Michael Hintze is the CEO of CQS Cayman LP, a diversified fund established in 1999. The fund has around $9 billion in total assets under management and has two main offices, in London and Hong Kong, with smaller outlets in the Channel Islands, the Cayman Islands and Switzerland. CQS Cayman’s latest 13F revealed an equity portfolio valued at $2.13 billion, with a total of 208 positions. In this article we’ll analyze Michael Hintze’s largest holdings as of the reporting period, March 31. The companies that represent these holdings are: JetBlue Airways Corporation (NASDAQ:JBLU), Twenty-First Century Fox Inc (NASDAQ:FOX), Energizer Holdings, Inc. (NYSE:ENR) and Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP).
MAHATHIR MOHD YASIN / Shutterstock.com
CQS Cayman LP is one of more than 700 hedge funds that we track as part of our small-cap strategy. Our research has shown that imitating a portfolio of the 15 most popular small-cap picks among these funds can generate an average of around 1.0 percentage point in excess of the S&P 500 Total Return Index’s monthly returns. Moreover, these small-cap picks had an alpha of around 80 basis points per month, compared with the 50 most popular stocks among hedge funds (mostly large- and mega-cap stocks), which had a monthly alpha of just six basis points. This small-cap strategy managed to post gains of over 139% in the last 32 months since we started following it in real time, outperforming the S&P 500 ETF (SPY) by over 80 percentage points (read more details here).
On the first spot is CQS Cayman LP’s new position in JetBlue Airways Corporation (NASDAQ:JBLU) of 9.59 million shares valued at $184.64 million, which represents 8.69% of its portfolio. JetBlue Airways Corporation (NASDAQ:JBLU) is an air carrier which handles 32 million customers to 87 cities in the U.S., Caribbean, and Latin America. Recently, the company was awarded the title of “Highest in Customer Satisfaction among Low-Cost Carriers in North America” from J.D. Power’s 2015 Airline Satisfaction Study. JetBlue Airways Corporation (NASDAQ:JBLU) reported for the first quarter of 2015 net income of $137 million or $0.40 per diluted share, compared to just $4 million and $0.01 per diluted share respectively for the year-ago quarter. James Dondero’s Highland Capital Management, Anthony Bozza’s Lakewood Capital Management and Donald Chiboucis’ Columbus Circle Investors are also among JetBlue Airways Corporation (NASDAQ:JBLU)’s shareholders.
Hintze’s stake in Twenty-First Century Fox Inc (NASDAQ:FOX) is the second largest long position in its equity portfolio, with a value of $127.08 million. During the first quarter of 2015, CQS Cayman cut its position in the company by 20% to 3.87 million shares. The Rupert Murdoch-led company is the world’s leading media and entertainment conglomerate, and posted quarterly net income of $1.04 million, or $0.47 diluted EPS for its fiscal third quarter of 2015. Over this period, Twenty-First Century Fox Inc (NASDAQ:FOX) repurchased 59 million shares for $2.1 billion. Other investors that hold large positions in the company are Yacktman Asset Management managed by Donald Yacktman, Jeffrey Ubben’s ValueAct Capital and Eagle Capital Management run by Boykin Curry.
Next in line is Energizer Holdings, Inc. (NYSE:ENR), one of Hintze’s picks from the industrial sector. CQS Cayman LP boosted its position in the company by more than 390,000 shares to 480,750 shares valued at $66.37 million. Energizer Holdings, Inc. (NYSE:ENR) announced the initiation of a debt offering of $600 million of senior notes till 2025, by its subsidiary, Energizer SpinCo, Inc. Energizer Holdings, Inc. (NYSE:ENR)’s net income decreased by 5.1% to $1.01 billion for the first three months of 2015. Among the funds we track, Kenneth Mario Garschina’s Mason Capital Management, Mario Gabelli’s Gamco Investors and Ken Griffin’s Citadel Investment Group held large positions in Energizer Holdings, Inc. (NYSE:ENR) as of the end of 2014.
Finally, the fourth-largest long position in terms of value is represented by Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP), in which CQS Cayman owns 153,291 shares worth $26.49 million, which represents 1.25% of the fund’s portfolio. The company has a market cap of $10.94 billion and during the last 52 weeks, the stock price of Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) has fluctuated dramatically, between $86.00 and $172.98 per share, with it currently resting around that 52-week high level and up by 50% year-to-date. The largest shareholders of Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) among the funds from our database are John Paulson’s Paulson & Co, Jacob Gottlieb’s Visium Asset Management, and Andreas Halvorsen’s Viking Global.
Disclosure: None
