In a newly amended filing with the Securities and Exchange Commission, Joe Huber‘s Huber Capital Management disclosed increasing its stake in specialty metals and plastics company A. M. Castle & Co (NYSE:CAS). The fund reported holding 2.57 million shares, up from 1.90 million shares disclosed a couple of weeks ago. Following the increase, the activist stake amasses 10.9% of the company’s outstanding stock, versus 8.1% held earlier.
Mr. Huber founded Los Angeles-based Huber Capital Management in 2007 after previously working as a principal and director of research at Hotchkis and Wiley Capital Management. Huber Capital operates several funds: the Small Cap Value Fund, Equity Income Fund, and Diversified Large Cap Value Fund. Small Cap Value returned on average 7.2% since its inception, beating its benchmark index Russell 2000 by some 2.0 percentage points. On the other hand, Equity Income Fund and Diversified Large Cap Value Fund underperformed in relation to the S&P 500 Index, with returns of around 15.5% and 5.70% respectively. Overall, Huber has around $3.9 billion in assets under management, including approximately $3.23 billion held in equities.
The latest move in A. M. Castle & Co (NYSE:CAS) comes only a couple of weeks after the fund raised its stake from 1.55 million shares reported in its last 13F filing. Even though the stake is activist by nature, Huber Capital stated that it has not acquired shares of the company in order to change or influence control. The stock of A. M. Castle lost around 78% over the last 52 weeks. The decline came amid a decline in revenue and net income that the company has posted for the last several quarters.
Another investor that is bullish on the $190 million company is William C. Martin of Raging Capital Management. The fund initiated a stake in A. M. Castle & Co (NYSE:CAS) during the last quarter of 2014 and disclosed holding 3.38 million shares in its latest 13F filing. On the other hand, Chuck Royce’s Royce & Associates cut its position by 34% to 1.16 million shares.
Nevertheless, even though Huber has raised its stake in A. M. Castle & Co (NYSE:CAS), the stake is far from being one of the largest holdings in the fund’s equity portfolio. In the last 13F filing, Mr. Huber’s fund reported a $230.29 million stake in CNO Financial Group Inc (NYSE:CNO) that amasses over 13.37 million shares. The company is a $3.30 billion holding company that operates in the life and health insurance segment. The stock of the company lost around 10% over the last 52 weeks. Huber Capital is the largest shareholder of CNO Financial Group Inc (NYSE:CNO) among funds that we track, as well as being the investor with the largest exposure to the company, its stake representing 7% of its equity portfolio. Billionaire Israel Englander’s Millennium Management is another investor bullish on CNO Financial Group Inc (NYSE:CNO), holding 4.16 million shares as of the end of 2014. Other funds among those that we track hold less significant positions in the company as the last round of 13F filings revealed.
Mr. Huber was also bullish on KBR, Inc. (NYSE:KBR), a $2.4 billion engineering and construction company which represents the second-largest holding in his equity portfolio. During the fourth quarter, Huber Capital raised its stake by 32% to 8.17 million shares, valued at $138.49 million. The fund raised its stake amid the company announcing some restructuring plans that also involve the separation of some non-core operations. Meanwhile, the restructuring charges have affected the company’s earnings for the last quarter of 2014, which amounted to a loss of $1.24 billion. KBR, Inc. (NYSE:KBR) still expects restructuring to affect the current year results, which are forecasted at between $1.07 and $1.22 per share for 2015. On the back of this news, the company’s stock lost around 9% on Friday. Nevertheless, KBR, Inc. (NYSE:KBR) gained the attention of some investors, such as Dmitry Balyasny of Balyasny Asset Management. Balyasny raised its stake by more than 870% during the October-December period to 10.74 million shares.
With a stake valued at $128.90 million, Carpenter Technology Corporation (NYSE:CRS) represents the third-largest position in terms of value from Huber Capital’s 13F portfolio. The stake has been slightly increased and contained 2.62 million shares at the end of 2014. The stock of the specialty metals manufacturer lost 28% in the last year, underperforming the industry average of -22.9%. Moreover, in January, Carpenter Technology Corporation (NYSE:CRS) has been downgraded by Cowen and Company to ‘Market Perform’ from ‘Outperform’ and Zacks cut its rating to ‘Underperform’ from ‘Neutral’. Billionaires Ken Griffin of Citadel Investment Group and Jim Simons of Renaissance Technologies are two other investors in Carpenter Technology Corporation (NYSE:CRS), but the positions account for only about 0.01% of each fund’s equity portfolio. Citadel disclosed ownership of some 220,700 shares and Renaissance’s stake amassed 117,500 shares as of the end of 2014.
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