Michael Hintze‘s CQS Cayman LP is a diversified fund with around $9 billion in assets under management and offices in London and Hong Kong with smaller outlets in the Channel Islands, the Cayman Islands and Switzerland. The fund has recently disclosed its 13F filing, revealing its equity portfolio for the end of the third quarter. The portfolio has a total value of around $1.68 billion, up from $1.62 billion a year ago. The investor mainly increased its exposure to companies, adding 58 new positions and raising its stakes in more than 30 stocks. In this article we will look at the top three long equity stakes in terms of value that were held by CQS Cayman at the end of September. The companies that represent these holdings are: Twenty-First Century Fox Inc (NASDAQ:FOX), Citigroup Inc (NYSE:C), and Foster Wheeler AG (NASDAQ:FWLT).
Fox Still the Largest Stake Despite Decrease
The largest position is represented by Twenty-First Century Fox Inc (NASDAQ:FOX), which was the largest holding since the third quarter of last year, when the fund first initiated a stake. The fund has been increasing its position steadily up until the third quarter, when it reduced its exposure by 725,900 shares. In this way, it currently owns around 4.77 million shares of the company, which have a total value of $158.94 million and amass 9.44% of the equity portfolio. Aside from CQS Cayman, another investor in Twenty-First Century Fox Inc (NASDAQ:FOX) is Donald Yacktman’s Yacktman Asset Management, which held around 18.70 million shares at the end of June. Boykin Curry‘s Eagle Capital Management held around 20.66 million shares. Both Yacktman and Eagle Capital raised their positions during the second quarter, and have not yet disclosed their stakes for the end of the third quarter.
Twenty-First Century Fox Inc (NASDAQ:FOX) has been on the radars throughout the third quarter in connection with its previous intention to acquire Time Warner Inc (NYSE:TWX). Fox made a proposal to purchase Time Warner Inc (NYSE:TWX) in June and officially confirmed it in July. However, in August the company said that it has withdrawn its proposal, since Time Warner Inc (NYSE:TWX) refused to engage in any discussions on the matter. Nevertheless, in August, the company’s board authorized a $6 billion stock buyback program to be completed within the next year. The stock of Twenty-First Century Fox Inc (NASDAQ:FOX) remained basically flat since CQS Cayman initiated a stake, and has declined by around 4% since the beginning of the year, with a big slump coming on the back of the Time Warner bid withdrawal announcement.
Insiders have not made any transactions with Twenty-First Century Fox Inc (NASDAQ:FOX) this year. However, at the end of 2013, the co-Chief Operating Officer, James Murdoch (the son of Fox’s CEO Rupert Murdoch) sold 455,000 shares, cutting his stake to around 2.0 million shares.
Loves One Financial and One Engineering Stock
On the second spot stands Citigroup Inc (NYSE:C). While it is the second-largest holding which consists of common stock shares, it is the 11th largest overall, being outrun by several debt holdings in different companies. The fund made no changes to the stake during the third quarter and reported ownership of 672,900 shares, worth $34.87 million, up from $31.69 million at the end of the second quarter. The stock of Citigroup Inc (NYSE:C) appreciated by around 11% during the third quarter, while since the beginning of the year it picked up by around 1%. CQS Cayman initiated a stake in Citigroup during the fourth quarter of 2013, and held initially 381,000 shares. During the first and second quarter the fund raised its exposure to the company, while Citigroup Inc (NYSE:C) reported financial results above the estimates. For the first and second quarters of 2014, Citigroup’s EPS amounted to $1.30 and $1.24 respectively, beating the estimates of $1.16 and $1.08, while revenue amounted to $20.1 billion and $19.3 billion, up from the consensus estimates of $19.5 billion and $18.9 billion.
Analysts are also optimistic about the stock, the consensus rating being ‘Buy’ and the average target price reaching $57 per share. Moreover, Citigroup Inc (NYSE:C) is backed by many notorious investors such as Leon Cooperman, whose fund Omega Advisors owns around 5.3 million shares as of the end of June.
Foster Wheeler AG (NASDAQ:FWLT) is the third-largest equity position in our list and the 12th-largest overall. CQS Cayman also left the position unchanged holding 944,200 shares, worth $30.05 million, which represent around 1.80% of the total equity portfolio. Foster Wheeler AG (NASDAQ:FWLT) was a new position in the fund’s equity portfolio in the previous 13F filing. The stock lost around 7% during the third quarter, while over the last year it appreciated by some 20%. Israel Englander‘s Catapult Capital Management is also one of the shareholders of the company, holding around 1.02 million shares as of the end of June, while Kerr Neilson‘s Platinum Asset Management owns 9.34 million shares as of the end of the second quarter. However, both funds reduced their exposure to the company during the second quarter.
Foster Wheeler AG (NASDAQ:FWLT) is an engineering and construction company which is engaged in supplying of engineering, construction and project management services. Earlier this year, the company acquired MDM Engineering Group Limited through an indirect wholly-owned subsidiary and won several important contracts. Analysts currently advise investors holding the stock, while the average target price amounts to around $32.70. The stock trails a P/E of around 27.00, which is below the industry average of 30.00.
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