Jason Karp is bullish on SunOpta, Inc. (USA) (NASDAQ:STKL) having more than doubled his investment in the company, as reported in a recent filing with the Securities and Exchange Commission. Karp’s fund Tourbillon Capital Partners has disclosed ownership of 5.22 million shares, up from the 2.0 million shares reported in its latest 13F filing for the period of June 30. The current position gives Karp and Tourbillon control over 7.6% of SunOpta’s common stock. In another filing, Berkshire Partners’ subsidiary, Stockbridge Partners, managed by Robert J. Small, has reported the addition of approximately 800,000 shares of Advanced Drainage Systems Inc (NYSE:WMS) to its previous stake, taking it to 3.66 million shares or 6.9% of the company’s total number of shares outstanding.
Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by more than 60 percentage points since the end of August 2012. These stocks returned a cumulative of 118% vs. less than a 58% gain for the S&P 500 Index (read the details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).
A former understudy of Steven Cohen, Jason Karp started his own fund, Tourbillon Capital Partners in 2013, with an initial injection of $250 million in capital. Since then, the fund has grown to manage an equity portfolio valued at $4.6 billion according to its latest 13F filing. Karp is betting big on consumer discretionary stocks, having invested nearly 40% of his funds in companies from this sector. He is also a fan of tech stocks, which represent several of his biggest bets. Karp’s top stock pick is Expedia Inc (NASDAQ:EXPE) with Tourbillon Capital holding 3.13 million shares valued at $342 million. Amazon.com, Inc.(NASDAQ:AMZN) is also among his favorite tech stocks and his faith has been handsomely rewarded, as the online retail giant has surprised the market with great financial results this year. Tourbillon owns 375,000 shares, up by 3% during the second quarter, worth roughly $162 million.
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SunOpta, Inc. (USA) (NASDAQ:STKL) engages in the processing and marketing of natural, organic, and specialty food products and has spread its business operations across North America, Europe, and China. So far this year, the stock has fallen by approximately 25% up to yesterday’s closing price of $8.95 per share. SunOpta’s 2015 second quarter financial results fell short of Wall Street’s expectation, with the company posting revenues of $307 million and earnings per share of $0.05. In order to meet growing consumer demand, SunOpta, Inc. (USA) (NASDAQ:STKL) has continued investing in stand-up pouch packaging technology across several of its US-based facilities. According to Rik Jacobs, the company’s Chief Operating Office, “the enhanced technology and added capacity has led to new customers and expanding order volumes from existing customers.” Chuck Royce, the manager of Royce & Associates, is also a fan of SunOpta, having increased his exposure by 15% during the second quarter to some 3.15 million shares worth $33.8 million. Hedge fund guru Jim Simons, on the other hand, has dumped a third of his stake in the company, leaving his fund, Renaissance Technologies, with 157,700 shares valued at $1.69 million.
Stockbridge Partners was launched by Berkshire Partners in 2007 and is run by Robert J. Small, who has been with the parent firm since 1992. A former employee of Goldman Sachs and Bain & Co., Small has helped his fund grow to manage more than $2 billion in assets. His portfolio is diversified among several sectors, with industrial and consumer discretionary stocks accounting for more than half of his picks. Robert Small’s investment decisions are long-term oriented and he focuses only on a handful of companies. His top bet continues to be TransDigm Group Incorporated (NYSE:TDG), with Stockbridge Partners holding 1.33 million shares worth just shy of $300 million of the company. During the second quarter, Small made a big play in SBA Communications Corporation (NASDAQ:SBAC), boosting his stake by 75% to 1.04 million shares valued at $120 million.
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Among the hedge funds that we track, 12 West Capital Management, led by Joel Ramin, holds the biggest investment in Advanced Drainage Systems Inc (NYSE:WMS), of 4.27 million shares valued at $125 million. Jim Simons is also bullish on this stock, having initiated a position during the second quarter of 2015, of 136,177 shares valued at $3.99 million. A manufacturer of water management products, Advanced Drainage Systems Inc (NYSE:WMS) has a market cap of $1.46 billion and pays an annual dividend of $0.20. So far this year, the stock has been on an uptrend, finishing yesterday’s trading session at $28.08 per share. The company is currently entangled in a lawsuit, having allegedly released misleading financial statements to investors. Investor suspicions were confirmed when the company delayed its annual report for the fiscal year ending March 31, 2015 and announced that certain changes would be made to the previously-issued earnings reports.
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