#3 Global Indemnity plc (NASDAQ:GBLI)
– Shares held by Springhouse Capital Management (as of March 31): 599,148
– Value of Holding (as of March 31): $18.65 million
Moving on, Springhouse Capital increased its stake in Global Indemnity plc (NASDAQ:GBLI) by 13% during the first quarter. Shares of the insurance provider have been on a slow but steady bull run since 2012, appreciating by over 50% since then. They recently hit their 52-week high of $32.09, but are currently trading up by only 5% year-to-date, owing to a decline in the last few trading sessions. Some analysts believe that shares of Global Indemnity plc (NASDAQ:GBLI) will find it hard to continue their rally in the coming quarters, as they are already trading at a considerable premium of 23.60-times expected 2016 earnings. For the first quarter, the company reported EPS of $0.41 on revenue of $141.4 million, compared to the EPS of $0.26 on revenue of $142.9 million it earned for the same quarter of last year. With ownership of 344,544 shares of Global Indemnity at the end of 2015, Ron Bobman‘s Capital Returns Management trailed only Springhouse Capital as the company’s largest shareholder among the funds covered by Insider Monkey.
#2 Morgan Stanley (NYSE:MS)
– Shares held by Springhouse Capital Management (as of March 31): 911,933
– Value of Holding (as of March 31): $22.81 million
Despite its stock plummeting by 21% during the first quarter, Morgan Stanley (NYSE:MS) jumped two spots during that period to become Springhouse Capital’s second-largest equity holding at the end of March, owing to the fund boosting its holding in the company by 143% during that time. After the first quarter rout, shares of Morgan Stanley (NYSE:MS) did stabilize in April, but are still trading down by 18.55% year-to-date. The investment bank came out with its first quarter numbers on April 18, declaring EPS of $0.55 on revenue of $7.79 billion, beating analysts’ consensus EPS estimate by $0.09, but missing on their revenue estimate by $80 million. Though Morgan Stanley is currently trading at a considerable discount to its tangible book value, several prominent analysts currently have a ‘Hold’ rating on the stock, including analysts at Credit Suisse, who on April 19 reiterated their ‘Hold’ rating. Richard S. Pzena‘s Pzena Investment Management also increased its stake in Morgan Stanley significantly during the first quarter, by 34% to 12.65 million shares.
#1 Citigroup Inc (NYSE:C)
– Shares held by Springhouse Capital Management (as of March 31): 626,000
– Value of Holding (as of March 31): $26.14 million
Among the stocks covered in this article, Springhouse Capital Management made the smallest percentage increase to its stake in Citigroup Inc (NYSE:C) during the first quarter, at 10%. However, the banking behemoth continued to remain the fund’s largest equity holding at the end of that period. Explaining his rationale behind adding more shares of Citigroup to his portfolio during the first quarter, Mr. Romick discussed the company in a letter to investors of the FPA Crescent Fund, saying that:
“If half of its China, energy and metals & mining loans were to default this year and Citi recovered just 40 cents on the dollar, and if consensus earnings are correct, then Citi would still earn money this year and end 2016 with more than $60 per share of tangible book value and tangible equity to tangible assets of more than 10%. That would mean book value would actually increase despite the write-offs. We, therefore, thought Citi at a 40% discount to its minimum worth was a great risk/reward.”
According to recent reports, the bank has put its Credit Card Merchant Acquiring business in Asia, which generates around $400 million in gross revenue, up for sale as part of its ongoing global plan to exit non-core businesses. Billionaire Ken Fisher‘s Fisher Asset Management trimmed its stake in Citigroup Inc (NYSE:C) by 1% to 12.02 million shares during the first quarter.