Permian Investment Partner, managed by Alex Duran and Scott Hendrickson is one of the most recent funds added to our database and it’s showed its investing acumen immediately, ranking as the 27th best performing fund during the first quarter, which was its first in our system. All told, we track nearly 700 actively reporting funds at the moment, making the results quite impressive. Using our returns metric, Permian had weighted average returns of 14.9% from its nine reported long positions in companies with market-caps of greater than $1 billion. That list excluded just one of its long positions, which was in the $609.72 million market-cap manufacturing company Albany Molecular Research, Inc. (NASDAQ:AMRI), which also performed well during the quarter, gaining 8.11%.
We track a collection of funds because our research has shown their collective top 15 small-cap picks are highly successful, outpacing both their top large-cap picks and the market as a whole. That’s because these stocks tend to be less efficiently priced, as they are not covered extensively by analysts and the average investor has a hard time gathering information on them. Funds however do their own analyses of these companies, devouting great time and energy to any company they are interested in investing in. When large numbers of funds show faith in these small-cap companies, it’s a good sign that its fundamentals are sound and the company has great growth potential. That is evident from the results of our small-cap strategy, which has returned more than 137% through the end of March, since it was launched at the end of August 2012, with the market returning just 54.7% over the same period.
Aside from our strategy, we also report on the top picks of hedge funds to give investors ideas for other individual stocks they may add to their portfolios, so let’s take a look at Duran and Hendrickson’s highly successful portfolio and see what they have stashed away in there.
On the top spot is Endo International plc (NASDAQ:ENDP), which their portfolio has 27.44% exposure to through a position of 891,450 shares valued at $64.29 million. That’s the highest exposure to the stock among any fund in our database, and it paid off big time during the first quarter, as Endo International plc (NASDAQ:ENDP) returned 24.38%, despite losing out to Valeant Pharmaceuticals Intl Inc (NYSE:VRX) in its attempted takeover of Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP). Nehal Chopra also rode Endo International plc (NASDAQ:ENDP) to big Q1 returns for her own fund, Tiger Ratan. Chopra has the second-largest exposure to Endo International at 16.94%, with it being her fourth-largest position.
Duran and Hendrickson also have the largest exposure to Sealed Air Corp (NYSE:SEE), their second top pick. Their 1.02 million share holding in the company valued at $43.07 million equated to 18.38% of their portfolio’s total value. Sealed Air Corp (NYSE:SEE), which operates in the food safety, hygiene, and packaging industries, returned a solid 7.68% during the first quarter after posting a very positive earnings report in early February, with earnings per share more than doubling to $0.31. Another ‘Tiger Cub’ had the second-greatest exposure after Permian Investment Partners, this time being Jesse Ro of Tiger Legatus Capital, while billionaire Andreas Halvorsen opened a large new position in Sealed Air Corp (NYSE:SEE) during the fourth quarter.
Skipping over Albany Molecular Research, Inc. (NASDAQ:AMRI), the fund’s third top pick, we come to Tribune Media Co (NYSE:TRCO) on the fourth spot. Its position in the entertainment and media company consists of just under 490,700 shares valued at $34.23 million. Tribune Media Co (NYSE:TRCO)’s stock had a solid first quarter, returning 12.53%. The stock was enjoying an even stronger first quarter until it fell by more than 10% on March 23. Billionaire Howard Marks has the largest position in Tribune Media Co (NYSE:TRCO) owning 18.77 million shares.
Next up is Actavis plc (NYSE:ACT), which occupies the fifth spot in Permian’s equity portfolio. The position, consisting of an even 86,000 shares was valued at $22.14 million. That same position today would be worth a good deal more, as Actavis plc (NYSE:ACT) had returns of 15.62% in the first quarter. Actavis plc (NYSE:ACT)’s quarter included the completion of its deal to purchase botox-maker Allergan, which was first announced last year. The pharmaceutical company has announced that it will eventually adopt the botox-maker’s name as its own. Billionaires Andreas Halvorsen, Dan Loeb, and Daniel S. Och are all big shareholders of Actavis who have been invested in the stock for the past year, enjoying huge returns during that time.
Lastly we come to Ashland Inc (NYSE:ASH), which ranked as one of the top consumer durables stocks that billionaires loved entering 2015. Among them were Barry Rosenstein, Leon Cooperman, and Steve Cohen. Alex Duran and Scott Hendrickson owned just under 97,700 shares of the stock worth $11.70 million. Ashland Inc (NYSE:ASH) provided solid returns of 6.60% during the quarter to its billionaire and non-billionaire investors alike. Ashland Inc (NYSE:ASH) announced a new quarterly dividend payment of $0.34 during the first quarter, the yield of which is currently 1.05% based on current trading levels.
Disclosure: None
