Tricadia Capital Management, led by Michael Barnes and Arif Inayatullah, disclosed recently filed its latest 13F with the Securities and Exchange Commission for the reporting quarter ended September 30. The value of the fund’s equity portfolio was valued at $648.56 million at that time. Founded in 2003, New York-based Tricadia Capital has about $4 billion in assets under management. The fund had a strong focus on finance and consumer stocks during the last quarter. In this article, we will talk about Tricadia Capital’s top stocks for the third quarter.
We believe that paying attention to hedge funds’ moves is important. Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 53 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. a 48.7% gain for the S&P 500 Index (see the details here). That’s why we believe investors should pay attention to what hedge funds are buying.
#5 Constellation Brands Inc. (NYSE:STZ)
Shares held (as of September 30): 340,000
Total Value (as of September 30): $42.57 million
Percent of Portfolio (as of September 30): 6.56%
Constellation Brands Inc. (NYSE:STZ) is a $26.53-billion market cap producer and marketer of beer, wine and spirits. Tricadia Capital likes the company, in which it increased its position by more than 18% over the quarter. Constellation Brands Inc. (NYSE:STZ) posted impressive financial results for the second quarter fiscal 2016, as the company’s income increased by 54% year-over-year to $302 million, or $1.49 per share. Its sales in the quarter rose by 8% to $1.73 billion. Constellation Brands’ stock has been performing well, with a gain of 35.87% year-to-date. Kensico Capital, run by Michael Lowenstein, held 6.64 million shares of the company as of the end of June.
#4 Webster Financial Corporation (NYSE:WBS)
Shares held (as of September 30): 1,262,087
Total Value (as of September 30): $44.97 million
Percent of Portfolio (as of September 30): 6.93%
Webster Financial Corporation (NYSE:WBS) represents Tricadia Capital’s fourth top holding, despite the investor reduced its position in the company by more than 30% over the quarter. Webster Financial Corporation (NYSE:WBS), the holding company for Webster Bank, reported solid results for the third quarter. Its income available to common shareholders rose to $49.5 million, or $0.54 per share, compared to $47.8 million, or $0.53 per share, for the same quarter a year ago. The company collected $17.6 billion in deposits, up from $15.5 billion a year ago. Webster Financial Corporation (NYSE:WBS)’s stock has surged by 12.32% year-to-date. Another investor betting big on Webster Financial is Ricky Sandler’s Eminence Capital, which reported holding 2.96 million shares at the end of June.
We will talk about three top Tricadia Capital’s holdings on the next page.