Minneapolis-located Whitebox Advisors was founded in 2000 by Andy Redleaf. He is the CEO of $4.2 billion hedge and mutual fund manager. According to an internal memo obtained by CNBC.com from this hedge fund guru, Redleaf noted that the oil market may have been overvalued by the incidence of China, country which has the capacity to buy due to its easy credit and also from excess money going to oil producers who increased supply. Additionally, he expressed his fear that the markets may have a similar behavior that ended in the 2008 crisis.
The fund disclosed an equity portfolio valued at some $2.5 billion as of the end of 2014; and it has produced an annualized return of 14 percent net of fees since inception in January 2002. The equity portfolio is mainly invested in Financials (18.9%), Health Care (16.8%), and Energy (14.9%) stocks. Whitebox’s last 13F filing showed that the fund raised its exposure towards consumer discretionary and financials stocks, but Mr. Redleaf reduced his holdings in the health care and tech sector. We have extracted the most valuable top pick holdings of Whitebox in terms of their market value, as of the latest 13F filing with the Securities and Exchange Commission. Let’s take a look at three of them, with the companies being Par Petroleum Corporation. (NYSEMKT:PARR), American Capital Ltd. (NASDAQ:ACAS), and New Senior Investment Group Inc (NYSE:SNR).
The first company mentioned before is a small-cap stock. It is important to highlight this, because mimicking the activity of hedge funds by investing in their large-cap picks is not the best strategy for retail investors, since our tests of a portfolio consisting of 50 most popular picks among hedge funds underperformed the market by 7.0 basis points per month between 1999 and 2012. On the other hand small-cap picks have a better chance of helping an investor to beat the market, since our small-cap strategy returned 132% since the end of August 2012 until March 2015.
At the end of 2014, Par Petroleum Corporation. (NYSEMKT:PARR) represented the first-largest holding in terms of value. Whitebox Advisors holds 8.62 million shares of the company, with no active trading on the fourth quarter, the value of the stake amounting to $112.02 million.
Par Petroleum Corporation. (NYSEMKT:PARR) currently operates as a diversified energy company in the U.S. The firm has posted results for the fourth-quarter of 2014. Revenue decreased by 6.35% in the fourth quarter when compared to the same quarter one year prior, falling from $756 million to $708 million. Along with this, earnings per share (EPS) have significantly increased in the fourth quarter of 2014 from the same quarter of fiscal 2013, to $1.02 from -$2.11.
In times where the financial markets return the focus on the meeting of the Federal Reserve and when the monetary authority of the United States will begin to raise rates; oil continues to decline.
Iconiq Capital LLC and Highbridge Capital Management are two holders of Par Petroleum Corporation. (NYSEMKT:PARR), holding 1.80 million shares and 1.07 million shares respectively.
American Capital Ltd. (NASDAQ:ACAS) is next on the list with Whitebox Advisors holding 4.47 million shares, down by 8% on the quarter; the value of the stake amounts to $65.31 million. The stock price dropped by about 6.5% in 2014.
The private equity and venture capital firm´s gross profit margin for the fourth quarter has decreased when compared to the same quarter a year prior. Nevertheless, sales and net income significantly increased in the fourth quarter of 2014 from the same quarter of fiscal 2013.
Brian Taylor’s Pine River Capital Management was the largest shareholder of American Capital Ltd. (NASDAQ:ACAS), which upped its stake by 22% on the quarter to 23.41 million shares valued at $195.87 million at the end of 2014; the position accounted for over 2.6% of the fund’s equity portfolio and was the largest in terms of value.
Finally, New Senior Investment Group Inc (NYSE:SNR) ranks as a top pick, with a position of 2.64 million shares. The fund’s stake has a market value of $43.47 million and accounts for almost 2% of Whitebox’s equity portfolio. However, New Senior Investment Group Inc (NYSE:SNR)’s stock lost 1.28% in a year-to date basis and 12.39% in the October-December period. So, New Senior Investment Group’s shares lost 13.52% of their market value since they began trading in late October and closed today at a price of $16.54 each.
John Osterweis’ Osterweis Capital Management is the largest investor in New Senior Investment Group Inc (NYSE:SNR) as it reported holding 3.66 million shares, valued at $ 60.22 million.