In this article, we will take a look at the top 10 stock picks of Mark Lee’s Mountaineer Partners.
In addition to the top 10 stock picks of Mark Lee’s Mountaineer Partners that are identified in this article, the fund held the stocks of several famous corporations by the end of the second quarter of 2021, namely PROG Holdings Inc (NYSE:PRG), BorgWarner Inc. (NYSE:BWA), and Vornado Realty Trust (NYSE:VNO).
Our Methodology
The top 10 stock picks of Mark Lee’s Mountaineer Partners Management were picked on the basis of their highest positions in the hedge fund’s 13F holdings. In order to compile the top 10 stock picks of Mark Lee’s Mountaineer Partners, we picked the following holdings of Mountaineer Partners Management from the fund’s Q2 portfolio.
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Top 10 Stock Picks of Mark Lee’s Mountaineer Partners
10. Allegheny Technologies Incorporated (NYSE:ATI)
Mountaineer Partners Management’s Stake Value: $9.108 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 6.63%
Number of Hedge Fund Holders as of Q2 2021: 32
Headquartered in Pittsburgh, Pennsylvania, Allegheny Technologies Incorporated (NYSE: ATI) is a specialty metals company. By the end of Q2 2021, Mountaineer Partners Management held 436,839 shares of the company which have a combined value of over $9 million. Allegheny Technologies Incorporated (NYSE: ATI) is, therefore, one of the top 10 stock picks of Mark Lee’s Mountaineer Partners Management.
Ken Fisher’s Fisher Asset Management has the most shares in Allegheny Technologies Incorporated (NYSE: ATI); the fund held 2,435,145 shares of the company at the end of Q3 2021 which have a combined worth of roughly $40.496 million.
On October 28 this year, Allegheny Technologies Incorporated (NYSE: ATI) announced Q3 revenues of $726 million, beating estimates of $668.52 million by $57.48 million. The revenue showed year-over-year growth of 21.4%. Moreover, the EPS was announced to be $0.35, which beat consensus by $0.38.
9. FirstEnergy Corp. (NYSE:FE)
Mountaineer Partners Management’s Stake Value: $9.578 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 6.97%
Number of Hedge Fund Holders as of Q2 2021: 36
Founded in 1997, FirstEnergy Corp. (NYSE: FE) is an electric utility company and is headquartered in Akron, Ohio. In addition to electricity generation, the company transmits and distributes electricity, and also provides energy management services. Mountaineer Partners Management held 257,400 shares of the company by the end of the second quarter of 2021, which amount to over $9.5 million.
On October 28, FirstEnergy Corp. (NYSE: FE) reported its Q3 2021 revenue as $3.1 billion, missing consensus by $10 million. Following this, on November 2, Neil Kalton, an analyst at Wells Fargo, upgraded FirstEnergy Corp. (NYSE: FE) to “Equal-Weight” from “Underweight” and raised the previous price target to $42 from $40.
Along with the top 10 stock picks of Mark Lee’s Mountaineer Partners Management discussed in the article, the fund held shares in PROG Holdings Inc (NYSE: PRG), BorgWarner Inc. (NYSE: BWA), and Vornado Realty Trust (NYSE: VNO) by the end of Q2 2021.
8. The Middleby Corporation (NASDAQ:MIDD)
Mountaineer Partners Management’s Stake Value: $9.876 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 7.19%
Number of Hedge Fund Holders as of Q2 2021: 35
The Middleby Corporation (NASDAQ: MIDD), headquartered in Elgin, Illinois, manufactures cooking equipment and appliances for both commercial and residential use. The company specializes in equipment for producing food and beverages, and refrigeration equipment.
As of Q2 2021, Mountaineer Partners Management held 57,000 shares in the company, making it one of the top 10 stock picks of Mark Lee’s Mountaineer Partners Management. On November 15, Timothy Thein, an analyst at Citigroup Inc., raised the firm’s price target on The Middleby Corporation (NASDAQ: MIDD) to $215 from its previous value of $200 and maintained a “Buy” rating on the shares.
7. BWX Technologies Inc (NYSE:BWXT)
Mountaineer Partners Management’s Stake Value: $10.412million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 7.58%
Number of Hedge Fund Holders as of Q2 2021: 20
Headquartered in Lynchburg, Virginia, BWX Technologies Inc (NYSE: BWXT) refines fuel and nuclear components. The company provides research reactor fuel elements to domestic educational institutes as well as national laboratories. Mountaineer Partners Management held 179,150 shares of BWX Technologies Inc (NYSE: BWXT) by the end of the second quarter of 2021, making it one of the top 10 stock picks of Mark Lee’s Mountaineer Partners Management. Moreover, Mountaineer Partners Management has increased its stakes in BWX Technologies Inc (NYSE: BWXT) by 11% during the second quarter of 2021 as compared to Q1 2021.
On November 1, BWX Technologies Inc (NYSE: BWXT) reported its revenue for Q3 2021 as $499 million, missing the consensus of $535.18 million by $36.18 million. Consequently, on November 2, Michael Ciarmoli, an analyst at Truist Securities, lowered the price target on BWX Technologies Inc (NYSE: BWXT) to $70 from $77 yet kept a “Buy” rating on the shares. On the same day, Tate Sullivan, an analyst at Maxim Group LLC, lowered the firm’s price target to $77 from $80, maintaining a “Buy” rating on the shares.
Upslope Capital Management, an investment management firm, published its third-quarter 2021 investor letter in which it shared its stance about BWX Technologies Inc (NYSE: BWXT). Here is what the firm had to say about BWX Technologies Inc (NYSE: BWXT) in its Q3 2021 investor letter:
“BWX Technologies designs and produces nuclear reactors, components and fuel, primarily for the U.S. Government and Navy (and, more recently, NASA). The company is the sole supplier for its Naval products (~75% of sales), which are used for the power and propulsion of all of the Navy’s aircraft carriers and submarines. With nuclear subs (aka “boomers”) forming the backbone of the “Sea” leg of the Nuclear Triad, BWX plays a vital and sensitive role supporting the national security of the United States. Of course, BWX is exceptionally well-positioned should the saber-rattling vis-à-vis China continue. The recent Aukus security pact, which may eventually benefit BWX, illustrates the urgent and strategic importance of maintaining a modern nuclear-powered sub fleet.
Even if relations with China stabilize (and hopefully they do), BWX shares seem poised to outperform. After four years of essentially going nowhere, the stock currently trades near the low-end of its historical valuation range – just over 13x EBITDA vs. typical range of 13-16x. With a literal monopoly position (albeit against a sole purchaser), BWX has historically generated modest top-line growth with attractive returns on capital (mid-20s). Given the stability of the business and its competitive position, as well as the current geopolitical backdrop, current valuation seems very reasonable…” (Click here to see the full text)
6. Vishay Intertechnology (NYSE:VSH)
Mountaineer Partners Management’s Stake Value: $10.769 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 7.84%
Number of Hedge Fund Holders as of Q2 2021: 29
Vishay Intertechnology (NYSE: VSH), founded in 1962 by Felix Zandman, produces semiconductors and other electronic components. The company is headquartered in Malvern, Pennsylvania. Mountaineer Partners Management held 477,532 shares of the company by the end of Q2 2021. Moreover, the fund has increased its stakes in Vishay Intertechnology (NYSE: VSH) by 9% during the second quarter of 2021 as compared to Q1 2021.
On October 14, Karl Ackerman, an analyst at Cowen Inc., decreased the price target on Vishay Intertechnology (NYSE: VSH) to $22 from $27 and maintained a “Market Perform” rating on the stock. On November 3, Vishay Intertechnology (NYSE: VSH) reported its Q3 2021 revenue of $813.663 million, which missed the estimate of $832.81 million by $19.147 million.
Along with the top 10 stock picks of Mark Lee’s Mountaineer Partners Management discussed in this article, the fund also held shares in PROG Holdings Inc (NYSE: PRG), BorgWarner Inc. (NYSE: BWA), and Vornado Realty Trust (NYSE: VNO) by the end of Q2 2021.
5. Olin Corporation (NYSE:OLN)
Mountaineer Partners Management’s Stake Value: $10.825 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 7.88%
Number of Hedge Fund Holders as of Q2 2021: 37
Olin Corporation (NYSE: OLN), headquartered in Clayton, Missouri, is a manufacturer of chemical products and ammunition. The company provides its products to the United States government.
Mountaineer Partners Management held 233,987 shares in Olin Corporation (NYSE: OLN) by the end of Q2 2021, which had a combined worth of over $10 million. Scott Ferguson’s Sachem Head Capital held the largest stake in the company as of the end of Q3 2021, with 11,950,000 shares worth over $576 million.
On October 21, Olin Corporation (NYSE: OLN) reported its Q3 revenue of $2.34 billion, falling short of the consensus by $10 million. However, on October 25, P.J. Juvekar, an analyst at Citigroup Inc., raised the firm’s price target on Olin Corporation (NYSE: OLN) to $66 from $64 and maintained a “Buy” rating on the shares. The same day, Michael Sison, an analyst at Wells Fargo, also raised the firm’s price target on Olin Corporation (NYSE: OLN) to $75 from $69 and maintained an “Overweight” rating on the shares.
4. Caleres Inc (NYSE:CAL)
Mountaineer Partners Management’s Stake Value: $11.119 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 8.09%
Number of Hedge Fund Holders as of Q2 2021: 18
Caleres Inc (NYSE: CAL) is a footwear company that owns brands such as Fergie footwear, Dr. Scholl’s Shoes, Bzees, and Franco Sarto. The company is headquartered in Clayton, Missouri, and was founded in 1875.
On November 19, the company announced its Q3 revenue of $784.16 million, which demonstrated a year-over-year growth of 21.1%, and beat the estimated revenue by $30.48 million. Similarly, the Q2 2021 EPS was reported as $1.54, which beat the estimates by $0.39.
Mountaineer Partners Management held 407,439 shares of the company by the end of Q2 2021, which had a combined worth of over $11 million. The largest stake in the company as of the end of the third quarter of 2021 was held by George Mccabe’s Portolan Capital Management, which held 597,952 shares with a total value of over $13 million.
3. Constellium SE (NYSE:CSTM)
Mountaineer Partners Management’s Stake Value: $11.242 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 8.18%
Number of Hedge Fund Holders as of Q2 2021: 28
Constellium SE (NYSE: CSTM) manufactures and distributes rolled aluminum products to its clients around the globe. Mountaineer Partners Management held 593,230 shares of the company as of Q2 2021, which were worth over $11 million. The institutional investor with the largest stake in the company as of the end of the third quarter of 2021 was Jared Nussbaum’s Nut Tree Capital with 3,300,000 shares that had a combined worth of over $61 million.
On September 9, Emily Chieng, an analyst at Goldman Sachs, initiated the coverage of Constellium SE (NYSE: CSTM) with a “Buy” rating and set a 12-month price target of $25.
ClearBridge Investments, an investment management firm, published its “Small Cap Value Strategy” Q2 2021 investor letter in which it shared some insights about Constellium SE (NYSE: CSTM). Here is what the firm said about Constellium SE (NYSE: CSTM) in its Q2 2021 investor letter:
“We continue to find companies we believe fit this description at reasonable prices, such as Constellium, a new position in the second quarter. Constellium is an aluminum processor with a history of excess returns on capital above cost that has lagged during a major capacity increase to serve the auto industry, which should see strong demand given aluminum’s favorable environmental characteristics relative to steel.”
2. Eagle Materials, Inc. (NYSE:EXP)
Mountaineer Partners Management’s Stake Value: $11.298 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 8.22%
Number of Hedge Fund Holders as of Q2 2021: 36
Headquartered in Dallas, Texas, Eagle Materials, Inc. (NYSE: EXP) manufactures building materials such as concrete, gypsum, and cement. 79,500 of its shares were held by Mountaineer Partners Management by the end of the second quarter of 2021. The fund newly acquired these shares in Eagle Materials, Inc. (NYSE: EXP) during the second quarter of 2021.
On October 26, Anthony Pettinari, an analyst at Citigroup Inc., raised the firm’s price target on the company from $167 to $170 and maintained the previously set “Buy” rating on its shares. On October 28, Eagle Materials, Inc. (NYSE: EXP) announced its Q2 revenue as $510 million, beating estimates by $4.13 million. The Q2 2021 revenue demonstrated a year-over-year growth of 13.9%.
L1 Capital, an investment management firm, published its ‘L1 Capital International Fund’ first quarter 2021 investor letter in which it mentioned Eagle Materials, Inc. (NYSE: EXP). Here is what the firm stated about Eagle Materials, Inc. (NYSE: EXP) in its Q1 2021 investor letter:
“Contributors to the gains were broad based, with the decision to selectively increase exposure to more cyclical sectors such as U.S. housing delivering strong returns. Eagle Materials, a high quality but below the radar building products company, was featured in the December 2020 quarterly report. Pleasingly, the market began to recognise the quality of this business and its strong cashflow and earnings outlook. Its share price increased by 33% during the March 2021 quarter.”
1. Spirit AeroSystems Holdings, Inc. (NYSE:SPR)
Mountaineer Partners Management’s Stake Value: $11.864 million
Percentage of Mountaineer Partners Management’s 13F Portfolio: 8.63%
Number of Hedge Fund Holders as of Q2 2021: 35
Spirit AeroSystems Holdings, Inc. (NYSE: SPR) is the manufacturer of aerostructures such as components of the Boeing aircraft. The company was established in 2005 and is headquartered in Wichita, Kansas.
On November 3 this year, Spirit AeroSystems Holdings, Inc. (NYSE: SPR) announced its earnings. The company’s revenue for Q3 2021 was $980 million, which demonstrated year-over-year growth of 21.6% yet missed estimates by $30 million. Moreover, the EPS for Q3 2021 was reported to be -$1.09, which missed the estimated EPS by $0.39. Before this, on October 21, Ken Herbert, an analyst at RBC Capital, initiated the coverage of Spirit AeroSystems Holdings, Inc. (NYSE: SPR) with an “Outperform” rating and set a price target of $62 on its shares.
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Disclosure: None. Top 10 Stock Picks of Mark Lee’s Mountaineer Partners is originally published on Insider Monkey.
