’ investment philosophy covers special situations, arbitrage, credit and distressed, and equity restructuring investment strategies. It applies due diligence procedures such as communication with the competition, shareholders, and industry specialists, giving special importance to free cash flow yields of the companies. It mainly invests in misinterpreted small and mid-cap stocks in the US. The fund’s portfolio usually has around 25 to 40 long positions and 10 to 15 short ones with first 10 accounting 50% of it. According to its plain brochure at the end of 2016, Moab Capital Partners had around $850.52 million in assets under management on a discretionary basis.

Moab Capital Partners’ Return, AUM, and Holdings

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Most of the recent years were favorable for the fund’s investment strategy in terms of the return figures. For instance, its Moab Partners LP fund delivered solid 4.77% in 2012, 18.46% in 2013, 10.15% in 2014, 4.37% in 2015, 10.17% in 2016, and 7.15% in 2017. Last year the fund felt difficult market conditions, losing 1.47% through October. Its total return amounted to 161.30% for a compound annual return of 7.99%, while its worst drawdown stood at 16.86. Its Moab Partners Offshore Limited brought back 4.74% in 2012, 18.25% in 2013, 9.78% in 2014, 4.34% in 2015, and 10.05% in 2016.

Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. We launched a long activist investing strategy in our monthly newsletter 2 years ago. This strategy’s stock picks returned 61% in 2 short years, vs. a gain of 21% for the S&P 500 Index ETF (SPY). Last October we shared one of our stock picks, Ascendis Pharmaceuticals (ASND), in a free sample issue of our monthly newsletter (you can still download it free of charge). The stock doubled in less than 5 months.

We have also been very successful at identifying stocks that will decline even in a bull market. We launched our short strategy a little more than 2 years ago and share our short stock picks in our quarterly newsletter. This strategy’s picks lost 30.9% since then, vs. a gain of 24% for the S&P 500 Index. This means our short strategy actually outperformed the market by nearly 55 percentage points (let us know if you don’t understand how the outperformance for a short strategy is calculated).

Recently our monthly newsletter identified another undervalued stock that is expected to increase its earnings by more than 10% annually and trades at only 10 times its 2019 earnings. We expect this stock to return 60% in the next 12-24 months. We take a closer look at hedge funds like Moab Capital Partners in order to identify their best and worst ideas.

At the end of the first quarter of 2019, the fund’s equity portfolio was valued $421.84 million, down from $423.92 million it was valued at the end of the fourth quarter of 2019. During the quarter, Moab Capital Partners initiated nine new positions and dumped six companies. Even though the funs is more focused on less known stocks among investors it also held several positions in some of the  30 Most Popular Stocks Among Hedge Funds in Q1 of 2019. One of those positions was in Alphabet Inc. (NASDAQ:GOOGL), and it counted 9,070 shares with a value of $10.67 million. This was actually the fund’s ninth biggest holding at the end of March. Another one, for example, was Amazon.com, Inc. (NASDAQ:AMZN), in which the fund held a position worth $10.15 million on the account of 5,699 shares outstanding. And, Amazon took third place on that list of favorites stocks in the first quarter of 2019.

Among the stocks the fund dumped during Q1 2019 were Jefferies Financial Group Inc. (NYSE:JEF), Vanguard Russell 2000 Index Fund ETF Shares (NASDAQ:VTWO), and VanEck Vectors BDC Income ETF (NYSE:BIZD). The fund said goodbye to 347,055 Jefferies’ shares with a value of $6.03 million, to 50,300 Vanguard’s shares with a value of $5.40 million and to 21,409 shares of VanEck that were worth $301,000.

Click here to read the rest of this article, where we present Moab Capital Partners’ most valuable holdings and new additions in the first three months of 2019.

Disclosure: None

This article was originally published at Insider Monkey.

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