Richard Mashaal’s top picks for his hedge fund Rima Senvest Management crushed the market in the first quarter of 2015. In the latest filing, its 17 long positions in stocks with a market cap of $1 billion or more gained 10.2% for the first quarter of 2015. Mashaal is known to be a contrarian value investor that likes “ugly” stock charts and aim for opportunities he believes will double or triple in price over one to three years. See more of his insights in this Bloomberg Video here.
Following funds like Rima Senvest Management is important because we want investors to take advantage of their best ideas without paying an arm and a leg. Our research has shown that, on average, hedge funds and billionaires aren’t very good at picking large-cap stocks but extremely talented at picking underfollowed small-cap stocks. The 50 most popular large-cap stocks among hedge funds actually underperformed the S&P 500 Total Return Index by an average of 7 basis points per month between 1999 and 2012.
Our back tests also revealed that the 15 most popular small-cap stocks among hedge funds beat the same S&P 500 Total Return Index by an average of 95 basis points per month. That’s an outperformance of almost a percentage point per month. We have been sharing the list of these top 15 small-cap stocks in real time since the end of August 2012. These stocks delivered an astonishing 134.1% gain through March 25th, vs. 54.2% gain for the S&P 500 ETF (SPY) (read the details here).
Google Inc (NASDAQ:GOOG) doesn’t typically fit the profile of a contrarian pick, but its potential could be too tempting to pass up. In the last quarter of 2014, Mashaal bought 61,501 Class C shares of Google Inc (NASDAQ:GOOG) for the firm for an investment of $32 million and representing a 2.3% in the firm’s 13F portfolio. Value investors seem to be loving this stock as we recently reported Warren Buffett disciple Mohnish Pabrai and “Tiger Cub” Lee Ainslie’s Maverick Capital involved in the name. Shares of Google Inc (NASDAQ:GOOG) added 4.1% in the first quarter of 2015.
Fiat Chrysler Automobiles NV (NYSE:FCAU) is another one of Mashaal’s new picks. He bought for the fund 4.5 million shares at an investment of $54 million which represents a 3.78% of the 13F portfolio. We mentioned Fiat Chrysler Automobiles NV (NYSE:FCAU) recently when we covered Mohnish Pabrai’s fund. Fiat Chrysler Automobiles NV (NYSE:FCAU) stock price appreciated by over 40% for the first quarter of 2015.
In the last quarter of 2014, it appears Mashaal’s conviction in Scorpio Tankers Inc. (NYSE:STNG) began to grow. Mashaal more than doubled the firm’s position in the oil transportation company and by year-end he accumulated for the firm 3.5 million shares of Scorpio Tankers Inc. (NYSE:STNG) for an investment of $31 million. The stock represents a 2.22% in the firm’s 13F portfolio. Ken Griffen’s Citadel Investment Corp appears to be very active in the stock as well as Remy Trafelet’s Trafelet Capital. Scorpio Tankers Inc. (NYSE:STNG) also appeared on our list of top picks by billionaire Marc Lasry. Scorpio Tankers’s stock price increased 9.9% for the first quarter of 2015.
Mashaal scored big with his pick, Howard Hughes Corp (NYSE:HHC). In the last quarter of 2014, he bought for the firm 369,000 shares of Howard Hughes Corp (NYSE:HHC) at a value of $48 million. By year-end Howard Hughes Corp (NYSE:HHC) accounted for a 3.4% position in Rima Senvest’s 13F portfolio. The stock appreciated in the first quarter by 18.8%. Murray Stahl’s Horizon Asset Management and Bill Ackman’s Pershing Square are the top two largest holders out of the funds we track.
Rima Senvest’s portfolio would have been better had it not been for Take-Two Interactive Software, Inc. (NASDAQ:TTWO). As of the beginning of 2015, Mashaal purchased for the firm 1.9 million shares of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) amounting to a $54 million investment. The position came out to be 3.86% of Remi Senvest’s 13F portfolio, and fell 9.1% for the first quarter of 2015. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) recently reported strong financial results for its fiscal third quarter with non-GAAP revenue rising 24$ to $954 million and the company also raised its outlook for fiscal year 2015.
At the end of 2014, 34 funds held long positions in the publisher of the Grand Theft Auto Series which was up from 30 funds at the end of the previous quarter. Among those funds, David Einhorn’s Greenlight Capital was the largest shareholder of Take-Two Interactive Software, Inc. (NASDAQ:TTWO) throughout 2014, ending the year with 4.70 million shares. Click here for more of our list of the hottest video game stocks.
