According to separate 13G forms filed with the SEC, Doug Silverman and Alexander Klabin‘s Senator Investment Group and Richard Gerson and Navroz D. Udwadia‘s Falcon Edge Capital have increased their respective holdings in Realogy Holdings Corp (NYSE:RLGY) and Pandora Media Inc (NYSE:P). After an 88% boost to its Realogy position, Senator Investment Group now owns 7.5 million shares, which represent 5.12% of the company’s outstanding shares. Falcon Edge on the other hand increased its Pandora Media Inc (NYSE:P) holding by 148% to 11.62 million shares, amassing 5.5% of the media company’s outstanding stock in the process.
Alexander Raths/Shutterstock.com
Prior to establishing Senator Investment in 2008, the two founders worked for James Dinan’s York Capital Management. Currently the market value of the firm’s public equity portfolio stands at $11.49 billion with 24% of the investments being in the consumer discretionary sector. As for Falcon Edge, the fund was founded in 2012 and has a public equity portfolio worth about $1.32 billion, with 20% of its holdings in the healthcare sector.
Follow Douglas Silverman And Alexander Klabin's Senator Investment Group
An everyday investor does not have the time or the required skill-set to carry out an in-depth analysis of equities and identify companies with the best future prospects like a fund with the knowledge and resources of Visium can. However, it is also not a good idea to pay the egregiously high fees that investment firms charge for their stock picking expertise. Thus a retail investor is better off to monkey the most popular stock picks among hedge funds by him or herself. But not just any picks mind you. Our research has shown that a portfolio based on hedge funds’ top stock picks (which are invariably comprised entirely of large-cap companies) falls considerably short of a portfolio based on their best small-cap stock picks. The most popular large-cap stocks among hedge funds underperformed the market by an average of seven basis points per month in our back tests whereas the 15 most popular small-cap stock picks among hedge funds outperformed the market by nearly a percentage point per month over the same period between 1999 and 2012. Since officially launching our small-cap strategy in August 2012 it has performed just as predicted, beating the market by over 60 percentage points and returning 118%, while hedge funds themselves have collectively underperformed the market (read the details here).
Senator has held a stake in Realogy Holdings Corp (NYSE:RLGY) since the third quarter of 2013. The stock price of the company has depreciated by nearly 5.5% since then, with the most recent major slide coming at the end of July as the shares have slid by almost 20%. The recent market correction and resultant slide of the stock could be one of the reasons why Senator has decided to boost its stake in the company.
The $5.81 billion provider of real estate services in the United States operates in four segments, namely franchising, relocation, settlement, and brokerage. Also, Realogy Holdings Corp (NYSE:RLGY) has a joint venture in mortgage with PHH Corporation (NYSE:PHH). In its financial results for the second quarter the company delivered EPS of $0.66, which came in $0.03 lighter than what analysts expected, though the revenues of $1.65 billion were in-line with the estimates. The company benefited from the recovery in the housing market, which according to a report by the National Association of Realtors, saw the highest pace of sales in eight years in June. Realogy Holdings Corp (NYSE:RLGY) saw the largest gains in sales in the West and Midwest regions.
Stephen Mandel‘s Lone Pine Capital and John Paulson’s Paulson & Co are the largest stockholders of Realogy Holdings Corp (NYSE:RLGY) within our database, holding some 10.41 million shares and 7.04 million shares respectively.
As for Pandora Media Inc (NYSE:P), Falcon Ridge initiated a stake in the $3.82 billion provider of internet radio services during the first quarter of this year. The stock price has risen by more than 25% since then. This was backed by both a top and bottom line beat by the company in its financial results for the June trimester. The celebration of the company’s 10th anniversary this September involves an ad-free day for all of its users. Only 5% of the company’s active users have paid-subscriptions, which is pretty low considering the 26% figure that rival Spotify boasts. Perhaps measures like these will give users a feel for the ad-free service and help Pandora Media Inc (NYSE:P) improve its monitization rate.
Follow Richard Gerson, Navroz Udwadia, And Ryan Khoury's Falcon Edge Capital
Ricky Sandler‘s Eminence Capital, which is the largest stockholder of Pandora Media Inc (NYSE:P) among the investors that we track increased its holding in the company by 28% during the June trimester to 10.07 million shares valued at $156.44 million.
Disclosure: None
