Was Magnolia Capital Fund Right to Bet on Rush Enterprises, Inc. (RUSHA), Alliance Resource Partners, L.P. (ARLP) & Two Other Stocks?

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Adam Peterson‘s Magnolia Capital Fund raised its equity portfolio to $170.61 million at the end of September, from $154.68 million at the end of June. The fund’s five holdings in companies that were worth at least $1 billion delivered a weighted average return of 14.43% in the third quarter, based on the size of those positions at the end of June. During the third quarter, the fund also made a number of changes to its holdings and in this article we’ll take a closer look at changes of the fund’s exposure to Rush Enterprises, Inc. (NASDAQ:RUSHA), Alliance Resource Partners, L.P. (NASDAQ:ARLP), Wells Fargo & Co (NYSE:WFC), and Alliance Holdings GP, L.P. (NASDAQ:AHGP).

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In Rush Enterprises, Inc. (NASDAQ:RUSHA), Magnolia Capital cut its stake by 38% to 933,307 shares worth $22.85 million during the third quarter, as the stock advanced by 13.6% in the same period. Overall, heading into the third quarter of 2016, 10 funds tracked by Insider Monkey held long positions in this stock, down by 17% over the quarter. The largest stake in Rush Enterprises, Inc. (NASDAQ:RUSHA) was held by Ancient Art (Teton Capital), which reported holding $39.2 million worth of stock as of the end of June. Other investors bullish on the company included First Pacific Advisors LLC, Prescott Group Capital Management, and Arrowstreet Capital.

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Another company in which Magnolia reduced its stake is Alliance Resource Partners, L.P. (NASDAQ:ARLP), whose stock gained 44.1% during the third quarter. Meanwhile, the fund unloaded 376,968 shares during the same period and reported a $31.82 million stake containing 1.43 million shares as of the end of September. Seven funds from our database held shares of Alliance Resource Partners, L.P. (NASDAQ:ARLP) at the end of June, including Bernard Selz’ Selz Capital, which held a $4 million position. Some other hedge funds and institutional investors with similar optimism contained Mitch Cantor’s Mountain Lake Investment Management, Jim Simons’s Renaissance Technologies and Robert Bishop’s Impala Asset Management.

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