Chinese-born Michael Hintze is an Australian/British businessman, famously perched on Forbes’s billionaire list as the 880th richest person in the world. He made his fortune primarily through his hedge fund company CQS; the directional fund’s tremendous gains in 2012 gave it the rank of the third top-performing large hedge fund in the world for the year. CQS released their 13F filing a few days ago, highlighting the firm’s take on a number of listed equities. We value the opinion of stock-pickers like Hintze, because we’ve discovered that a group of the most popular small-cap stocks amongst billionaire managers can achieve 18 percentage point yields over market returns (learn more here). Read on to see our analysis of CQS’ top holdings below.
Cruise line Carnival Corporation (NYSE:CCL) has almost 5% of CQS’ capital, roughly double the percentage that Kerr Nielson of Platinum Asset Management has (view his portfolio here). Carnival has been in hot water the past two weeks for an engine fire on their Triumph ship that caused the vessel to be stranded at sea, leaving passengers without running water, hot food, proper bathroom facilities, etc. While we wait to see how this will effect consumer demand in the next few quarters, our initial prognosis is that it can’t be good, especially going into the summer tourist season. Wall Street was already tepid before the incident, with the most recent analyst recommendations hovering around equalweight.
Mainly operating in Europeand Chile, Liberty Global Inc. (NASDAQ:LBTYA) is a provider of video, broadband Internet, and telephone services. The stock has been on a steady climb up since the summer of 2012, bottoming then around $43.50, only to rise to almost $65.50 at the beginning of this month. Liberty’s Q3 2012 earnings announcement showed double-digit growth in revenues versus the same quarter a year prior, and sell-side analysts have been recommending investors to sit on the buy button, with ten out of eleven polled giving the stock a bullish nod. Tiger Global Management has a staggering 6.25 million shares of the company.
Global resources company and American Depository Receipt BHP Billiton Limited (ADR) (NYSE:BHP) is CQS’ fourth largest holding. Wall Street hasn’t been kind to the stock so far this year, with Dahlman Rose, BofA/Merrill, and Macquarie all downgrading BHP since the tenth of last month. They join a number of other bears who think the stock is way overvalued at current levels, claiming that BHP should be trading more than 20% lower than where it is now. Furthermore, BHP has exhibited negative growth in both earnings and revenue, adding another poor mark to their report card. Billionaire Ken Fisher has contradicting ideas, however; he owns almost half a billion dollars’ worth of the company.
Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) is Hintze’s fifth largest position and the last on our list. The company operates discount and low-rate short-haul flights predominantly in Europe and the UK. They also offer a number of other travel-related services like Internet and car scheduling. The stock climbed 20% in the last year, propped up by quarterly growth in earnings and revenues year over year. We like Ryanair’s business model and think the stock has more room to go in 2013; one year mean price targets are hovering around the $47.50 range, indicating over 16% of upside from here. Jim Simons of Renaissance Technologies recently bumped his stake up to $75 million.
The article Billionaire Michael Hintze’s Top Picks originally appeared on Fool.com and is written by Jake Mann.
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