Daniel Och started Och-Ziff Capital Management almost twenty years ago, and it has become one of the largest institutional managers of alternative assets since then. A subsidiary of the firm is OZ Management, a fund that must comply with the SEC’s quarterly requirements of position disclosure. We take keen interest in these holdings, as we have found that the most popular small-cap stocks amongst hedge fund managers can handily outperform the market (see here for our double-digit return strategy). OZ management initiated a number of new positions in Q4 2012; read below to see some of the biggest and best additions.
News Corp (NASDAQ:NWSA) received a $214mm allocation from Och this past quarter, amounting to less than a percent of the fund’s portfolio. The multimedia enterprise continues to expand its wide breadth of cable offerings and business divisions, helping to push the stock up over 50% in the last twelve months. News Corp.’s most recent earnings release on February 6th unveiled growth across cable and television operations and positive sentiment for the publishing division as well. The company plans to break up into separate publishing and entertainment companies by the end of this year. Billionaire Seth Klarman of Baupost Group keeps 6.6% of his portfolio in News Corp (NASDAQ:NWSA) (read about his top holdings here).
Express Scripts Holding Company (NASDAQ:ESRX) is a healthcare administration and management services provider with a market cap of $48bn. ESRX has a respectable following amongst the funds we track, with 74 claiming ownership. Recent analyst activity includes a downgrade to Neutral by Macquarie on the twentieth of last month. Express Scripts Holding Company (NASDAQ:ESRX) took a 24% spill after revealing a large revenue miss in its Q3 earnings report last November; this latest report for Q4 showed that earnings and revenues were much more inline with Wall Street’s expectations and displayed a bullish 74% jump in net profit. Israel Englander of Millennium Management owns over 800,000 shares in his fund (check out his top five stocks here).
Coca-Cola Enterprises Inc (NYSE:CCE) is the European remainder of what used to be the dominant bottler of Coke products in the U.S. In 2010, CCE sold its U.S. bottling operations to the Coca-Cola Company (NYSE:KO), keeping its distribution network in Western Europe and Scandinavia. Coca-Cola Enterprises Inc (NYSE:CCE) has been a respectable winner for those investors who got in this time last year; the stock returned 30% and still has another 5% to go according to analysts’ price targets. The company announced in the beginning of February that it would be increasing its quarterly dividend by 25% from $0.16 to $0.20. Billionaire David Harding of Winton Capital Management keeps almost $6mm worth in his portfolio (take a look at the fund’s positions here).
Which stocks are the best of the rest?
Real estate and relocation service provider Realogy Holdings Corp (NYSE:RLGY) received an investment of just under $90mm from OZ. The holding company owns and operates realtor brands such as Century 21 and Coldwell Banker. RLGY debuted on the NYSE in the middle of October last year and has returned 38% to investors since then. Some of Realogy’s notable stakeholders include John Paulson and Apollo Global Management; Apollo owns half of the company. Aforementioned billionaire John Paulson owns over 13.3mm shares in his fund, Paulson & Co (view the fund’s portfolio here).
Global specialty chemicals and materials manufacturer W.R. Grace & Co. (NYSE:GRA) occupies the last spot on our list, as it collected slightly over $80mm of OZ Management’s capital. Although the company’s latest earnings announcement delivered a beat over analyst’s EPS and revenue predictions, revenues suffered a small drop of 3.4% versus the same quarter last year. The stock is currently about 10% away from its projected price targets for a year out; it has already appreciated by 37% in the past twelve months. Billionaire Ken Griffin of Citadel Investment Group recently bumped up his share count by over 43%, according to his latest 13F (see his fund’s top stocks here).
Disclosure: I do not own shares of any stocks mentioned in this article.
