Brian Bares’ Favorite Investment Reads and Favorite Stocks

Bares and his team are very optimistic about the prospects of Platform Specialty Products Corp (NYSE:PAH) and have boosted their investment by 64% during the quarter. According to its latest 13F filing, Bares Capital holds 11.9 million shares valued at $102 million. At the end of the quarter, 41% of Platform Specialty Products Corp (NYSE:PAH) common stock was held by 22 elite hedge funds, up from 20 three months before. The company reported a loss of $135 million for the first quarter of 2016; however, when accounted for non-recurring costs, the company said it earned $0.11 per share, surpassing analysts’ expectations of $0.10 per share. Revenue came in at $824 million, up by 54% year-over-year. Billionaire Bill Ackman is also keeping an eye on the stock, with his fund, Pershing Square, holding 42.7 million shares worth $367 million at the end of March.

Bares Unsure About Interactive Intelligence

When it comes to Interactive Intelligence Group Inc (NASDAQ:ININ), Bares decided to exercise a little caution and reduced his fund’s exposure to the stock by 7% over the course of the first quarter. Valued at $107 million, Bares Capital’s stake in the provider of software and cloud services amounts to 2.95 million shares as reported in its latest 13F filing. During the first three months of this year, the number of long hedge fund positions increased to 14 from just 9 registered at the end of 2015. Whale Rock Capital Management, run by Alex Sacerdote, established a fresh position in Interactive Intelligence Group Inc (NASDAQ:ININ) that amounted to 814,641 shares valued at $29.7 million. Shares are currently trading up 41% year=to=date. Analysts at William Blair and Morgan Stanley have recently reiterated their ‘Hold’ rating on Interactive Intelligence Group Inc (NASDAQ:ININ), while the consensus price target on the stock stands at $46 per share – an upside potential of roughly 10%.

Top Dog

Colfax Corp (NYSE:CFX) remains Bares’ number one equity bet, although the fund reduced its holding by 1%. At the end of March, Bares Capital held 7.49 million shares of Colfax with an estimated value of $214 million. Charles Akre, on the other hand, increased his investment by 4% to some 7.62 million shares valued at $218 million. In contrast to the stocks discussed above, the popularity of Colfax Corp (NYSE:CFX) among the funds followed by Insider Monkey cooled down during the first quarter, as the number of funds invested fell to 24, which together held 26% of the company’s outstanding stock. The stock is currently up by 18% for the year and is trading at a P/E multiple of 25, which is significantly lower than the industry average P/E of 39. Barclays’ analysts have recently upgraded the stock to ‘Equal Weight’ from the previous rating of ‘Underweight’ and have increased the price target to $26 per share. The stock is already trading above that level, having ended yesterday’s session at $26.80 per share.

Disclosure: none.