Based in Milwaukee, Skylands Capital was founded in 2004 by Charles Paquelet, who previously served as principal at Strong Capital Management since 1989. His approach to investment includes fundamental analysis, macro trends and on-site meetings with a company’s management. According to its latest 13F filing, Skylands Capital’s equity portfolio carried a market value of approximately $625 million at the end of the first quarter of 2016. Roughly 20% of the portfolio is represented by technology stocks, while transports and consumer discretionary sectors account for 18% each. It is important to note that Paquelet and his team have decided to reduce their exposure to a number of their biggest holdings and in this article we’ll have a look at the top five of them.
Imitating hedge funds and other institutional investors can help identify some of the most profitable stocks on the market. However, our extensive research that covered the period between 1999 and 2012, showed that the best approach is to follow these investors into their small-cap stocks. Our backtests showed that the 15 most popular small-cap stocks among hedge funds managed to generate a monthly alpha of 81 basis points, versus an alpha of 0.7 percentage points posted by their top 50 large-cap picks (see more details here).
Charles Paquelet and his team dumped 21% of their stake in American Tower Corp (NYSE:AMT) during the quarter, leaving Skylands Capital with 195,050 shares valued at $19.9 million. At the end of the 2015 fourth quarter, the largest stake in American Tower Corp (NYSE:AMT) among the world’s top hedge funds was held by Akre Capital Management, run by Charles Akre, which held 6.31 million shares worth roughly $611 million. American Tower Corp (NYSE:AMT) has a market cap in excess of $44 billion and pays an annual dividend of $1.90, which represents a yield of 1.80%. Shares are currently trading at a trailing Price to Earnings (P/E) ratio of 73.89, significantly higher than the industry average of 56. American Tower is set to release its next financial report on April 29, with analysts projecting earnings of $1.30 per share on $1.29 billion in revenues.