Shah Capital Management, the hedge fund founded and managed by Himanshu H. Shah, recently filed its form 13F for the second quarter of 2014, disclosing his long equity positions as of June 30. The fund continued to display a strong focus on China-based companies, especially those in the technology and industrial goods segments. So, let’s take a look at Shah Capital’s most valuable holdings in order to find out if any of them should be considered as potential investments.
Since the third quarter of 2012, China Yuchai International Limited (NYSE:CYD) has been the fund’s most valuable equity position. Over the second quarter of 2014, the fund continued to increase its exposure, to the $807 million market cap diesel engines Chinese manufacturer and assembler. After having slightly upped its stake in China Yuchai International Limited (NYSE:CYD), Shah Capital owns 2.34 million shares, worth almost $50 million. This position accounts for almost 37% of the fund’s total equity portfolio’s value.
Although the stock price is up barely 3.8% year-to-date, other hedge funds, including J. Alan Reid, Jr.’s Forward Management and Jean-Marie Eveillard’s First Eagle Investment Management hold millionaire stakes in China Yuchai International Limited (NYSE:CYD). These funds own 451,548 shares and 125,000 shares of the company, respectively.
UTStarcom Holdings Corp (NASDAQ:UTSI) has also felt Shah Capital’s bullishness. Shah had intended to acquire this $115 million market cap telecom infrastructure provider, but had then withdrawn its proposal. However, it has continued to acquire the company’s stock ever since, establishing itself as the largest hedge fund shareholder at UTStarcom Holdings Corp (NASDAQ:UTSI). Its 10.245 million shares are worth more than $30 million, and account for roughly 17% of the company’s outstanding shares.
Second in line is Phil Frohlich‘s Prescott Group Capital Management, which last reported holding around 2.307 million shares of UTStarcom Holdings Corp (NASDAQ:UTSI). The stock has inched more than 7% over the second quarter of 2014.
Third in this list is Chiquita Brands International Inc (NYSE:CQB), a $491 million market cap marketer and distributor of bananas and pineapples, of which Shah owns 1.229 million shares, worth about $13.3 million. Although Chiquita Brands International Inc (NYSE:CQB)’s stock has lost more than 10%, year-to-date, several hedge funds seem quite bullish about its future. Steven Cohen’s Sac Capital Advisors last declared having upped its stake in Chiquita Brands International Inc (NYSE:CQB) by 846%, to 2.17 million shares.
Coeur d’Alene Mines Corporation (NYSE:CDE) came in fourth, after Shah more than tripled its exposure. The fund now owns 990,615 shares of this $910 million market cap silver and gold producer, worth more than $9 million. Despite the fund’s bullishness, Coeur d’Alene Mines Corporation (NYSE:CDE) has plunged by almost 19% since the beginning of the year.
Notwithstanding, several major fund managers including Chuck Royce and Jim Simons have last declared having either started positions or increased their stakes in the company. Mr. Royce’s fund disclosed ownership of 875,000 shares of Coeur d’Alene Mines Corporation (NYSE:CDE), and Mr. Simons’ fund, ownership of 757,790 shares.
Finally, we’ve got Canadian Solar Inc. (NASDAQ:CSIQ), a $1.6 billion market cap solar power company of which Shah owns 222,781 shares, valued at approximately $6.9 million. However, other funds seem more bullish about Canadian Solar Inc. (NASDAQ:CSIQ) than Shah, which slightly trimmed its stake over Q2.
Over Q1, Donald Chiboucis’ Columbus Circle Investors more than tripled its exposure to Canadian Solar Inc. (NASDAQ:CSIQ), and now owns 2 million shares, while Daniel Benton’s Andor Capital Management maintained its position unchanged, with 1.75 million shares.
Disclosure: Javier Hasse holds no position in any stocks or funds mentioned.
