This article discusses the top 4 stock picks of James Dinan’s York Capital Management at the end of June 2022. If you want to read about the fund’s history, the assets it invests in, its investment style and recent changes it has made to its portfolio, please go to 8 Best Stocks to Buy According to Billionaire James Dinan.
4. PGT Innovations, Inc. (NYSE:PGTI)
York Capital Management’s Stake Value: $6,019,000
Percentage of York Capital Management’s 13F Portfolio: 1.95%
Number of Hedge Fund Holders: 12
PGT Innovations, Inc. (NYSE:PGTI) was the third stock – apart from Diebold Nixdorf, Incorporated (NYSE:DBD) and NCR Corporation (NYSE:NCR) – that made its debut in York Capital Management’s 13F portfolio during the second quarter. Founded in 1980, PGT Innovations, Inc. (NYSE:PGTI) manufactures and sells impact-resistant aluminum frame windows and doors. Shares of PGT Innovations, Inc. (NYSE:PGTI) have been far more resilient than most industrial stocks amid a selloff in broader markets this year. They are trading at the same levels as they were at this time last year and also near the same levels they traded in Q3 2018 when 26 hedge funds among those we track disclosed having a stake in the company.
For its fiscal year 2022 second quarter, PGT Innovations, Inc. (NYSE:PGTI) reported non-GAAP earnings per share of $0.67 on revenue of $407 million, beating analysts’ consensus estimates by $0.22 and $42.27 million, respectively. Despite this, on August 15, analysts at JPMorgan Chase & Co. lowered their price target on the stock to $19 from $22, representing a potential downside of 5.8% from the stock’s last closing price.
3. Humacyte, Inc. (NASDAQ:HUMA)
York Capital Management’s Stake Value: $7,355,000
Percentage of York Capital Management’s 13F Portfolio: 2.39%
Number of Hedge Fund Holders: 9
Biotech firm Humacyte, Inc. (NASDAQ:HUMA) became a public company last year by merging with Alpha Healthcare Acquisition Corp., a SPAC, in a deal that valued the former at $1.1 billion. However, since becoming public Humacyte, Inc.’s (NASDAQ:HUMA) stock has been on a consistent downward path and has lost over 70% of its value in the last one year alone. Based in Durham, North Carolina, the company develops and manufactures implantable, off-the-shelf, and bioengineered human tissues for the treatment of diseases and conditions.
Analysts on Wall Street who track the stock have drastically divergent views on its trajectory. For example, BTIG Research’s analysts, who earlier had a price target of $12 on the stock, reduced it to $10 on July 15, which still represents a potential upside of over 150% from the stock’s current trading price. In comparison, analysts at Piper Sandler, who already had a low $4 price target on Humacyte, Inc.’s (NASDAQ:HUMA) stock, reduced it further to $3.5 on August 12, representing a potential downside of 11.4%.
2. Cedar Fair, LP (NYSE:FUN)
York Capital Management’s Stake Value: $26,576,000
Percentage of York Capital Management’s 13F Portfolio: 8.63%
Number of Hedge Fund Holders: 12
Amusement and water parks operator Cedar Fair, LP’s (NYSE:FUN) stock saw a huge bull run starting from late 2009 up until mid-2017, during which it multiplied seven times. However, it cooled off in the next three years and plunged heavily when the world went into lockdown in March 2020. Though it has recovered significantly since then, it is yet to touch the 2017 highs.
Last month, Deutsche Bank analyst Chris Woronka penned a note to clients after he and his team visited two Cedar Fair, LP’s (NYSE:FUN) sites and met the company’s management. In his note, Mr. Woronka wrote:
“Net, we continue to view FUN and SEAS as being well positioned to benefit from a healthy consumer wallet for out-of-home leisure experiences and anticipate that momentum should continue for the balance of the year. We view both of these stocks as being attractively valued and note that both are now actively returning capital to investors. At SIX, as we mentioned in our 2Q takeaways note, we acknowledge a lack of conviction in the premiumization strategy’s ability to succeed on the scale it needs to, but continue to think risk/ reward in the stock skews to the upside from here.”
On September 9, analysts at Rosenblatt Securities reiterated their ‘Neutral’ rating on Cedar Fair, LP’s (NYSE:FUN) stock while upping their price target on it to $41 from $40, representing a potential downside of 8.1% from the stock’s last trading price.
1. NextDecade Corporation (NASDAQ:NEXT)
York Capital Management’s Stake Value: $254,499,000
Percentage of York Capital Management’s 13F Portfolio: 82.73%
Number of Hedge Fund Holders: 8
York Capital Management disclosed a stake in NextDecade Corporation (NASDAQ:NEXT) for the first time in its 13F filing for the third quarter of 2017. At the end of June, not only was the energy company the fund’s top stock pick but also accounted for almost 83% of the aggregate value of York Capital Management’s entire 13F portfolio. NextDecade Corporation (NASDAQ:NEXT) has also been among the best performers amongst the fund’s stock picks, with the company’s shares surging by 165% in the last 12 months.
Despite the run-up in NextDecade Corporation’s (NASDAQ:NEXT) stock, it seems several fund managers don’t believe this run will continue. The number of funds covered by Insider Monkey that disclosed holdings in the company declined to 8 at the end of June from 14 at the end of March this year. Funds that sold their entire stake in NextDecade Corporation (NASDAQ:NEXT) during Q2 included Dmitry Balyasny’s Balyasny Asset Management and Ari Zweiman’s 683 Capital Partners. On September 15, NextDecade Corporation (NASDAQ:NEXT) announced a private placement of its common stock whereby it will sell shares worth $85 million to 10 institutional investors for $5.50 per share.
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