Looking For An Unheralded Stock to Buy? Algert Coldiron Investors Shares 5

Algert Coldiron Investors, led by Peter Algert and Kevin Coldiron, recently filed a Form 13F with the U.S. Securities and Exchange Commission for the reporting period of September 30. The fund’s equity portfolio contains a total of 302 positions, valued at more than $180 million as of the reporting period. The filing further shows that Algert Coldiron Investors has a strong focus on Technology, Consumer, and Industrial stocks. In this article, we are going to take a look at Algert Coldiron Investors’ top stock holdings, all of which are in under-the-radar companies.

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 53 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. a 48.7% gain for the S&P 500 Index (see the details here). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).

Peter Algert of Algert Global

#5 TRC Companies Inc. (NYSE:TRR)

Shares held (as of September 30): 174,217

Total Value (as of September 30): $2.06 million

Percent of Portfolio (as of September 30): 1.14%

Algert Coldiron Investors disclosed ownership of 174,217 shares of TRC Companies Inc. (NYSE:TRR), a $333.4-million engineering, environmental consulting, and construction management firm that provides integrated services to the energy, environmental, and infrastructure markets. Last month, TRC Companies Inc. (NYSE:TRR) and Willbros Group (NYSE:WG) entered into an agreement that will see TRC Companies acquire the Professional Services business segment of Willbros for $130 million in an all-cash transaction. The deal is expected to close during the second quarter of TRC’s fiscal year 2016. Shares of TRC Companies Inc. (NYSE:TRR) have increased by 16.56% during the last three months. Another investor that loves TRC Companies Inc. (NYSE:TRR) is Thomas E. Lynch’s Mill Road Capital Management, which holds 263,957 shares of the company as of June 30.

#4 Zagg Inc (NASDAQ:ZAGG)

Shares held (as of September 30): 311,054

Total Value (as of September 30): $2.11 million

Percent of Portfolio (as of September 30): 1.17%

The fourth-largest holding of Algert Coldiron Investors is represented by Zagg Inc (NASDAQ:ZAGG), in which the investor disclosed holding 311,054 shares, worth $2.11 million. The stake represents a quarter-over-quarter increase of 36%. Zagg Inc (NASDAQ:ZAGG) is a global mobile device accessories company, which reported income of $3.7 million for the third quarter, a notable improvement from the loss of $4.3 million it suffered in the same quarter last year, while its quarterly sales increased by 11% to $66.8 million. The improved financial situation has clearly had a positive impact on the company’s stock, which has gained around 33% year-to-date. Another investor betting big on Zagg Inc (NASDAQ:ZAGG) is Jim Simons’ Renaissance Technologies, which holds 1.26 million shares as of June 30.

On the next page, we will discuss Algert Coldiron Investors’ top three stocks, including Extreme Networks Inc (NASDAQ:EXTR).

#3 Extreme Networks Inc (NASDAQ:EXTR)

Shares held (as of September 30): 658,506

Total Value (as of September 30): $2.21 million

Percent of Portfolio (as of September 30): 1.23%

Holding the third spot in Algert Coldiron’s portfolio is Extreme Networks Inc (NASDAQ:EXTR). The investor was very bullish on Extreme Networks, in which it increased its stake by over 170% to 658,506 shares during the third quarter. Extreme Networks Inc (NASDAQ:EXTR) is engaged in providing wired and wireless network infrastructure equipment, software, and services to enterprises, data centers, and service providers. The company’s stock performance has been impressive of late, increasing by 65.61% during the last three months and certainly justifying the bullishness of Algert Coldiron. Another investor from our database that holds a stake in Extreme Networks Inc (NASDAQ:EXTR) is Paul J. Isaac’s Arbiter Partners Capital Management, which owns 4.90 million shares of the company.

#2 Cardinal Health Inc (NYSE:CAH)

Shares held (as of September 30): 34,510

Total Value (as of September 30): $2.65 million

Percent of Portfolio (as of September 30): 1.47%

Algert Coldiron disclosed holding 34,510 shares of Cardinal Health Inc (NYSE:CAH) as of September 30, representing a 40% increase to the position over the quarter. Having a market cap of $28.37 billion, Cardinal Health Inc (NYSE:CAH) is engaged in providing healthcare services and products. It operates in two segments: pharmaceutical and medical, from its head office in Ohio. The financial outlook of Cardinal Health looks quite strong, as the company posted a 17% increase in its revenue to $28.1 billion for its first quarter of fiscal year 2016. Furthermore, it reported a 30% increase in operating earnings to $737 million, driven by strong performance in the pharmaceutical segment. This performance prompted the company to raise its full-year EPS guidance range to $5.15-to-$5.35 from a prior range of $4.85-to-$5.05. Shares of Cardinal Health Inc (NYSE:CAH) have increased by nearly 7% year-to-date. Cliff Asness’ AQR Capital Management is also a fan of Cardinal Health Inc (NYSE:CAH), with ownership of 2.12 million shares of it on June 30.

#1 Ennis Inc. (NYSE:EBF)

Shares held (as of September 30): 202,513

Total Value (as of September 30): $3.52 million

Percent of Portfolio (as of September 30): 1.95%

The firm’s top holding is represented by Ennis Inc. (NYSE:EBF), a $512.61 million company engaged in the production and sale of business forms, apparel, and other business products. Algert Coldiron was bullish on Ennis Inc. (NYSE:EBF) during the third quarter, increasing its position by 100% to 202,513 shares, worth $3.52 million. Ennis Inc. (NYSE:EBF) posted solid financial results for the three months ended August 31, with its earnings jumping to $11.0 million, or $0.43 per diluted share, representing a 10.3% increase year-over-year. Sales for the quarter were down slightly however, to $150.8 million from $151.8 million a year ago. Shares of Ennis Inc. (NYSE:EBF) have been performing well, gaining 48.26% year-to-date. Among the largest shareholders of the company is Chuck Royce’s Royce & Associates, with ownership of 717,344 shares.

Disclosure: None