ADT Corp (NYSE:ADT) took the top spot out of the 93 new purchases made, garnering a $3.5mm investment from Catapult. The fund wasn’t the only one to add ADT to its portfolio in the last quarter of 2012; it was one of the most popular new additions amongst the funds we track, with 57 claiming ownership in the fourth quarter. This reception is for good reason, as ADT is a significant leader in the home and small-business security market, assuming a quarter of the market share. ADT Corp (NYSE:ADT)’s latest quarterly report came at the end of January, outlining increases in net earnings, revenues from monitoring services, and operating margin. Steven Cohen of SAC Capital Advisors has over $13mm invested in ADT (read about the billionaire’s portfolio here).
Westlake Chemical Corporation (NYSE:WLK) was a huge winner for investors who bought in this time last year, up over 50% in the past twelve months. Catapult dedicated $60,000 less than ADT to WLK, but it still amounted to 1.75% of the fund’s AUM. The chemical manufacturer continues its trend of impressing on earnings (including a 13% beat last month) and has earned upgrades from UBS and JP Morgan since the start of this year. The start of March brought an announcement that WLK has agreed to acquire Compagnie de Saint-Gobain’s PVC pipe, fittings, and foundations business for $175M, giving Westlake Chemical Corporation (NYSE:WLK) an expanded presence in California and Kansas. Billionaire Glenn Russell Dubin of Highbridge Capital Management bought over half a million shares last quarter (take a look at the fund’s full holdings here).
OM Group, Inc. (NYSE:OMG) received slightly over $3.1mm from Catapult. The industrial growth company is well-diversified in many segments, including automotive, aerospace, and renewable energy. OMG also saw increased attention from hedge funds in Q4 2012, with interest almost doubling in terms of the number of funds who owned the stock compared to the third quarter. The start of this year saw a sale by OMG of its advanced materials business for $325mm; according to the company, it will help OMG realize its strategy of shifting towards more tech-based businesses with higher growth. D. E. Shaw owns more than 250,000 shares of the stock (check out the fund’s other positions here).
Which other stocks made it into Catapult’s portfolio?
The fund devoted almost $3mm to international methanol supplier Methanex Corporation (USA) (NASDAQ:MEOH). The company reported Q4 earnings at the end of January, delivering lower-than-expected revenue and earnings numbers. As a result, UBS tapered its view on MEOH, dropping its rating from Buy to Neutral. MEOH continues to experience natural gas supply constraints and does not expect those troubles to improve in the near term. Income investors will like the fact that the company carries a dividend yield of 1.9%. Israel Englander keeps an Methanex Corporation (USA) (NASDAQ:MEOH) investment in his Millennium Management portfolio as well (view that fund’s other holdings here).
Chemtura Corp (NYSE:CHMT) rounds out our list of the largest new positions for Catapult; $2.6mm of the fund’s portfolio now sits in CHMT stock. The small-cap specialty chemical engineer is up 40% over the past twelve months, which is even more impressive given the fact that the stock fell 10% after a poor earnings release in February (it also resulted in a downgrade from ratings giant Oppenheimer). Both revenue and EPS came in lower than predicted, and analysts believe that margin improvement limitations may hurt the company going forward unless the economy improves. Billionaire Jeffrey Vinik of Vinik Asset Management initiated a 45,000 share position in Q4 2012 as well (see the fund’s top five picks here).
Disclosure: I do not own shares of any stocks mentioned in this article.
