Wexford Capital Loves These Small-Cap Stocks ~ KB Home (KBH), Cedar Fair, L.P. (FUN)

Page 2 of 2

Wexford opened a number of new positions during the first quarter to shore up its portfolio and one of them was in the small-cap homebuilder KB Home (NYSE:KBH), with the new stake amounting to 322,000 shares valued at $5.19 million. KB Home (NYSE:KBH)based in Los Angeles, California and founded in 1957, has been having a tough year, losing 10.4%. Wexford appears to have chosen a good bounce-back candidate however and possibly bought in around the stock’s low point, as shares have rebounded to post gains of 7.5% over the last three months. For the first quarter, KB Home reported adjusted earnings per share of $0.07 which was well above analysts’ expectations of $0.02, while revenue for the last 12 months also increased by an impressive 29%. Analysts attribute the stronger performance to the company’s recently implemented strategy, which emphasizes increased profitability per unit and increased revenue per community, with those changes now beginning to bear fruit. Additionally, the change in geographical exposure and the macro economical climate are factors that might work as drivers for the shares and offset the negative effect of shrinking gross margins. Vollero Beach Capital Partners built a stake of 580,375 shares of KB Home (NYSE:KBH) during the first quarter, while the largest stakeholder among the hedge funds we follow is still Crispin Odey‘s Odey Asset Management Group, which owns 3.01 million shares as of March 31.

Lastly, Wexford increased its stake in amusement park operator Cedar Fair, L.P. (NYSE:FUN) by 2%, to 87,830 shares valued at $5.04 million. Ohio-based Cedar Fair, L.P. (NYSE:FUN) was another of the strong performers that helped Wexford to its big first quarter returns, with the stock posting gains of 22.3% year-to-date. The stock also ranks as a solid dividend stock, with a quarterly payment of $0.75 giving a dividend yield of 5.19%. Nor is there any reason to suspect that will change in the near future, as CEO Matt Ouimet has said that a dividend yield around 5% is sustainable. Moreover, Ouimet believes the summer season will be a strong period for Cedar Fair due to sales of season passes being above targets. With American households seemingly better off than they were a year ago, Ouimet believes this will lead to greater sales of products in the park as well. Remy Trafelet of Trafelet Capital also increased his stake in Cedar Fair, by 3% to a total of 505,985 shares, making him the largest shareholder in Cedar Fair, L.P. (NYSE:FUN) among the hedge funds we track. John Bader of Halcyon Asset Management also increased his position by 17% to 143,734 shares.

Disclosure: None

Page 2 of 2