Hedge Funds Disclose Moves In These 3 Companies Ahead of Christmas

All U.S. investors who manage more than $100 million in capital are required to file with the SEC their 13F quarterly filings within 45 days of the end of each quarter. One can track and investigate these public filings so as to see where the world’s most successful investors see value, but the latest round of 13F filings is long overdue. Nonetheless, individual investors who still believe in hedge funds’ stock picking abilities can also track their 13D, 13G, and Form 4 filings. As a general rule, these filing provide more up-to-date insights about hedgies’ stances on certain companies. For that reason, this article will discuss three fresh filings submitted with the SEC by several hedge funds tracked by Insider Monkey.

At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 102% and beating the market by more than 53 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.

According to a freshly-amended 13D filing, Robert G. Moses’ RGM Capital LLC owns 3.88 million shares in Guidance Software Inc. (NASDAQ:GUID), which represent 12.68% of the company’s outstanding common stock. This denotes an increase of 340,000 shares from the position revealed through RGM Capital’s 13F filing for the September quarter. The shares of this provider of digital investigative solutions have lost nearly 22% so far in 2015. The company’s EnCase platform represents a network-enabled digital investigative solution that allows corporations and government agencies to search, collect and analyze data across servers, desktops and laptops in order to tackle litigation matters, allegations of fraud, suspicious network activity, among other things. Guidance Software Inc. (NASDAQ:GUID)’s total revenue for the nine-month period ended September 30 reached $79.38 million, down from $80.41 million reported for the same period of 2014. Even though the company’s services revenue and maintenance revenue increased year-on-year, the decline in product revenue was more than enough to offset the higher revenue in the other two reporting segments. However, the company managed to reduce its nine-month net loss to $10.82 million from $11.67 million despite experiencing sluggish revenue growth. A total of 11 hedge funds from our database had stakes in the company at the end of the September quarter, accumulating 16.50% of its outstanding shares. Jim Simons’ Renaissance Technologies lifted its stake in Guidance Software Inc. (NASDAQ:GUID) by 25% during the third quarter to 263,100 shares.

Let’s move on to the second page of this article, which covers two separate filings submitted by Levin Capital and Fairfax Capital.

In a Schedule 13G filing, Levin Capital Strategies L.P., managed by John A. Levin, reported owning 3.56 million shares in Milacron Holdings Corp (NYSE:MCRN), accounting for 5.3% of the company’s outstanding shares. This compares with the 1.27 million-share position revealed through the Levin Capital’s latest 13F filing. On June 30, the producer of plastics manufacturing equipment completed its initial public offering (IPO) by selling nearly 14.29 million shares at a price of $20.00 per share. The net proceeds from the IPO were used to repay some of its existing debt. Meanwhile, shares of Milacron Holdings Corp (NYSE:MCRN) have lost 35% since the IPO, but analysts have great expectations on the company’s earnings potential. The stock trades at a forward price-to-earnings ratio of 7.93, which is significantly lower than the average of 17.19 for the companies included in the S&P 500 Index. The company reported sales of $873.2 million for the first nine months of 2015, as compared with $890.8 million reported a year ago. Milacron has been implementing an organizational redesign and cost reduction initiatives, which are anticipated to result in annual run-rate cost savings of $35 million by the end of 2017. The number of smart money investors with positions in the company declined to 11 from 16, while the overall value of these positions shrank to $67.28 million from $152.04 million quarter-on-quarter. Ken Griffin’s Citadel Advisors reported owning 543,888 shares of Milacron Holdings Corp (NYSE:MCRN) through its most recent 13F filing.

As stated by another 13D filing, Prem Watsa’s Fairfax Financial Holdings currently holds a 28.24 million-share position in Resolute Forest Products Inc. (NYSE:RFP), which corresponds to 31.6% of the company’s outstanding common stock. The investment firm owned 29.05 million shares in the company on September 30, as revealed in the latest round of 13Fs. The company operates in the forest products industry, offering a wide array of products that include: newsprint, specialty papers, market pulp and wood products. The stock has lost 56% since the beginning of the year and appears to be in a bottoming-out phase at the moment. Resolute Forest Products Inc. (NYSE:RFP) sales for the first nine months of 2015 totaled $2.75 billion, down by 14% or $452 million year-over-year. This decrease was mainly attributable to lower shipments of specialty papers and newsprint, mainly due to capacity rationalization efforts driven by market dynamics. The company’s net income, excluding special items, for the nine-month period of this year reached $2 million, down from $4 million reported a year ago. Meanwhile, 20 hedge funds from our database had positions in the company at the end of the third quarter, amassing 48.40% of its outstanding shares. Michael Johnston’s Steelhead Partners cut its position in Resolute Forest Products Inc. (NYSE:RFP) by 23% during the July-to-September period to 6.95 million shares.

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