Should You Love These 5 Stocks As Much As CQS Cayman Does?

Michael Hintze’s CQS Cayman LP recently filed its latest 13F with the U.S. Securities and Exchange Commission for the reporting period of September 30. The fund’s equity portfolio contains 153 positions, and was valued at $1.20 billion as of that date. Founded by Michael Hintze in 1999, CQS Cayman is a global multi-strategy asset management firm. It has around $9 billion in total assets under management. CQS Cayman has a diversified portfolio, which includes consumer, technology, healthcare, finance, industrials, materials, energy, and transport stocks. In this article, we will be taking a closer look at CQS Cayman’s top stock picks.

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.

5. Sigma-Aldrich Corporation (NASDAQ:SIAL)

Shares held (as of September 30): 102,050

Total Value (as of September 30): $14.18 million

Percent of Portfolio (as of September 30): 1.18%

CQS Cayman was bullish on Sigma-Aldrich Corporation (NASDAQ:SIAL) during the third quarter. The investor increased its position in the company by over 80% to 102,050 shares, worth more than $14 million. St. Louis, Missouri-based Sigma-Aldrich Corporation is a life science and technology company, with a market cap of $16.8 billion. In the third quarter, the company saw an $8 million decline in operating income to $162 million, compared to the same period of last year despite its sales for the third quarter rising to $703 million, versus $690 million last year. A total of 37 hedge funds among those that we track were holding stakes in Sigma-Aldrich Corporation (NASDAQ:SIAL) at the end of the second quarter. This represents a decrease from 42 funds at the end of the first quarter, while the aggregate value of their investments rose to $1.67 billion compared to $1.54 billion at the end of the first quarter. One of those other investors that sees value in Sigma-Aldrich is Thomas Steyer’s Farallon Capital, holding 1.99 million shares.

4. Liberty Global plc (NASDAQ:LBTYK)

Shares held (as of September 30): 349,110

Total Value (as of September 30): $14.32 million

Percent of Portfolio (as of September 30): 1.19%

CQS Cayman cut its position in Liberty Global plc (NASDAQ:LBTYK) by over 70% to 349,110 shares during the third quarter. Shares of the international cable company that operates in 14 countries are struggling of late amid weak sentiment for the industry, losing nearly 19% during the third quarter and nearly 9% year-to-date. The total number of hedge funds from our database that hold Liberty Global slipped to 88 at the end of the second quarter from 90 at the end of the first quarter, with the aggregate value of their investments decreasing to $9.67 billion, versus $10.14 billion at the end of the first quarter. Another investor that loves Liberty Global is Boykin Curry’s Eagle Capital Management, which holds over 30 million shares.

On the next page, we will be talking about another cable company, Comcast Corporation (NASDAQ:CMCSA) as well as two other stocks.

3. Comcast Corporation (NASDAQ:CMCSA)

Shares held (as of September 30): 582,454

Total Value (as of September 30): $33.13 million

Percent of Portfolio (as of September 30): 2.76%

While CQS Cayman slashed its position in Liberty Global, it replaced it with Comcast Corporation (NASDAQ:CMCSA), a new holding for the firm. Comcast Corporation is a media and technology company, with its two main businesses being Comcast Cable and NBCUniversal. For the three months ended September 30, Comcast Corporation (NASDAQ:CMCSA) reported an 11% increase in revenue to $18.7 billion, while income was down by 23% year-over-year to $2 billion. At the end of the second quarter, the aggregate number of hedge funds holding Comcast, among those that we track, fell to 76 from 91 at the end of the first quarter. However, the aggregate value of their investments rose to $7.39 billion, up by $200 million. One of the largest shareholders of Comcast within our database is Paul Ruddock and Steve Heinz’s Lansdowne Partners, with ownership of over 23 million shares on June 30.

2. Carnival Corp (NYSE:CCL)

Shares held (as of September 30): 768,396

Total Value (as of September 30): $38.16 million

Percent of Portfolio (as of September 30): 3.18%

In Carnival Corp (NYSE:CCL), CQS Cayman disclosed ownership of 768,396 shares worth $38.16 million, with the stake representing a 12% increase over the quarter. Carnival Corp is a Miami, Florida-based cruise vacation company, with a market cap of $41.37 billion. For the firm’s fiscal third quarter ending Aug. 31, its income slipped to $1.21 billion, or $1.56 a share, compared to $1.24 billion, or $1.60 a share, in the same period of last year. Revenue also fell by 1.3% to $4.9 billion. Carnival Corp is putting more focus on China, as the company recently formed a $4 billion joint venture with two Chinese companies to launch a cruise line for the Chinese market. Shares of Carnival are enjoying a strong performance this year, increasing by 16.46% year-to-date. A total of 49 hedge funds among those that we track at Insider Monkey were holding stakes in Carnival Corp (NYSE:CCL) at the end of the second quarter, the number remaining flat during the quarter. One of those investors is Kerr Neilson’s Platinum Asset Management, which owns over 9.0 million shares of the company on June 30.

1. Ryanair Holdings plc (ADR) (NASDAQ:RYAAY)

Shares held (as of September 30): 645,557

Total Value (as of September 30): $51.76 million

Percent of Portfolio (as of September 30): 4.31%

CQS Cayman increased its position in Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) during the third quarter by over 80% to 645,557 shares. Ryanair Holdings is a holding company of Ryanair Ltd., which operates a low-fare, scheduled-passenger airline in Europe. Shares of Ryanair Holdings have increased by 14.38% year-to-date. During the second quarter, the total number of hedge funds among those that we track holding Ryanair Holdings plc (ADR) (NASDAQ:RYAAY) rose to 19 at the end of June from 16 at the end of the first quarter, while the aggregate value of their investments increased to $406.11 million compared to $308.54 million, so smart money was growing increasingly bullish on the stock. Another large shareholder of Ryanair Holdings is Jim Simons’ Renaissance Technologies, which owns 3.32 million shares of the company.

Disclosure: None