GMT Capital Cuts Stake in Every Major Holding Going Into Q2

Thomas E. Claugus-led GMT Capital recently revealed its U.S equity portfolio as of the end of March via a 13F filing submitted with the SEC. Founded in 1993 by Mr. Claugus, the Atlanta-based firm is the global long/short equity investment manager of the Bay Resource Partners Funds. Mr. Claugus holds an MBA from the Harvard Business School and prior to founding GMT Capital worked at Rohm and Haas Company for 17 years. The firm currently manages assets in excess of $5 billion, nearly one-third of which is employee owned, and its public equity portfolio was worth $4.07 billion on March 31. According to GMT Capital’s latest 13F filing, its equity portfolio saw a quarterly turnover rate of 78.33% during the first quarter and its top-10 equity holdings amassed nearly 45% of its portfolio’s value on March 31. The filing also revealed that during the first quarter, the firm reduced its stake in each of its top five equity holdings, which we will be discussing in this article.

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#5 Capital One Financial Corp. (NYSE:COF)

 – Shares Owned by GMT Capital (as of March 31): 2.17 million

 – Value of Holding (as of March 31): $150.26 million

Let’s begin with Capital One Financial Corp. (NYSE:COF), in which GMT Capital reduced its stake by 4% during the first quarter. Shares of the bank holding company are trading down by 6.16% year-to-date, which has resulted from a greater than 9% drop since the company came out with its first quarter earnings on April 26. While analysts had expected the company to report EPS of $1.91 on revenue of $6.15 billion, Capital One Financial Corp. (NYSE:COF) declared EPS of $1.84 on revenue of $6.20 billion. According to analysts, despite the downside risks in the stock, it offers a decent margin of safety to potential investors at current levels given that it trades at a greater than 25% discount to its book value and boasts a healthy annual dividend yield of 2.33%. Ric Dillon‘s Diamond Hill Capital boosted its holding in the company by 28% to 4.96 million shares during the first quarter.

#4 Delta Air Lines, Inc. (NYSE:DAL)

 – Shares Owned by GMT Capital (as of March 31): 4.39 million

 – Value of Holding (as of March 31): $213.64 million

GMT Capital reduced its stake in Delta Air Lines, Inc. (NYSE:DAL) by 7% during the first quarter, during which shares were down by 3.6%. Things have gone from bad to worse, as shares are now trading down by nearly 19% year-to-date. The company recently became the biggest buyer of Bombardier’s CSeries narrow-body jets by placing an order for at least 75 planes, with an option to buy an additional 50 planes in the future. In an interview with Bloomberg published a few days ago, Delta Air Lines’ new CEO, Ed Bastian, revealed that the company is looking to expand its presence in Canada through a “broader partnership”, which has led to speculation that it might buy an equity stake in its Canadian codeshare partner, Westjet. Mehdi Mahmud‘s First Eagle Investment Management didn’t make any changes to its stake in Delta Air Lines, Inc. (NYSE:DAL) during the first quarter, owning nearly 3.03 million shares of the company at the end of March.

We’ll look at GMT Capital’s top-3 holdings on the next page.