Seawolf Capital, managed by Porter Collins, Daniel Moses, and Vincent Daniel have filed a 13F with the SEC, declaring their holdings at the end of 2014. The value of their equity portfolio dipped to $391 million at the end of the year, from $431 million at the end of the third quarter, as they closed 25 of their previously held 49 positions, with many of their 20 new positions being smaller in size. Unsurprisingly, their top picks are similar to those of the previous quarter, with Nelnet, Inc. (NYSE:NNI) retaining the top spot for the fourth straight quarter.
Seawolf Capital was founded in 2011 by Atwood (Porter) Collins, a three-time world rowing champion and two-time U.S Olympian, along with Moses and Daniel. The trio left the now-defunct FrontPoint Partners, where Collins was a senior analyst, to start their own hedge fund, contrary to the expectations that they would follow former FrontPoint manager Steve Eisman to his new fund Emrys Partners, also now defunct. Seawolf employs both long /short equity positions, and hedge plays in their portfolio, and typically invest in companies within the financial services sector.
As mentioned, Nelnet, Inc. (NYSE:NNI) has been Seawolf’s top pick for the past year. They first opened their position in the fourth quarter of 2012 as one of their first investments, and have steadily built upon it since. This past quarter is one of the few times they’ve trimmed their exposure to Nelnet, selling off 24,776 shares during the quarter, leaving them with 625,488 total, a decrease of 3%.
The financial services company deals in federal and private loans for education, as well as financial planning services, and operates a number of businesses in the financial and educational sectors. Nelnet, Inc. (NYSE:NNI)’s most recent quarterly results, for the third quarter of 2014 came in slightly below expectations, with earnings of $1.45 per share down from the $1.48 per share that bnoth represented their 2013 third quarter earnings, as well as analysts estimates. Nelnet releases their fourth quarter and full-year results after the close of trading on February 26.
Kennedy-Wilson Holdings Inc (NYSE:KW) is Seawolf Capital’s second choice, increasing their position by 5% to 843,720 shares. The Beverly Hills, California-based real-estate and investment services company has long been a top pick of Fairfax Financial’s Prem Watsa, who holds an 11.5 million stake of fully diluted shares in the company. Kennedy-Wilson has enjoyed a strong run since the end of 2011, up more than 150%.
The company, which operates throughout the U.S, Europe, and Japan, reported earnings per share of $0.34 for the third quarter of 2014, toppling analysts estimates of a $0.19 per share loss. Revenue was up 242.5% from the same year-ago quarter, to $113.70 million. The consensus estimate had predicted just $83.40 million in revenue. Kennedy-Wilson Holdings Inc (NYSE:KW) releases their fourth quarter and fiscal year 2014 results on February 25.
Next is UEPS Technologies Inc (NASDAQ:UEPS), a financial payment solutions provider with a focus on bringing smart card payment technology to underserved regions. Seawolf Capital increased their position in UEPS by 30% to 1.84 million shares. This is another position they have reported ownership of since their first 13F filing at the end of 2012, and has gone from being the 27th most valuable in their portfolio at the time, to the third-most valuable.
UEPS Technologies Inc (NASDAQ:UEPS) has proven to be one of their best investments, gaining 73.14% in 2013, and following that up with a 31.46% gain in 2014. 2015 has thus far been more of the same, with UEPS up 12.28% for the year, thanks largely to a strong earnings report on February 7 which beat estimates with $0.57 earnings per share, compared to the estimated earnings per share of $0.48.
Assured Guaranty Ltd. (NYSE:AGO), one of the largest providers of bond insurance and credit enhancement services in the U.S, was Seawolf’s most bullish pick of the quarter, as they increased their holding by 613%, adding 682,400 shares, giving them 793,600 total.
Assured Guaranty had earnings of $355 million in the third quarter of 2014, repurchased 9.6 million of the company’s shares, and towards the end of the year, announced an agreement to acquire Radian Asset Assurance Inc., the financial guaranty business of Radian Group Inc (NYSE:RDN), of which Seawolf is also an investor.
Seawolf made clear their position on that deal, which was valued at $810 million, in their moves, as they fled from Radian Group (chopping their position by 52%) and into Assured Guaranty. The latter is up 3.42% since the transaction was announced, while the former is down 1.23%.
Lastly, we come to PHH Corporation (NYSE:PHH), while fell from second to fifth in value in Seawolf’s portfolio, as they trimmed their position by 15% to 856,478 shares. This is another stock which Seawolf has been in since 2012, and one which had a very strong 2012. Since then however it has mostly leveled off, and is down slightly since it announced it would sell its Fleet Management Services business to Canada’s Element Financial Corp. on June 2, 2014.
PHH Corporation (NYSE:PHH),primarily a mortgage services and home financing company, announces their fourth quarter and fiscal year 2014 results on February 18.
Disclosure: None
