In this article, we present the list of top 10 stock picks of David Rodriguez-Fraile’s BlueMar Capital at the end of the second quarter. If you are short on time and want to skip details about the fund’s overall portfolio or want to know only its top five picks, you can skip ahead and read 5 Best Stocks to Buy According to David Rodriguez-Fraile’s BlueMar Capital.
BlueMar Capital is a secretive hedge fund that was founded in 2011 by David Rodriguez-Fraile. The fund is based in Florida. Not much is known about BlueMar Capital or its founder Mr. Rodriguez-Fraile. However, the fund’s CFO and COO, Eric Adam Bittelman, held a similar position at OrbiMed Advisors between 2000 and 2011. Mr. Bittelman holds an undergraduate degree in economics from Stony Brook University and an MBA with a specialization in accounting from Baruch College. After finishing his MBA, Mr. Bittelman joined Ernst & Young as an auditor and consultant and held that position between 1992 and 2000.
BlueMar Capital’s Portfolio
According to BlueMar Capital’s last submitted 13F filing, the aggregate value of its 13F holdings at the end of June stood at $149 million, a 37% drop from $236 million at the end of March. BlueMar Capital’s portfolio over the years has had a high concentration of stocks from the financial sector, and Q2 2022 was no different. At the end of June, stocks from the financial industry accounted for over 72% of the aggregate value of BlueMar Capital’s 13F portfolio. During the second quarter, the fund sold its entire stake in 5 companies and made additional purchases in four stocks but didn’t initiate any new stake.
Photo by Marga Santoso on Unsplash
Our Methodology
At Insider Monkey, we cover the portfolios of 895 hedge funds, closely tracking the stocks they buy and sell. We selected the ten stocks discussed in this article based on the 13F regulatory filing submitted by BlueMar Capital with the SEC for the quarter ending June 30. These are the top ten stocks in BlueMar’s portfolio as of the end of the second quarter.
10 Best Stocks to Buy According to David Rodriguez-Fraile’s BlueMar Capital
10. S&P Global Inc. (NYSE:SPGI)
BlueMar Capital’s Stake Value: $6,684,000
Percentage of BlueMar Capital’s 13F Portfolio: 4.48%
Number of Hedge Fund Holders: 84
BlueMar Capital initiated its stake in S&P Global Inc. (NYSE:SPGI) during the first quarter of this year but reduced it by 12% during Q2. S&P Global Inc.’s (NYSE:SPGI) stock has lost one-third of its value year-to-date, which might be why smart money investors have been bailing out of the stock in recent months. Among funds covered by Insider Monkey, 84 disclosed holding a stake S&P Global Inc. (NYSE:SPGI) at the end of Q2, compared to 100 at the end of Q1. Funds that dumped their entire stake in the company during the second quarter included Peter Muller’s PDT Partners and Matthew Tewksbury’s Stevens Capital Management.
The precipitous decline in the stock this year has helped it become attractive to dividend-focused investors. S&P Global Inc. (NYSE:SPGI) also recently upped its quarterly dividend by 10.5% to $0.85 per share, which translates into an annual dividend yield of 1.11% based on the stock’s last closing price.
On August 29, Oppenheimer analyst Owen Lau reiterated his ‘Outperform’ rating on the stock while upping his price target to $419 from $404, representing a potential upside of 37% from the stock’s last trading price.
9. Black Knight, Inc. (NYSE:BKI)
BlueMar Capital’s Stake Value: $7,710,000
Percentage of BlueMar Capital’s 13F Portfolio: 5.17%
Number of Hedge Fund Holders: 46
Black Knight, Inc. (NYSE:BKI) is an SaaS application provider to customers in the mortgage and home equity loans segment. It traces its roots back to 1962 when its earliest predecessor company Computing and Statistical Services (CSS) was founded. The company, in its present form, began trading on the NYSE as a separately traded public company in 2017 after Fidelity National Financial, Inc. (NYSE:FNF) spun it off. Since it began trading as a separate entity, shares of Black Knight, Inc. (NYSE:BKI) have appreciated close to 50%.
Earlier this year, the financial clearinghouse and operator of the largest exchanges in the world, Intercontinental Exchange, Inc. (NYSE:ICE), announced that it had entered into a definitive agreement to acquire Black Knight, Inc. (NYSE:BKI) for $13.1 billion or $85 per share. Since the announcement of the deal, it has run into several regulatory problems concerning antitrust laws. In June, Community Home Lenders Association (CHLA) published a letter addressing the Justice Department, asking it to undertake a comprehensive antitrust review of the proposed deal. Most market participants are skeptical that the deal would go through, which could be seen from the price at which Black Knight, Inc.’s (NYSE:BKI) stock is currently trading, a 24% discount to the offer price. Here’s what Madison Funds, a fund operated by Madison Asset Management, LLC, had to say about Black Knight, Inc. (NYSE:BKI) and the deal in its second quarter letter to investors of “Madison Mid Cap Fund”:
“Black Knight, Inc. (NYSE:BKI) is the largest provider of software for the mortgage servicing industry. In May, it announced an agreement to be acquired by Intercontinental Exchange at a substantial premium to its unaffected public market valuation. We believe the offer represents fair value for the company.”
8. Signature Bank (NASDAQ:SBNY)
BlueMar Capital’s Stake Value: $7,956,000
Percentage of BlueMar Capital’s 13F Portfolio: 5.34%
Number of Hedge Fund Holders: 38
With shares of Signature Bank (NASDAQ:SBNY) losing more than 50% of their value year to date, the popularity of the stock among smart money investors has also come crashing down. The number of hedge funds tracked by Insider Monkey that reported a stake in Signature Bank (NASDAQ:SBNY) fell to 38 at the end of Q2 from 51 at the end of Q1. Signature Bank (NASDAQ:SBNY) is a New York-based, full-service commercial bank that primarily serves the New York metropolitan area. However, some of its 38 private client offices are also located in the states of Connecticut, California and North Carolina.
On September 6, Signature Bank (NASDAQ:SBNY) issued a mid-quarter update for its fiscal year 2022 third quarter. In that update, the bank mentioned that its spot deposit balance had fallen by approximately $1.64 billion in the period between the end of the second quarter and September 2. A large part of this decline was attributed to the outflows in the digital asset banking department driven by the downturn in the cryptocurrency markets. The digital asset banking space cumulatively saw an outflow of $4.27 billion during that period. Excluding the outflow experienced by the digital asset banking department, Signature Bank’s (NASDAQ:SBNY) deposit balances grew by $2.64 billion quarter-to-date as of September 2. This increase in deposits was primarily led by the Specialized Mortgage Banking Solutions department.
7. Equitable Holdings, Inc. (NYSE:EQH)
BlueMar Capital’s Stake Value: $8,091,000
Percentage of BlueMar Capital’s 13F Portfolio: 5.43%
Number of Hedge Fund Holders: 38
BlueMar Capital first reported initiating a stake in Equitable Holdings, Inc. (NYSE:EQH) during the second quarter of 2020 through a regulatory filing. Since then, shares of the financial services company have appreciated by only 30-35% but have been far more resilient than most financial sector stocks amidst a massive decline in the broader markets over the past few quarters. Equitable Holdings, Inc. (NYSE:EQH) became a publicly traded company after parent Axa S.A. filed for an IPO for its US operations back in 2017.
Apart from providing a range of insurance and annuity products, Equitable Holdings, Inc. (NYSE:EQH) also provides investment management and research services. On August 17, Equitable Holdings, Inc. (NYSE:EQH) announced the acquisition of Pennsylvania-based registered investment adviser Penn Investment Advisors to expand the former’s wealth management business. Equitable Holdings, Inc.’s (NYSE:EQH) wealth management arm, Equitable Advisors, currently manages over $70 billion in assets and employs 4,200 finance professionals, while Penn Investment Advisors manages $600 million in assets for 950 clients. The terms of this deal were not announced during the announcement, but the deal is expected to close during the fourth quarter of this fiscal year.
6. Wyndham Hotels & Resorts, Inc. (NYSE:WH)
BlueMar Capital’s Stake Value: $9,024,000
Percentage of BlueMar Capital’s 13F Portfolio: 6.05%
Number of Hedge Fund Holders: 30
Wyndham Hotels & Resorts, Inc. (NYSE:WH) started trading independently in 2018 after Wyndham Worldwide split its businesses into two separate publicly traded companies – Wyndham Destinations and Wyndham Hotels & Resorts, Inc. (NYSE:WH). Wyndham Destinations, which basically comprises of the group’s timeshare properties business, changed its name to Travel + Leisure Co. (NYSE:TNL) last year after it acquired that brand from Meredith Corporation. Wyndham Hotels & Resorts, Inc. (NYSE:WH) is the group’s flagship business that operates its hotel franchising and hotel management businesses.
On September 8, Wyndham Hotels & Resorts, Inc. (NYSE:WH) announced the acquisition of Vienna House, a boutique hotel brand owned by Germany-based HR Group, for 44 million euros (approx. $43.4 million). Wyndham Hotels & Resorts, Inc. (NYSE:WH) currently manages around 9,000 hotels worldwide across 95 countries, and this acquisition will increase that tally by 40 hotels comprising more than 6,000 rooms. When the transaction closes, ‘Vienna House’ will change its name to ‘Vienna House by Wyndham.’
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Disclosure: None. 10 Best Stocks to Buy According to David Rodriguez-Fraile’s BlueMar Capital is originally published on Insider Monkey.
