Billionaire James Dinan’s York Capital Initiated Stakes in These Companies

Though billionaire James Dinan‘s York Capital Management manages regulatory assets worth over $25 billion, its latest 13F filing reveals that less than 16% of it or only $4 billion was invested in US equities at the end of second quarter. The New York-based hedge fund that will be celebrating its silver jubilee this year manages a well diversified equity portfolio with exposure towards most industry sectors.

According to its latest filing, York Capital Management ‘s equity portfolio had a high quarterly turnover of 71.67% during the second quarter and its top 10 equity holdings accounted for over 57% of the value of its equity portfolio at the end of June. The filing also revealed that the fund initiated stakes in 22 stocks during the April-June period. In this post, we will take a look at the top-five new equity holdings of the fund and will discuss how these stocks have performed lately.

We track hedge funds and prominent investors because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points in our backtests that covered the period between 1999 and 2012 (see the details here).

#5 St. Jude Medical, Inc. (NYSE:STJ)

– Shares Owned by York Capital Management (as of June 30): 1.39 Million

– Value of Holding (as of June 30): $108.53 Million

Let’s start with St. Jude Medical, Inc. (NYSE:STJ), whose stock has seen a 27.45% appreciation this year owing majorly to the spike it saw in late-April after Abbott Labs announced it will be acquiring the company for $25 billion in a cash-and stock deal. The medical devices company currently pays a quarterly dividend of $0.31 per share, which based on its last trading price translates into a forward yield of 1.56%. Earlier this month, the company filed a lawsuit against Muddy Waters, MedSec Holdings and three other individuals for a report published by Muddy Waters on August 25 which alleged that 50% of St. Jude Medical, Inc. (NYSE:STJ)’s business was at high risk due to the vulnerability of its devices to hacking. After this report was published, St. Jude Medical, Inc.’s stock dropped over 10% on August 26, forcing NASDAQ  to suspend trading in it for some time. During the second quarter, the ownership of St. Jude Medical, Inc. (NYSE:STJ) among hedge funds covered by us increased by 18 to 54 and the aggregate value of their holdings in it more than doubled to $1.92 billion.

#4 LinkedIn Corp (NYSE:LNKD)

– Shares Owned by York Capital Management (as of June 30): 650,121

– Value of Holding (as of June 30): $123.03 Million

Shares of professional social networking company LinkedIn Corp (NYSE:LNKD) have had an amazing ride this year. First, they suffered a 50% drop in February after the company reported its fourth-quarter numbers and then they saw a nearly 40% spike in June after Microsoft announced that it will acquire LinkedIn Corp for $196 per share. Currently, the stock trades down 15.44% year-to-date and very close to Microsoft’s acquisition price. For its fiscal 2016 second quarter, LinkedIn Corp (NYSE:LNKD) reported EPS of $1.13 on revenue of $932.71 million, beating analysts’ estimates of EPS of $0.78 on revenue of $898.30 million. Last month, TechCrunch reported that the company had sued 100 unnamed individuals for using bots to acquire user profiles from its platform. The popularity of LinkedIn Corp among hedge funds tracked by us saw a notable increase during the April-June period with its ownership among them increasing by 25 to 66 and the aggregate value of their holdings in it jumping by 194% to $4.06 billion.