Billionaire Eric Sprott’s investing reputation is rooted in precious metals. In one interview he admitted to have held 90% of his assets outside of Sprott Inc.’s shares, in gold and silver. If his selection isn’t in the precious metals sector, it still usually has to do with something inflation-related such as agriculture or energy. In January, Eric Sprott stepped down from his portfolio manager duties and began to focus on his role as Chairman and Chief Investment Officer, but his firm has continued with the inflation-related theme.
Why do we track Eric Sprott and his funds? Because in 2014, equity hedge funds returned just 1.4%, 11.1% in 2013, and 4.8% in 2012. These are pretty bad compared to the S&P 500 ETF (SPY)’s returns of 13.5% in 2014, 32.3% in 2013, and 16% in 2012. And with management fees ranging anywhere from 20-80%, we hope to get the best picks from the best managers without paying a dime. Investors can avoid these fees by imitating their top small-cap picks themselves. Historically, this approach managed to beat the market by an average of 95 basis points per month. We have also been live testing the performance of this approach since the end of August 2012. The 15 most popular small-cap stocks among hedge funds returned 137% through the end of March 2015 and beat the market by more than 82 percentage points (see the details here).
Now back to Sprott Inc’s positions. Sprott Inc filed its latest 13F with the SEC on April 20. As of March 31, 2015, Sprott Inc held some 343,000 shares of NXP Semiconductors NV (NASDAQ:NXPI) at a value of $34.4 million. Investors like NXP Semiconductors NV (NASDAQ:NXPI) because it’s a play on growing trends in the electronics industry as more connected devices come online. NXP Semiconductors NV (NASDAQ:NXPI) makes the chips to power Apple’s Apple Pay system, a big win for 2015. The company also makes chips for vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) systems. James Dinan’s York Capital Management and David Tepper’s Appaloosa Management are two other prominent names invested in NXP. The stock of NXP Semiconductors jumped by more than 31% during the first three months of 2015.