In its latest 13F filing with the U.S. Securities and Exchange Commission, Centerbridge Partners, led by Mark T. Gallogly, disclosed the holdings in its public equity portfolio, which was valued at $1.66 billion as of the reporting date of March 31. New York City-based Centerbridge Partners is a private investment firm that focuses on private equity and credit investments. The firm was founded by Jeffrey Aronson and Mark Gallogly in 2005. Well-informed sources revealed that Centerbridge Partners is preparing its hedge funds for new capital for the first time in several years, as the firm wants to raise funds for possible big opportunities in the future. In this piece we’ll take a look at the top small-cap stocks in which Centerbridge Partners also sees opportunity, which are Extended Stay America Inc (NYSE:STAY), Ambac Financial Group Inc. (NASDAQ:AMBC), and Quad/Graphics Inc. (NYSE:QUAD).
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The top small-cap stock pick of Centerbridge Partners is Extended Stay America Inc (NYSE:STAY), a $4.03-billion owner and operator of branded hotels in North America. Extended Stay America Inc (NYSE:STAY) also ranks as Centerbridge’s top holding in terms of value by a significant margin. As of the end of the first quarter, the firm held 47.66 million shares of the company, worth $930.83 million. The stake remained unchanged over the course of the first quarter. The company pays a quarterly dividend of $0.17 for a yield of 3.44%. For the first quarter of 2015, Extended Stay America Inc (NYSE:STAY) posted revenues of $287.6 million, a 6.4% increase compared to the first quarter of 2014. Net income during the quarter rose to $27.9 million from $16.1 million in the same period last year. During the past 12 months, the company’s stock declined by 11.97%. Paulson & Co, run by John Paulson, held an identical position of 47.66 million shares of Extended Stay America Inc (NYSE:STAY) at the end of the first quarter.
Next up is Ambac Financial Group Inc. (NASDAQ:AMBC), in which Centerbridge’s position contains 2.23 million shares valued at $53.92 million. The stake remained unchanged during the first quarter. Ambac Financial Group Inc. (NASDAQ:AMBC) is a holding company whose subsidiaries provide financial guarantees and other financial services. The company has a market cap of $1.06 billion. For the first quarter of 2015, Ambac Financial Group Inc. (NASDAQ:AMBC) reported net income of $214.7 million, or $4.57 per share, down from $453.6 million, or $9.73 per share, in the fourth quarter of 2014. Shares of Ambac Financial Group Inc. (NASDAQ:AMBC) have also struggled over the last year, dropping by 15.82%. Another fund that sees value in Ambac Financial Group Inc. (NASDAQ:AMBC) is Canyon Capital Advisors led by Joshua Friedman and Mitchell Julis, which holds 2.13 million shares.
Lastly, we will talk about Quad/Graphics Inc. (NYSE:QUAD), in which Centerbridge reduced its position by 36% to 1.18 million shares during the first quarter, with the stake being valued at $27.03 million. Quad/Graphics Inc. (NYSE:QUAD) is a $1.01 billion market cap provider of print and media solutions. The company pays a quarterly dividend of $0.30, for a yield of 5.90%. Quad/Graphics Inc. (NYSE:QUAD) booked a net loss of $35.2 million during the first quarter, versus a loss of $9.1 million in the same quarter last year. Net sales were $1.11 billion, versus $1.10 billion in the year-ago quarter. The company’s stock has declined by 12.88% year-to-date. Among the largest shareholders of Quad/Graphics Inc. (NYSE:QUAD) is Ron Gutfleish’s ELM Ridge Capital, which holds 699,440 shares as of the end of March.
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