According to a recent Schedule 13D form filed with the SEC, Ricky Sandler’s Eminence Capital owns 3.21 million shares of Men’s Wearhouse Inc. (NYSE:MW), which represent 6.6% of the company’s outstanding common stock. This marks a decrease to Eminence Capital’s equity holding in Men’s Wearhouse, which is down 25% from the stake of 4.28 million shares the fund reported ownership of in its most recent 13F filing with the SEC.
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 84 percentage points, returning over 144% (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 the best small-cap stock ideas of the best fund managers, without having to pay high fees.
Eminence Capital LLC is a New York-based hedge fund founded by its current chairman, Ricky Sandler, in January 1999. At the age of 25, Ricky Sandler co-founded Fusion Partners with one of his former colleagues at Morris Mark, Wayne Cooperman (Leon Cooperman’s son). This partnership, which started in 1994, was initially financed with $28 million and the fund had generated a net annualized return of 31% by 1998, reaching a value of $350 million when the two decided to dissolve the partnership because of their dissimilar investment philosophies. Ricky Sandler’s Eminence Capital has managed to deliver a 13% net annual compounded return since its inception in spite of its slump of 19% during the financial crisis of 2008. At the end of the most recent quarter, the value of Eminence Capital’s public equity portfolio stood at $6.46 billion. At the same time, the largest equity stakes of the hedge fund include Fossil Group Inc. (NASDAQ:FOSL) and GNC Holdings Inc. (NYSE:GNC), with the fund owning 3.15 million shares valued at $260.07 million in the former and 4.56 million shares valued at $223.77 million in the latter.
Men’s Wearhouse, founded by George Zimmer in 1973, is one the largest men’s dress clothes retailers in the United States. If you’re looking for an attractive stock with the wind at its back, this company has strong momentum in 2015, increasing more than 40% since the beginning of the current year, and could push even higher in the months ahead. This week, Men’s Wearhouse announced a 10-year deal with Macy’s Inc. (NYSE:M) to operate men’s tuxedo rental shops inside 300 Macy’s stores. It is expected that the leading provider of tuxedo rental products and services will be running 17 tuxedo shops by autumn of this year, while the remaining ones will be open by the fall of 2016. The two companies will also cooperate in developing a digital tuxedo rental shop on macys.com. Therefore, the current outlook is strong for the company, but of big interest should be the long-term potential from the above-mentioned cooperation that will most probably unlock new revenue streams for the company.