In a recently disclosed filing with the SEC, Debra Fine‘s Fine Capital Partners reduced its stake in Hornbeck Offshore Services, Inc. (NYSE:HOS) by nearly 1.4%. According to the latest filing with SEC, Fine Capital now owns 3.56 million shares, down from 3.61 million shares held previously. Fine Capital’s current passive stake in Hornbeck accounts for 9.97% of the company’s outstanding common stock. At the end of the 2014, Hornbeck represented the third-largest position in Fine’s equity portfolio, trailing Assured Guaranty Ltd. (NYSE:AGO) and Scientific Games Corp (NASDAQ:SGMS), on the first and second spots respectively.
The New York City-based hedge fund, Fine Capital Partners was founded in 2004 and has both its long and short equity positions in the U.S. companies. Debra Fine’s investment philosophy is based on fundamental research of the companies, which involves their current market valuation, competitive market position, profit and growth outlook, management capabilities, capital structure, and cash flow generation properties. Besides managing her fund, she has been a Trustee of Save The Children Federation since February 2013. The fund’s equity portfolio, having a value of about $1.20 billion, as of the end of last year, has around 35% of its value held in the finance sector, followed by the consumer discretionary sector constituting 27% of the value.
Generally, following the top stock picks of hedge funds is not a great strategy for retail investors, since they mostly involve large cap companies. On the other hand, following their small cap picks is much more advantageous. Our research has shown that between 1999 and 2009, hedge funds on an average only beat the market by 2.0 percentage points on an annual basis. However, the interesting part is that small caps picks beat the market by double digits during the same period. Fine Capital’s equity portfolio is mainly concentrated in small-cap companies.
Fine Capital increased its stake in Hornbeck Offshore Services, Inc. (NYSE:HOS) by nearly 6% during the fourth quarter. the stake being the third largest in the fund’s portfolio. The $682.69 million company has been under pressure lately and the stock is down by nearly 56.6% over the last year. Hornbeck Offshore Services, Inc. (NYSE:HOS) is a provider of marine transportation services to exploration and production, oilfield service, offshore construction and United States military customers. The recent dip in oil prices has hit the company hard. After delivering a record quarterly revenue in the second quarter of 2014, Hornbeck missed revenue estimates in both subsequent quarters. Fourth quarter Earnings per Share (EPS) of $0.52 missed the consensus estimate by $0.07 and revenues of $160.22 million were $7.44 million smaller than anticipated.
Among more than 700 hedge funds that we track, one prominent investor of Hornbeck Offshore Services, Inc. (NYSE:HOS) is billionaire Israel Englander‘s Millennium Management, which initiated a position in the company with 1.57 million shares valued at $39.15 million during the fourth quarter.
Assured Guaranty Ltd. (NYSE:AGO) represented the largest position in Fine Capital’s equity portfolio, comprising 12.18% of the total value. During the fourth quarter Debra Fine cut the company’s stake by 199,940 shares to 5.61 million shares valued at $145.69 million. According to our data, 51 funds were invested in Assured Guaranty Ltd. (NYSE:AGO) at the end of 2014, with aggregate value of their stakes totaling $1.33 billion, against 52 funds with $1.16 billion, a quarter earlier. Paul Orlin and Alex Porter‘s Amici Capital is one of the shareholders of the company holding 3.48 million shares valued at $90.38 million.
Assured Guaranty is a Bermuda-based holding company provides credit protection products to the United States and international public finance (including infrastructure) and structured finance markets. Its stock is down by 1.8% over the last 52 weeks amid fourth quarter financial results that included an EPS of $0.50, which missed estimates by $0.12.
With 8.2 million shares valued at $104.49 million, Scientific Games Corp (NASDAQ:SGMS) represented the third largest holding of Fine Capital. Although the fund cut its stake by 90,000 shares during the fourth quarter, the portfolio contribution of the $1.19 billion company increased to 8.73% from 8.0% a quarter earlier. This was a result of 20% rise in Scientific Games Corp (NASDAQ:SGMS)’s stock price during the October-December period. Roberto Mignone’s Bridger Management owning 4.15 million shares and Paul Reeder and Edward Shapiro’s PAR Capital Management with 3.07 million shares are two other significant investors in the developer of technology-based products, services and supplier of solutions to lottery and gaming organizations across the world.
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