Biggest Q2 Moves Completed by Hedge Fund Run by Ex-Bear Stearns Employees

Gabalex Capital Adds Apple Inc. (NASDAQ:AAPL) Stake to its Portfolio

 – Shares Owned by Gabalex Capital Management (as of June 30): 50,000

 – Value of Gabalex Capital Management’s Holding (as of June 30): $4.78 Million

The long/short equity hedge fund snapped up a new stake of 50,000 shares of Apple Inc. (NASDAQ:AAPL) during the April-to-June period, which was valued at $4.78 million on June 30. The new holding was the smallest position in Gabalex Capital’s equity portfolio at the end of June, accounting for 1.7% of its value. At an employee meeting in late-July, Tim Cook, the CEO of the world’s most valuable company, announced that the iPhone-maker had sold more than one billion iPhones throughout its history. Having such an immense installed userbase (though obviously not all of those phones are still in use), Apple appears to be on track to make its services unit the size of a Fortune 100 company by 2017. The business unit comprises its mobile payment service Apple Pay, streaming music service Apple Music, and cloud hosting service iCloud. Apple’s services revenue jumped by 19% year-over-year to approximately $6 billion in its latest fiscal quarter, with App Store sales growing by a record 37% year-over-year. Apple shares are up by a little less than 1% year-to-date. Christopher R. Hansen’s Valiant Capital owns 999,800 shares of Apple Inc. (NASDAQ:AAPL) as of June 30.

Gabalex Capital Boosts Position in Honeywell International Inc. (NYSE:HON)

 – Shares Owned by Gabalex Capital Management (as of June 30): 200,000

 – Value of Gabalex Capital Management’s Holding (as of June 30): $23.26 Million

Gabalex Capital upped its position in Honeywell International Inc. (NYSE:HON) by 150,000 shares during the second quarter to 200,000 shares valued at $23.26 million on June 30. The shares of the industrial conglomerate are 12% in the green year-to-date. Earlier this year, Honeywell decided to abandon its $90 billion pursuit of industrial peer United Technologies Corporation (NYSE:UTX) after facing strong opposition from the target’s management, antitrust regulators, as well as major customers. Instead, the bidder’s Board decided to authorize the repurchase of up to $5 billion worth of shares. In late-July, analysts at Barclays upped their price target on Honeywell to $131 from $127 and reiterated their ‘Overweight’ rating on the stock, citing a strong second quarter earnings report, higher margin expectations in the second-half of 2016, and the positive impact of share buybacks. Stephen J. Errico’s Locust Wood Capital Advisors has 277,319 shares of Honeywell International Inc. (NYSE:HON) among its holdings as of the end of the second quarter.

Gabalex Capital Trims W. W. Grainger Inc. (NYSE:GWW) Stake

 – Shares Owned by Gabalex Capital Management (as of June 30): 120,000

 – Value of Gabalex Capital Management’s Holding (as of June 30): $27.27 Million

Gabalex Capital Management trimmed its equity stake in W. W. Grainger Inc. (NYSE:GWW) by 30,000 shares during the three months ended June 30, ending the second quarter with 120,000 shares valued at $27.27 million. The broad-line distributor of maintenance, repair and operating (MRO) supplies has seen its market capitalization jump by 7% since the beginning of 2016. The company’s sales for the second quarter increased by 2% year-over-year to $2.6 billion. W. W. Grainger’s Canadian business continued to be impacted by low crude oil prices, as well as the fires in Fort McMurray and foreign currency headwinds. The company’s second quarter net earnings were $173 million, down by 22% year-over-year. William Von Mueffling’s Cantillon Capital Management owned 475,061 shares of W. W. Grainger Inc. (NYSE:GWW) at the end of March.

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