New Position: Credit Suisse Group AG (ADR) (NYSE:CS)
– Shares Owned by Shah Capital (as of June 30): 380,000
– Value of Shah Capital’s Holding (as of June 30): $4.07 Million
Shah Capital found Credit Suisse Group AG (ADR) (NYSE:CS) an attractive buying opportunity in the second quarter, as the hedge fund acquired a new stake of 380,000 Credit Suisse ADS’s during the period. The stake was worth $4.07 million at the end of the quarter and constituted 3.1% of the fund’s equity portfolio. The Swiss banking giant has lost 47% of its market value in 2016, as the bank’s turnaround efforts are being hampered by uncertainty around the United Kingdom’s imminent exit from the European Union. In late June, analysts at RBC Capital Markets downgraded Credit Suisse to ‘Sector Perform’ from ‘Outperform’, saying that “we expect a prolonged period of uncertainty post Brexit to negatively impact businesses and consumer confidence across the U.K. and Europe and beyond.” The second-biggest Swiss bank has been busy shifting away from investment banking to focus more on managing capital for high-net-worth individuals. Ken Fisher’s Fisher Asset Management owns 10.32 million ADS’s of Credit Suisse Group AG (ADR) (NYSE:CS) as of June 30.
Second-Largest Position: Coeur Mining Inc. (NYSE:CDE)
– Shares Owned by Shah Capital (as of June 30): 3.12 Million
– Value of Shah Capital’s Holding (as of June 30): $17.51 Million
The investment firm run by Himanshu H. Shah did not adjust its position in Coeur Mining Inc. (NYSE:CDE) during the June quarter, remaining with 3.12 million shares valued at $17.51 million on June 30. This was the second-largest holding in the hedge fund’s portfolio at the end of June, accounting for 13.4% of its value. The gold and silver producer, which has mines in the U.S, Mexico, and Bolivia, has seen the value of its stock skyrocket by 450% since the start of 2015. The real catalyst behind the impressive surge in the company’s share price has been the recovery in silver prices. Earlier this week, analysts at RBC Capital Markets upgraded Coeur Mining to ‘Outperform’ from ‘Sector Perform’ and raised their price target on the stock to $18 from $9, citing improving fundamentals and free cash flow potential. RBC considers the Chicago-based gold and silver producer as a “leveraged play on precious metal prices”. Jim Simons’ Renaissance Technologies had 2.52 million shares of Coeur Mining Inc. (NYSE:CDE) among its holdings at the end of March.
Largest Position: China Yuchai International Limited (NYSE:CYD)
– Shares Owned by Shah Capital (as of June 30): 3.34 Million
– Value of Shah Capital’s Holding (as of June 30): $32.91 Million
China Yuchai International Limited (NYSE:CYD) was the largest position in Shah Capital’s portfolio at the end of June, making up 25.1% of the firm’s portfolio. The “soft” activist firm left its 3.34 million-share stake in China Yuchai unchanged during the second quarter, with the stake being valued at $32.91 million on June 30. Shah Capital has previously urged China Yuchai International, a Singapore holding company for a Chinese manufacturer of diesel and natural gas engines, to increase its stake in the manufacturer. The Singapore holding company currently owns roughly 76% of its China-based subsidiary Guangxi Yuchai Machinery Company Limited. Shah Capital also urged China Yuchai to sell its stake in real estate company HL Global Enterprises, as well as its stake in consumer electronics distribution company Thakral Corporation. China Yuchai shares are up by 3% in 2016. Forward Management, run by J. Alan Reid Jr., was the owner of nearly 443,000 shares of China Yuchai International Limited (NYSE:CYD) at the end of the first quarter.