Dmitry Balyasny’s Balyasny Asset Management (BAM) is one of the 500 elite hedge funds we track at Insider Monkey, and for good reason. Its 13F equity portfolio returned at least 14 percentage points in just one quarter alone last year, and this year, many of its stock positions are intriguing, to say the last. Now, in case you weren’t aware, there are material advantages that can be gained from paying attention to hedge fund sentiment. Learn more here.
Number one
The hedge fund disclosed that its largest first quarter holding was in Chicago Bridge & Iron Company N.V. (NYSE:CBI). BAM reported owning 3,137,954 shares of the company, worth $194.9 million. In the previous filing, the stake represented 3,536,243 shares, valued at $163.9 million. A Dutch company, Chicago Bridge & Iron Company N.V. (NYSE:CBI) has a market cap of $6.18 billion, second largest among general contractors, and has returned nearly 30% in 2013. Interestingly, Warren Buffett is also bullish on CBI, as the engineering and construction services company has a strong foothold in the energy and electric industries, especially post-Shaw Group acquisition.
A REIT adventure
In second place is Penn National Gaming, Inc (NASDAQ:PENN), represented in the Balyasny Asset Management 13F by a $124.8 million stake, which involves 2,293,734 shares, up from 2,053,201 shares, worth $100.8 million held at the end of December. The operator of gaming and pari-mutuel facilities has a year-to-date return of above 15% and sports a forward P/E of 20.9x. Aside from being a decent momentum play, the primary bullish thesis behind Penn National Gaming, Inc (NASDAQ:PENN)is its upcoming REIT spinoff (named Gaming and Leisure Properties) that is predicted to give existing stockholders shares a one-to-one basis in addition to a special dividend. You don’t have to say that twice to get the attention of many REIT-lovers.
The best of the rest
The hedge fund also reported owning 1,575,240 shares in Williams Partners L.P. (NYSE:WPZ), the value of the holding amounting to $81.6 million. It is a new position in the equity portfolio of BAM. Williams Partners L.P. (NYSE:WPZ) has a year-to-date return above 5% and is trading at a forward P/E of 21.6x. With a market cap around $21.5 billion, Williams isn’t an under-the-radar play, but it does represent solid value, with price and book multiples below industry averages.
More importantly, Williams gives those betting on the Marcellus Shale’s natural gas potential a great place to store their cash. The company forecasts that it can gather 5 billion cubic feet of gas per day by 2015, and a dividend yield of 6.5% will hold most over until this windfall can come to fruition.
Next on the list is Citrix Systems, Inc. (NASDAQ:CTXS). BAM disclosed an $80.1 million holding which contains 1,110,645 shares. In the previous filing with the SEC, the hedge fund reported holding only a Call position in Citrix Systems, Inc. (NASDAQ:CTXS), which involved 50,000 shares worth $3.3 million. Shares haven’t generated mind-blowing returns in 2013—down 1.8% year to date—and Citrix has the 17th highest earnings multiple in the 50-plus company business software and services industry, so there’s not much value here.
Still, some analysts think that Citrix could provide a nice acquisition target for some of its larger tech peers (it already has partnerships with Microsoft Corporation (NASDAQ:MSFT) and Cisco Systems, Inc. (NASDAQ:CSCO), for example), and although this is just speculation at this point, it’s possible BAM sees this potential as well. While this sort of takeover talk has been brimming around Citrix for more than two years now, the total value of its diversified businesses is too attractive to ignore, assuming that a willing buyer is out there somewhere.
General Electric Company (NYSE:GE) is the fifth most valuable equity of Dmitry Balyasny’s hedge fund, as it owned 3,250,742 shares worth $75.2 million at the end of March, up nearly 3,000% quarter-over-quarter. Up by double-digit percentage points in 2013, the diversified industrial behemoth is one of the most popular stocks among the hedge funds we track, and any General Electric Company (NYSE:GE) shareholder is at least partially in it for the value (it trades at a forward P/E near 13.0), and the yield (it sports a dividend yield of 3.2%).
Over a longer timeframe, bulls like BAM may be attracted to GE’s cost cutting initiatives, strong margin growth, and above average gains in its oil & gas and aviation businesses. Regarding the latter, GE’s recent acquisition of Avio should only boost its aviation prospects even more, particularly in the booming jet propulsion segment.
Final thoughts
In short, each of the stocks discussed above have their own growth catalysts moving forward, from GE’s aerospace boom to Penn National Gaming, Inc (NASDAQ:PENN)’s REIT adventure. Chicago Bridge & Iron Company N.V. (NYSE:CBI) is even stronger post-acquisition, while Williams is making headway in the Marcellus Shale. BAM’s investment in Citrix is intriguing, and it may mean that the fund expects some sort of takeover activity to occur in the intermediate term, as there’s not much else that’s truly attractive about the stock at the moment.
Disclosure: none
