Breton Hill Goes on a Buying Spree: See What Stocks It Bought in Q2

Quarterly 13Fs for the June quarter are flowing in gradually, enabling investors to examine all major moves completed by the smart money industry during the second quarter of 2016. Hedge fund vehicles and other firms are required to submit their 13Fs with the SEC by mid-August, with some of them having already compiled and filed these highly-informative quarterly documents.

Breton Hill Capital Ltd., an alternative asset management firm co-founded by its current CEO Ray Carroll in 2011, is among the few investment firms that already submitted their 13Fs for the second quarter. The Toronto-based asset manager was awarded the “Best Canadian Hedge Fund Award” at the Hedge Funds Review Americas Awards 2013. Breton Hill Capital’s core investment philosophy relies on identifying macro trends, unlocking value by capturing micro-inefficiencies, as well as controlling short-term risks to preserve capital. With that in mind, let’s have a look at several bullish moves completed by the Canadian investment firm during the June quarter.

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Ford Motor Company (NYSE:F)

– Shares owned by Breton Hill Capital as of June 30: 665,457

– Value of Breton Hill Capital’s holding as of June 30: $8.37 Million

Breton Hill Capital upped its position in Ford Motor Company (NYSE:F) by 89,574 shares during the second quarter of 2016 to 665,457 shares. The upped stake was valued at $8.37 million on June 30 and accounted for 2.7% of the firm’s entire portfolio. Ford investors are hoping China will continue to represent a crucial pillar of growth for the U.S. automaker ahead, as the world’s second-largest economy can add significantly to Ford’s bottom- and top-line growth, as well as reduce the company’s dependency on the North American market. Sales in Ford’s Asia Pacific region and China in particular reached a record in the first quarter. The automotive giant plans to bring an electric car to the market to challenge Tesla Motors Inc. (NASDAQ:TSLA)’s Model 3, so Ford may become a major player in the promising electric car industry in the near term. Ford shares are 4% in the red year-to-date. Ken Fisher’s Fisher Asset Management cut its stake in Ford Motor Company (NYSE:F) by 10% during the second quarter to 857,222 shares.

RR Donnelley & Sons Co (NASDAQ:RRD)

– Shares owned by Breton Hill Capital as of June 30: 499,187

– Value of Breton Hill Capital’s holding as of June 30: $8.45 Million

The Toronto-based asset manager boosted its position in RR Donnelley & Sons Co (NASDAQ:RRD) by 435,554 shares during the April-to-June period, ending the second quarter with 499,187 shares. The reshuffled position was worth $8.45 million at the end of the June quarter. Reportedly, Xerox Corp (NYSE:XRX), which plans to separate its business process outsourcing business from the document technology and document outsourcing business by the end of the year, has been in talks to acquire communications technology specialist RR Donnelley & Sons. A possible deal may be announced before the completion of Xerox’s planned split into two separate companies, so various parts of the target’s business could be integrated into Xerox’s soon-to-be created companies. In early August 2015, RR Donnelley also announced a plan to create three independent public companies: a financial communications services company, a publishing and retail-centric print services company, and a multichannel communications management company. RRD shares have gained 27% since the start of 2016. Jim Simons’ Renaissance Technologies owned 1.02 million shares of RR Donnelley & Sons Co (NASDAQ:RRD) on March 31.

Altria Group Inc. (NYSE:MO)

– Shares owned by Breton Hill Capital as of June 30: 124,400

– Value of Breton Hill Capital’s holding as of June 30: $8.58 Million

The investment firm co-founded and overseen by Ray Carroll increased its exposure to Altria Group Inc. (NYSE:MO) by 22% during the June quarter to 124,400 shares. The increased stake was valued at $8.58 million at the end of the second quarter and made up 2.8% of the firm’s portfolio. The cigarette maker has delivered years of dividend growth, on top of massive capital gains. Altria Group is among the top dividend payers in the stock market, with its current annualized dividend rate standing at $2.26 per share. This equates to an annual dividend yield of 3.28%. More importantly, Altria Group has seen the value of its stock jump by 18% since the start of 2016. With a dividend payout ratio target of roughly 80% of adjusted diluted EPS, Altria appears to have an easily sustainable dividend as well. Love them or hate them, the so-called “sin” stocks such as Altria Group’s stock make investors a great deal of money. Tom Russo’s Gardner Russo & Gardner was the owner of 5.95 million shares of Altria Group Inc. (NYSE:MO) at the end of March.

General Motors Company (NYSE:GM)

– Shares owned by Breton Hill Capital as of June 30: 308,164

– Value of Breton Hill Capital’s holding as of June 30: $8.72 Million

Breton Hill Capital also boosted its General Motors Company (NYSE:GM) position by 11% during the second quarter of 2016, ending the three-month period with 308,164 shares valued at $8.72 million. The shares of the automaker are down 10% thus far in 2016, as the auto sector appears to be reaching a peak after years of rising sales. The U.S. auto giant continues to perform strongly in the critical Chinese auto market, which represents the company’s largest market in terms of sales volume. General Motors and its joint venture partners sold a whopping number of 295,282 vehicles in May, up an incredible 16.9% year-over-year. Moreover, GM, one of China’s best-selling foreign automakers, registered a record June delivery of 273,563 units, an increase of 11.2% compared to the previous year. GM’s sales in China are up 5.2% year-over-year in the first half of 2016 despite suffering disappointing sales growth in the first quarter. Warren Buffett’s Berkshire Hathaway had 50.00 million shares of General Motors Company (NYSE:GM) in its portfolio on March 31.

Verizon Communications Inc. (NYSE:VZ)

– Shares owned by Breton Hill Capital as of June 30: 159,845

– Value of Breton Hill Capital’s holding as of June 30: $8.93 Million

Verizon Communications Inc. (NYSE:VZ) received some love from Breton Hill Capital in the second quarter of 2016, as the Toronto-based investment firm increased its Verizon stake by 29% quarter-over-quarter to 159,845 shares. The increased stake was worth $8.93 million on June 30, representing the second-largest equity position in the firm’s portfolio. Despite having experienced one of the largest labor strikes in U.S. history, Verizon shares are up by an impressive 20% year-to-date. Although most individuals have not heard of 5G just yet, Verizon Communications is the first mover in 5G as the telecom service provider already reached pre-commercial 5G testing. The U.S. network provider currently pays shareholders an annualized dividend of $2.26 per share, which offers an annual yield of 4.07%. The 5G launch is anticipated next year, probably representing the next growth phase for Verizon. The Oracle of Omaha also holds a stake of 15.00 million shares of Verizon Communications Inc. (NYSE:VZ) as of the end of the first quarter.

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