Did Marvell Technology Group Ltd. (MRVL), Stewart Information Services Corp (STC), and Others Live Up to the Hype?

Should you be bullish on Stewart Information Services Corp (NYSE:STC), Marvell Technology Group Ltd. (NASDAQ:MRVL), L-3 Communications Holdings, Inc. (NYSE:LLL), and Zayo Group Holdings Inc (NYSE:ZAYO)? According to our research, an investor can beat the market by investing in the top picks of big hedge funds. We follow around 750 funds, among which is Manoneet Singh‘s Kavi Asset Management, which had all four of those companies among its top consumer picks. Therefore, we decided to examine these stocks, see how they performed in the third quarter, and what the general smart money sentiment towards them was.

Kavi Asset Management is a New York-based hedge fund run by Manoneet Singh. Kavi’s equity portfolio’s worth shrunk to $116.13 million as of the end of the third quarter, compared to $124.61 million a quarter earlier. Nonetheless, the fund’s picks returned an impressive 12.79% in the third quarter when looking at its 20 long positions in companies which had a market value of $1 billion or more on June 30. Our research has shown that paying attention to the long sides of hedge funds’ portfolio helps pinpoint smart investments. For example, of 660 funds tracked by Insider Monkey which had at least 5 long positions in $1 billion companies on June 30, 627 of them delivered positive gains in the third quarter from those positions. With that in mind, let’s analyze Kavi Asset Management’s portfolio and see how some of its top stock picks performed.

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Kavi Asset Management added Stewart Information Services Corp (NYSE:STC) as a new position in its portfolio in the second quarter, buying 220,000 shares of the title insurer. In the third quarter, the fund bought another 326,000 shares of Stewart, increasing its holding in the company by 48% to a stake valued at $14.49 million. The decision to go long Stewart Information was fruitful, as the stock returned 8.1% in the third quarter.

Heading into the third quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 26% fall off from the first quarter of 2016. The largest stake in Stewart Information Services Corp (NYSE:STC) was held by Foundation Asset Management, which reported holding $54.3 million worth of stock as of the end of June. It was followed by Bulldog Investors with a $46.8 million position. Other investors bullish on the company included Basswood Capital, Renaissance Technologies, and Three Corner Global Investors.

Marvell Technology Group Ltd. (NASDAQ:MRVL) shares were being unloaded by Kavi in the third quarter, as the fund slashed 40% of its holding in the company during the period, ending the September quarter with 476,600 Marvell shares. The aggregate value of this stake was $6.32 million. Marvell was another new addition to Kavi Asset Management’s portfolio in the second quarter, as the fund acquired 804,200 shares of the company, having a total worth of about $7.66 million on June 30. The stock returned 39.9% during the third quarter, so the fund was doubtless taking profit from its wise investment by selling shares.

At Q2’s end, a total of 38 of the hedge funds that we follow held long positions in this stock, up by 23% from the previous quarter. When looking at the institutional investors followed by Insider Monkey, Starboard Value LP, managed by Jeffrey Smith, holds the largest position in Marvell Technology Group Ltd. (NASDAQ:MRVL). Other peers that hold long positions contain Curtis Macnguyen’s Ivory Capital (Investment Mgmt), D E Shaw, and Richard Barrera’s Roystone Capital Partners.

We’ll check out two more of the fund’s stock picks on the next page.

Kavi Asset Management sold all 40,800 L-3 Communications Holdings, Inc. (NYSE:LLL) shares it had in its portfolio during the third quarter, ending the period with no stake in the company. The fund had upped its holding in the company by 7% in the second quarter, and it turned out fairly well, as the stock delivered 3.2% returns in the third quarter.

L-3 Communications Holdings, Inc. (NYSE:LLL) has seen an increase in enthusiasm from smart money of late. LLL was in 33 hedge funds’ portfolios at the end of the second quarter of 2016. There were 31 hedge funds in our database with LLL positions at the end of the previous quarter. Of the funds tracked by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in L-3 Communications Holdings, Inc. (NYSE:LLL), worth close to $172.2 million. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $147 million position. Remaining hedge funds and institutional investors that are bullish consist of Rob Citrone’s Discovery Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and Jim Simons’ Renaissance Technologies.

Kavi Asset Management cut its stake in Zayo Group Holdings Inc (NYSE:ZAYO) by 27% in the third quarter, ending the period with 147,900 shares of the company. The total value of these shares was $4.39 million at the end of September. The stock returned 6.4% during the third quarter, proving to be another solid pick for the fund.

Among the funds in our system, SPO Advisory Corp held the most valuable stake in Zayo Group Holdings Inc (NYSE:ZAYO), which was worth $215 million at the end of the second quarter. On the second spot was Cadian Capital which amassed $156.6 million worth of shares. Moreover, Millennium Management, Brookside Capital, and Criterion Capital were also bullish on Zayo Group Holdings Inc (NYSE:ZAYO).

Disclosure: None