Michael Hintze is the founder of multi-strategy asset management firm CQS Cayman. In 2016, Hintze’s CQS Directional Opportunities fund posted a stunning 30% return. This figure is all the more commendable considering that only a few multi-strategy funds managed a double-digit return. 2016 saw interesting twists and turns for the hedge fund industry. Donald Trump victory in USA presidential elections, exchange rate and gold price fluctuations and other macroeconomic trends have all contributed towards a very challenging environment for hedge funds.
With this in mind, let’s take a closer look at some top stock picks from CQS Cayman’s latest 13F filing, including Under Armour Inc (NYSE:UA.C), BHP Billiton Limited (ADR) (NYSE:BHP), Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA), Liberty Interactive Corporation – Series A Liberty Ventures (NASDAQ:LVNTA), and Altisource Portfolio Solutions S.A. (NASDAQ:ASPS).
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
CQS Cayman reported a $57 million position in Under Armour Inc (NYSE:UA.C), which contained 1.69 million shares at the end of September, up by 258,505 shares over the quarter. On the other hand,, D.E Shaw & Co. reduced its holding in Under Armour by 63,054 shares to 1.14 million shares worth $38.8 million. For the quarter ending September, the company reported a net profit margin of 8.7% which was an improvement from 5.87% registered a year earlier. Under Armour Inc (NYSE:UA.C) also posted EPS of $0.29, beating analysts’ estimates of $0.25, while revenue of $1.47 billion was above the consensus estimate of $1.45 billion. The hedge funds that we track became less bullish on the stock, with their number falling to 28 from 31 during the third quarter, while the total value of their holdings also declined to $528 million from $573 million quarter over quarter.
During the third quarter, CQS Cayman increased its stake in BHP Billiton Limited (ADR) (NYSE:BHP) by 445% to 513,170 shares worth $17.8 million. Stanley Druckenmiller’s Duquesne Family Office initiated a new position in the stock and held 325,000 shares worth $11 million at the end of September. The stock of the $89 billion company has a dividend yield of 1.69% and the stock returned a whopping 48% over the last year as metal prices increased. At the end of third quarter, 19 funds from our database held shares of BHP Billiton Limited (ADR) (NYSE:BHP) worth $253 million, versus 17 funds holding $266 million worth of stock at the end of June.