Donald Chiboucis’ Columbus Circle Investors is a hedge fund established in 1975 and currently holds around $16 billion in Assets Under Management. The firm’s investment philosophy is Positive Momentum & Positive Surprise and their target is investing in good companies which are exceeding expectations of the investors. The firm is especially successful in picking Small Cap and SMID cap stocks, although the largest portion of its assets is dedicated towards large-cap stocks. Their small cap portfolio has returned 14.4% annually (net of fees) during the last ten years and has beaten the annual return of Russell 2000 Growth index by 7 percentage points.
Our studies have shown that hedge funds’ small cap picks are more successful than their large cap picks when it comes to outperforming the market. Hedge funds are managed by the most skilled and experienced investment analysts, but they charge 2% fixed fee and an additional 20% of any profits earned. This cuts out a significant part of the profits that hedge funds earn from their investors. To use the best investment ideas of hedge funds and not paying any fees we have developed a small-cap strategy which has delivered around 80 basis points in monthly alpha during the last 13-year period (read the details here) and returned 134% in the last 2.5 years, beating the market by some 80 percentage points.
Columbus Circle Investors has recently disclosed its 13F portfolio for the first quarter of 2015, valued at $14.7 billion. Apple Inc. (NASDAQ:AAPL), Gilead Sciences, Inc. (NASDAQ:GILD), PPG Industries, Inc. (NYSE:PPG), McKesson Corporation (NYSE:MCK) and Facebook Inc (NASDAQ:FB) are among the top holdings of Columbus Circle Investors as of the end of the first quarter of 2015.
The largest holding of Columbus Circle Investors is represented by Apple Inc. (NASDAQ:AAPL) in which the fund owns 4.88 million shares, valued at $607.57 million. Apple Inc. (NASDAQ:AAPL) has recently announced a revenue of $58.0 billion and net profit of $13.6 billion for its second fiscal quarter of 2015, which is significantly above $45.6 billion in revenue and earnings of $10.2 billion for the same period of last year. Moreover, Apple, which owns one of the most profitable businesses ever, announced a dividend of $0.52 per share, payable on May 14, 2015. The company has returned $112 billion to shareholders, including $80 billion in share repurchases in the last 2.5 years and the board has further raised the buyback to $140 billion from the $90 billion level.
In the previous round of 13F filings, Apple Inc. (NASDAQ:AAPL) ranked as the most popular stock among more than 700 funds that we track. Taking into account the company’s strong financial results and the stock’s 13% growth in the first three months of 2015, the probability is very high that Apple will stay at the top as the most popular stock at the end of March. So far, two investors already expressed their bullish sentiment regarding Apple. In its recent letter to investors, David Einhorn of Greenlight Capital said that “AAPL is a superior company that merits a premium multiple” and Carl Icahn has tweeted that Apple Inc. (NASDAQ:AAPL) is “still undervalued and misunderstood.”
Columbus Circle Investors had $409.03 million invested in Gilead Sciences, Inc. (NASDAQ:GILD) at the end of first quarter of 2015, the stake containing 4.17 million shares. Gilead Sciences, Inc. (NASDAQ:GILD) reported revenue of $7.4 billion and net income of $4.3 billion for the first quarter of 2015. This represents a 52% increase in revenue and a 95% increase in net income in comparison with the same period of 2014. One of the main impacts on Gilead Sciences, Inc. (NASDAQ:GILD)’s earnings jump was the company’s hepatitis C new drug Harvoni, which had sales of almost $3.60 billion in the first quarter. Amid a biotech bubble, Gilead is considered a safe bet on the industry, which is confirmed by the fact that it was the most popular biotech stock among billionaire investors from our database with David Shaw, Israel Englander, and Julian Robertson disclosing substantial long positions as of the end of 2014.
PPG Industries, Inc. (NYSE:PPG) represents the third largest investment of Columbus Circle Investors, with 1.50 million shares worth $338 million. PPG Industries, Inc. (NYSE:PPG) is a supplier of coatings, optical and specialty materials and glass products. During the last 6 years, PPG Industries, Inc. (NYSE:PPG) has completed three large scale acquisitions, including SigmaKalon Group of companies, North American house-paint business of AkzoNobel and Mexican Consorcio Comex. After these acquisitions, the company’s margins have dropped in recent years, but analysts are expecting long-term gains from these moves. The company’s sales from continuing operations for the first quarter of 2015 increased by 1% on the year to $3.66 billion (excluding acquisitions). Daniel S. Och’s OZ Management and Ken Griffin’s Citadel Investment Group are other prominent shareholders of PPG Industries, Inc. (NYSE:PPG).
Columbus Circle Investors also owns a $309.78 million stake in McKesson Corporation (NYSE:MCK), which contains 1.37 million shares, down by 8% on the quarter. McKesson Corporation (NYSE:MCK) is one of the three major players of the U.S. medical distribution market, sporting a market cap of $53 billion. The company acquired Celesio, Rite Aid and expanded its distribution agreement with Omnicare in 2014 and in the near future the deals are expected to pay off in cost synergies. Aside from Columbus, other funds that hold long positions in McKesson Corporation (NYSE:MCK) include Larry Robbins’ Glenview Capital, Samuel Isaly’s Orbimed Advisors, and Leon Cooperman’s Omega Advisors.
Finally, on the fifth spot is Facebook Inc (NASDAQ:FB), in which Columbus owns 3.51 million shares valued at $288.42 million. Donald Chiboucis reduced his holding in the company by 3% during the first quarter of 2015. In its latest financial results, Facebook Inc (NASDAQ:FB) posted a 40% annual jump in revenue for the first quarter to $3.54 billion, but at the same time, its expenses surged by more than 80% on the year, which drove the earnings lower in year-on-year terms to $0.18 per share, from $0.25. At of the end of 2014, billionaire Stephen Mandel‘s Lone Pine Capital was the largest shareholder of Facebook Inc (NASDAQ:FB) among the funds we track with 13.50 million shares, followed by Philippe Laffont’s Coatue Management and Citadel Investment Group.
Disclosure: None
