Rail-Splitter Capital Management, managed by John Croghan and Richard Fradin, recently filed its 13F Form with the U.S. Securities and Exchange Commission, revealing its equity holdings as of the end of the fourth quarter of 2014. During the quarter, the fund acquired nine new positions and reduced its stakes in over 10 stakes. In this article, we will talk about at the three largest new positions held by the hedge fund, which are represented by Covidien plc (NYSE:COV), Dollar Tree Inc. (NASDAQ:DLTR), and Sherwin-Williams Co (NYSE:SHW).
Rail-Splitter Capital Management was founded in 2002, and is based in Chicago, Illinois. The hedge fund applies a consistent fundamental investment approach and a disciplined investment process that focuses on fundamental research, deep sector experience and valuation discipline.
Covidien plc (NYSE:COV) is one of new positions the fund disclosed in its latest 13F. According to the filling, Rail-Splitter Capital Management holds 121,970 shares of the company, valued at $12.48 million. Covidien plc (NYSE:COV) is a global healthcare company that develops and manufactures healthcare products for clinical and home use. The company has a market cap of more than $47 billion. The company’s stock during one-year period moved up by over 50%, and currently is trading at $103.64, close to its 52 week high of $106.29.
In June, Medtronic Inc. (NYSE: MDT) signed a deal to acquire Covidien plc (NYSE:COV) in a cash-and-stock transaction valued at $93.22 per Covidien share, or a total of about $42.9 billion. Following the completion of the transaction, both companies will be combined under a new entity to be called Medtronic plc. The deal is subject to certain conditions, including approvals by the companies’ shareholders, regulatory clearances in the U.S., the E.U., China and certain other countries.
Rail-Splitter Capital Management sold its entire stake in Medtronic Inc. (NYSE: MDT) during the fourth quarter, according to the filing. Previously, the fund reported holding 139,791 shares of Medtronic Inc. (NYSE: MDT) at the end of third quarter.
Other investors betting big on Covidien plc (NYSE:COV) include Paulson & Co, led by John Paulson, which disclosed ownership of 12.60 million shares of the company, as of the end of the third quarter. Taconic Capital, managed by Frank Brosens, held 9.91 million shares of the company at the end of September 2014.
Next is Dollar Tree Inc. (NASDAQ:DLTR), in which Rail-Splitter Capital Management disclosed holding 165,062 shares, worth $11.6 million. Dollar Tree Inc. (NASDAQ:DLTR) is an operator of discount variety stores selling everything for $1 or less, and has a market cap of nearly $14 billion. Last year, Dollar Tree Inc. (NASDAQ:DLTR) launched a takeover bid for Family Dollar Stores, Inc. (NYSE:FDO). The shareholders of Family Dollar Stores Inc. (NYSE:FDO) are scheduled to vote on the company’s pending merger on January 22.
Among the largest shareholders of Dollar Tree Inc. (NASDAQ:DLTR) include Highfields Capital Management, led by Jonathon Jacobson, which reported owning around 8.46 million shares of Dollar Tree Inc. (NASDAQ:DLTR) at the end of third quarter. Another investor holding big stake in Dollar Tree Inc. (NASDAQ:DLTR) is Viking Global, run by Andreas Halvorsen, which disclosed holding around 5.50 million shares of the company.
On the third spot is Sherwin-Williams Co (NYSE:SHW), a $26.2 billion market cap manufactured and developer of paint, coatings and related products to professional, industrial, commercial and retail customers in Americas. Rail-Splitter Capital Management revealed holding 38,275 shares, with a reported value of $10.3 million.
During the last six months, share price of Sherwin-Williams Co (NYSE:SHW) increase by over 28%, with the stock is currently trading at $271.95. For the full-year 2014, the company expects consolidated net sales to increase about 9% compared to full-year 2013. For the full-year 2015, the company expects consolidated net sales to increase 7%-11%, as compared to full year 2014. The anticipated diluted net income per common share for 2015 will be in the range of $10.65 to $10.85 per share.
Sherwin-Williams Co (NYSE:SHW) is also backed by Select Equity Group, led by Robert Joseph Caruso, which reported holding 1.45 million shares of the company at the end of September 2014. Chilton Investment Company, managed by Richard Chilton, revealed ownership of 445,933 shares of the company.
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