AerCap Holdings N.V. (AER), American International Group Inc (AIG), More: 4 Stocks That Look Promising

Hedge funds had a pretty solid run for much of this year, generating positive returns for seven or eight consecutive months (depending on the source) before that streak came to an end in October. The third-quarter was a particularly strong one for the industry, as evidenced by our own data. 659 funds in our system which filed for the June 30 13F reporting period held long positions in at least 5 non-micro-cap stocks, and those funds’ long bets posted 8.3% gains in the third-quarter based on the size of their positions on June 30. That easily bested the performance of S&P 500 ETFs, which returned only 3.3% for the period. Where hedge funds tend to falter is on the other positions in their portfolios (options plays, bonds, etc.), which are there to limit downside risk, but also limit upside potential. That’s why we recommend investors consider hedge funds’ top long bets and share them with readers throughout the year. In this article, we’ll analyze the top picks and performance of Perry Capital.

Perry Capital, run by Goldman Sachs alumnus Richard Perry, is a New York-based hedge fund founded 28 years ago. The fund recently announced that it will end its operations amid huge losses. However, the hedge fund appears to be going out with a bang, as its stock picks returned 12.79% in the third quarter, when looking at its 7 long positions in $1 billion+ companies. In this article we’ll take a look at its holdings in Ally Financial Inc (NYSE:ALLY), AerCap Holdings N.V. (NYSE:AER), American International Group Inc (NYSE:AIG), and  Ball Corporation (NYSE:BLL) on June 30 and see how they performed.

Perry Capital trimmed its stake in Ally Financial Inc (NYSE:ALLY) by 30% in the second quarter, ending the period with about 15.76 million shares of the company. Ally Financial’s stock returned 14.6% in the third quarter. Cerberus Capital Management was the largest shareholder of Ally Financial Inc (NYSE:ALLY) in our system on June 30, with a stake worth $411.7 million reported as of the end of June. First Pacific Advisors LLC, Oaktree Capital Management, and Canyon Capital Advisors also held valuable positions in the company.

Perry Capital reported ownership of 5.92 million shares of AerCap Holdings N.V. (NYSE:AER) as of June 30. The aggregate value of this holding was about $199.02 million. The stock delivered a 14.6% return in the September quarter. Greenlight Capital held the most valuable stake in AerCap Holdings N.V. (NYSE:AER) among the funds in our database, which was worth $382.8 million at the end of the second quarter. Moreover, Omega Advisors, Highfields Capital Management, and Discovery Capital Management were also bullish on AerCap Holdings N.V. (NYSE:AER).

We’ll check out two more of the fund’s stock picks on the next page.

Part of its stake in American International Group Inc (NYSE:AIG) was unloaded by Perry Capital in the second quarter, as it sold off 29% of its shares. At the end of June, the beleaguered hedge fund had 3.7 million shares of the company, having a total value of $195.69 million. The stock returned 12.8% during the third quarter. At the end of the second quarter, a total of 85 of the hedge funds tracked by Insider Monkey were long this stock, a 10% drop from the previous quarter. Among these funds, Icahn Capital LP held the most valuable stake in American International Group Inc (NYSE:AIG), which was worth $2.41 billion at the end of the second quarter. On the second spot was First Pacific Advisors LLC which amassed $658.1 million worth of shares. Moreover, Paulson & Co, Kensico Capital, and First Eagle Investment Management were also bullish on American International Group Inc (NYSE:AIG).

Lastly, Perry Capital also sold some of is Ball Corporation (NYSE:BLL) position in the second quarter, trimming its stake in the company by 9%. However, the stock returned 13.5% in the third quarter, ranking as another winner during the period for the fund. Perry Capital had 2.69 million shares of the company on June 30 valued at about $194.46 million. Perry Capital was one of 42 hedge funds that we track which were long the stock at the end of June, up from 40 at the end of the previous quarter. When looking at the institutional investors followed by Insider Monkey, Doug Silverman and Alexander Klabin’s Senator Investment Group has the largest position in Ball Corporation (NYSE:BLL), worth close to $387 million, accounting for 6.2% of its total 13F portfolio. Coming in second is Corvex Capital, managed by Keith Meister, which holds a $250 million position; 3.4% of its 13F portfolio is allocated to the company.

Disclosure: None