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Murray Stahl Slashes Portfolio but Remains Bullish on These Five Stocks

Murray Stahl founded Horizon Asset Management LLC, an investment firm under the umbrella of Horizon Kinetics LLC, in 1994. Mr. Stahl serves as the portfolio manager of Horizon Asset Management LLC, which employs a contrarian approach to investing and seeks to exploit the short-term focus in equity markets. Put it differently, the investment firm’s main pillar of growth and philosophy relies on the idea that short-termism in equity markets generates “sub-optimal” returns over a long period of time. Thus, the New York-based investment boutique employs a long-term, contrarian, fundamental value investment philosophy, so retail investors sharing a similar investing approach may find interesting investment opportunities by examining the firm’s 13F filings. Mr. Stahl’s Horizon is one of the first investment firms monitored by Insider Monkey to report their quarterly 13Fs for the first quarter of 2016. Murray Stahl and his team conducted a serious portfolio rebalancing during the first quarter of this year, as the investment firm reduced 300 positions and sold out 19 positions. At the same time, Horizon opened 39 new holdings and increased exposure to 120 existing positions during the first three months of 2016. With that in mind, the following article will lay out the top five positions of Horizon as of the end of March, as well as discuss what Mr. Stahl thinks about some of those positions.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

#5. Dreamworks Animation Skg Inc. (NASDAQ:DWA)

– Number of shares held by Horizon as of March 31: 7.21 Million

– Value of Horizon’s holding as of March 31: $179.91 Million

Murray Stahl’s Horizon trimmed its stake in Dreamworks Animation Skg Inc. (NASDAQ:DWA) by 938,683 shares during the first quarter of 2016 to 7.21 million shares, which were valued at $179.91 million on March 31. Dreamworks Animation is an animation studio that has released more than 30 animated feature films, with its business plans targeting two animated feature films per year. The company’s growth also relies on AwesomenessTV (ATV), which is a multi-media platform company that generates revenues from online advertising sales and distribution of content through media channels such as short-form online video, theatrical, home entertainment and television. Dreamworks acquired ATV in May 2013 for an initial cash consideration of $33.5 million, but the total consideration for this transaction has reached $128.5 million. Earlier this month, Verizon Communications Inc. (NYSE:VZ) acquired a 24.5%-stake in this digital entertainment network for approximately $160 million. Dreamworks continues to own a 51%-stake in AwesomenessTV, which has nearly 3.7 million subscribers on YouTube. The company’s revenues for 2015 reached $915.9 million, which increased from $684.6 million in 2014. Feature Films segment revenues, which accounted for 57% of total revenues in 2015, increased 14.7% year-on-year to $520.1 million. Shares of Dreamworks Animation are up 7% year-to-date. Analysts at Pacific Crest Securities, who have an ‘Overweight’ rating on Dreamworks and a price target of $31, recently said that ATV is set to become a “material layer of growth” for the company. Mason Hawkins’ Southeastern Asset Management was the largest equity holder of Dreamworks Animation Skg Inc. (NASDAQ:DWA) within our database at the end of 2015, holding 16.14 million shares.

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