Nebula Capital Management’s Biggest Q1 Moves

Nebula Capital Management is a long/short equity hedge fund based in Connecticut. The fund was founded in 2008 by Aleem Mawji, who was a Senior Portfolio Manager and Managing Director in JPMorgan’s Proprietary Trading Business prior to starting Nebula Capital. According to the fund’s latest submitted Form ADV, its assets under management (AUM) as of March 24 stood at $203.65 million. The fund recently submitted its 13F filing with the SEC for the reporting period ending March 31, revealing a U.S equity portfolio worth $140.97 million, 10.6% less than what it was worth at the end of 2015. The filing also revealed that during the first quarter, Nebula Capital initiated a stake in four stocks and sold out of four stocks. In this post, we will be discussing the five most notable moves made by the fund during the first quarter.

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#5 FleetCor Technologies, Inc. (NYSE:FLT)

 – Shares held by Nebula Capital Management (as of March 31): 12,000

 – Value of Holding (as of March 31): $1.78 million

FleetCor Technologies, Inc. (NYSE:FLT) was a new addition to Nebula Capital Management’s equity portfolio during the first quarter. The financial services company’s shares started 2016 on a weak note, like the shares of most of its peers, but managed to recoup all of those losses by the end of the first quarter and are currently trading up by 7% year-to-date. Earlier this year, the company announced that it has agreed to acquire Brazilian electronic toll payment company STP for $1.05 billion. On May 4, FleetCor Technologies, Inc. (NYSE:FLT) reported its first quarter results, declaring EPS of $1.53 on revenue of $414.30 million for the period, beating analysts’ EPS expectations of $1.49, but missing revenue estimates of $417.86 million. Following the earnings release, analysts at Barclays boosted their price target on the stock to $160 from $150 on May 5, while keeping their rating on it unchanged at ‘Overweight’. Brad Dunkley and Blair Levinsky‘s Waratah Capital Advisors also initiated a stake in FleetCor Technologies, Inc. (NYSE:FLT) during the first quarter, purchasing 9,950 shares of the company.

#4 Dollar Tree, Inc. (NASDAQ:DLTR)

– Shares held by Nebula Capital Management (as of March 31): 36,845

– Value of Holding (as of March 31): $3.04 million

Nebula Capital Management reduced its stake in Dollar Tree, Inc. (NASDAQ:DLTR) by 70% during the first quarter, relegating the company to the 21st position in its portfolio, down from the third spot at the end of 2015. Dollar Tree, Inc. (NASDAQ:DLTR)’s stock has been range-bound for the last five months, though it currently boasts year-to-date gains of 4.28%. When the Dollar Tree/Family Dollar merger was completed last year, most analysts were optimistic about the prospects of the new company, but the high level of debt on its balance sheet and increasing competition in the discount retail industry has now made some analysts skeptical about the company’s growth over the long-term. Nevertheless, the majority of analysts still remain bullish on  the company. Dollar Tree currently sports an average rating of ‘Overweight’ and an average price target of $88.01 from the 25 prominent analysts and brokerage houses on the Street that cover it. Hedge funds that increased their stake in the company during the first quarter included Barry Dargan‘s Intermede Investment Partners, which brought its holding up by 41% to 467,419 shares.

Three more moves made by Nebula Capital during the first quarter are discussed on the next page.