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Top Five New Positions in Locust Wood’s Equity Portfolio

Stephen J. Ericco established Locust Wood Capital Advisers in 2002 after a long, successful career on Wall Street, which involved positions at Lehman Brothers, Paine Webber and Morgan Stanley. As of January-end the fund holds about $977 million worth of assets under its management. Deducing from the firm’s latest 13F filing, the portfolio turnover ratio stood at 35% for the first quarter as the fund initiated 27 new positions during the quarter. In this regard, we decided to take a look at the top new additions in Locust Wood’s equity portfolio.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here).

#5 Northstar Realty Finance Corp (NYSE:NRF)

– Shares Owned by Locust Wood Capital (as of March 31): 641,700

– Value of Holding (as of March 31): $8.42 Million

The newly initiated stake amassed 0.89% of Locust Wood’s portfolio. So far this year the stock price of the $2.35 billion commercial REIT has fallen by almost 23%. Northstar Realty Finance Corp (NYSE:NRF) offers a hefty 12% dividend yield, but investors have been shying away from holding the stock as memories from last year’s crash of the stock are still fresh. In late February the company hired a division of UBS Group to analyze if a recombination with NorthStar Asset Management Group Inc. would be a feasible option. The spinoff between the two took place in 2014. Ray Carroll‘s Breton Hill Capital also initiated a stake in Northstar Realty Finance Corp (NYSE:NRF) during the first quarter with 11,600 shares valued at $152,000.

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#4 Charter Communications, Inc. (NASDAQ:CHTR)

– Shares Owned by Locust Wood Capital (as of March 31): 42,300

– Value of Holding (as of March 31): $8.57 Million

Shares of the $24.5 billion cable company have rallied by nearly 11% year-to-date. Charter Communications, Inc. (NASDAQ:CHTR) has recently been given the conditional approval by Federal Communications Commission (FCC) to acquire Time Warner Cable in a $55 billion stock-and-cash deal, and Bright House Networks, which was valued at $10.4 billion. However, the financing costs related to the pending merger led the company to post wider-than-expected losses for the January-March quarter. More precisely, the company posted a loss of $1.68 per share, versus estimates of a loss of $1.35, although the revenue of $2.53 billion was significantly above the expected figure of $1.66 billion. With ownership of 10.33 million shares of Charter Communications, Inc. (NASDAQ:CHTR), legendary investor Warren Buffett‘s Berkshire Hathaway is the largest stockholder of the company among the funds in our database.

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