Jason Karp’s Tourbillon Capital Partners just filed a 13G form with the SEC revealing an ownership stake of 3.19 million shares in Energizer Holdings Inc. (NYSE:ENR), which represent 5.1% of the company’s outstanding common stock. Karp’s long/short equity hedge fund increased its position in Energizer by 2.04 million shares since his most recent 13F filing for the reporting period of March 31. It’s also worth mentioning that Tourbillon Capital Partners owns 2.04 million shares underlying currently exercisable options.
Professional investors like Jason Karp, spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, while Karp’s returns have been strong recently, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. A portfolio of the 15 most popular small-cap stocks among funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012 in backtesting. The exceptional results of this strategy got even better in forward testing after the strategy went live at the end of August 2012. A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 142% and beaten the market by more than 83 percentage points since then, and by 4.6 percentage points in the first quarter of this year (see the details).
Follow Jason Karp's Tourbillon Capital Partners
Tourbillon Capital Partners L.P. is a hedge fund firm established by Jason Karp in January 2013. Karp had acted as the co-chief investment officer at Carlson Capital LP prior to launching Tourbillon. He was also the director of research and money manager of global equities at CR Intrinsic Investors, which was a unit of the former hedge fund firm SAC Capital Advisors LP. Therefore, Karp’s expertise in equities was surely behind the fund’s return of 21% net-of-fees during its first year of existence. The most up-to-date 13F filing displays that Tourbillon Capital Partners manages a public equity portfolio worth $3.88 billion and is primarily invested in two key sectors: the services sector at 38.06%, and the technology sector at 22.22%. In this article, we will also discuss two new stock picks of Jason Karp in addition to the already-mentioned stake in Energizer Holdings Inc. (NYSE:ENR) (which was also a new pick of Karp’s as of his latest 13F). The other two holdings are HRG Group Inc. (NYSE:HRG) and Carter’s Inc. (NYSE:CRI).
Energizer Holdings Inc. (NYSE:ENR) is a St. Louis-based consumer goods company that operates internationally in the broad categories of personal care and household products. Specifically, the company is the producer and vender of a well-known brand of batteries, in addition to producing portable lighting and personal care products in a range of categories. Just recently, Energizer Holdings announced its plans to jettison its Personal Care Division that offers a diversified portfolio of consumer products in the wet shave, skin care, feminine care and infant care categories. As the company’s board of directors decided to focus on other businesses instead, the personal care division will act as a standalone company under the name Edgewell Personal Care. In the meantime, the household product division will maintain the Energizer Holdings name and logo. As the split is expected to be completed by July, the newly-formed standalone companies might indeed benefit from efficiency improvements. The shares of Energizer have increased by over 5% since the beginning of the current year despite suffering a slump during the last three weeks. Thus, it is quite clear that investors will surely gain from owning this stock by focusing on the mid- and long-term performance of the company and disregard its current challenges.
We will now briefly go through Energizer’s financial performance during the latest fiscal quarter of the year. Ward M. Klein, the Chief Executive Officer of the firm, claimed that the company managed to deliver very strong adjusted net earnings per diluted share despite the negative effects of currency exchange rates. Energizer reported net sales of $1.01 billion during its fiscal second quarter of 2015 that ended on March 31, which yields a decrease of 5.1% year-over-year. However, the company posted adjusted net earnings per diluted share of $1.97, increasing 4.8% year-over-year. In the meantime, Energizer generated a net loss per diluted share of $1.41, slightly better than the loss of $1.57 reported in the same period a year ago. Within our database, Kenneth Mario Garschina’s Mason Capital Management represents the largest investor in Energizer Holdings Inc. (NYSE:ENR), owning 2.50 million shares, which are valued at $345.06 million as of March 31, 2015.
Tourbillon Capital Partners reported the acquisition of a 7.95 million-share stake in HRG Group Inc. (NYSE:HRG) during the first quarter, which is worth $99.22 million as of March 31. Regardless of the fact that the shares of HRG Group have plummeted by 8% year-to-date, the stock has been experiencing a firm uptrend during the last month. The financial performance of the company has been very promising as well, as the company delivered solid revenue growth despite the negative effect of the exchange rates. Additionally, Michael Sena stepped down from his Senior Vice President and Chief Accounting Officer positions at the end of May, so we might expect some fresh and innovative minds at the company who can put forward additional growth stimulating ideas. Ian Cumming and Joseph Steinberg’s Leucadia National is the largest shareholder in HRG Group Inc. (NYSE:HRG) within our database, owning 46.60 million shares.
Furthermore, Karp has taken a long position in Carter’s Inc. (NYSE:CRI). He acquired 1.0 million shares in the company, which are worth $92.47 million as of March 31. The stock has risen by over 22% since the beginning of 2015 as the company has been predominantly accompanied by positive news. Carter’s Inc. delivered better-than-expected financial results during its fiscal first quarter, which undoubtedly played a major role in the company’s success. The company’s consolidated net sales reached a figure of $684.8 million, which represents a 5.1% increase year-over-year. In addition to that, Carter’s Inc. also posted a net income of $49.8 million, $15.5 million higher when compared to the same period in 2014. From the pool of over 700 hedge funds that we track, Jonathan Auerbach’s Hound Partners is the largest equity holder in Carter’s Inc. (NYSE:CRI), owning 4.44 million shares.
Disclosure: None
