Sloane Robinson Investment Management is a London-based long/short equity hedge fund founded by Hugh Sloane and George Robinson in 1993. The fund employs a combination of both a top-down and bottom-up approach to stock selection. Although Sloane Robinson Investment Management primarily invests in equities in European, Pacific, and emerging markets, it also manages a sizable U.S. public equity portfolio. The fund recently filed its 13F for the reporting period of June 30, and according to the filing the firm’s U.S. equity portfolio was worth $101.66 million at the end of June, with 89% of that invested in stocks from the information technology sector. The fund’s U.S. equity portfolio is highly concentrated, with its top ten holdings accounting for 99% of the portfolio value. During the second quarter, Sloane Robinson Investment Management increased its stake in four stocks and initiated a stake in five other stocks, and we’ll look at three such stocks in this article (two of the former, one of the latter), which represent the fund’s most bullish plays during the quarter. Those stocks are Hollysys Automation Technologies Ltd (NASDAQ:HOLI), Taiwan Semiconductor Mfg. Co. Ltd. (ADR)(NYSE:TSM), and Harman International Industries Inc./DE/(NYSE:HAR).
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 65 percentage points since the end of August 2012. These stocks returned a cumulative of 123% vs. 58% gain for the S&P 500 Index (read the details). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).
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Hollysys Automation Technologies Ltd (NASDAQ:HOLI) climbed up a rank from the end of the first quarter to become Sloane Robinson Investment Management’s top holding following the close of the second quarter. The fund increased its stake in the company by 74% during the quarter and as of June 30, owned over 1.68 million shares worth $40.42 million. Hollysys Automation Technologies Ltd (NASDAQ:HOLI) is a leading provider of automation and control products and technologies in China, the Middle East, and Southeast Asia. On June 25, the company reported that it had won a contract worth almost $21.16 million to supply its proprietary supervisory control and data acquisition system (SCADA) to Shenzhen Subway Line 11. This was followed by another announcement on July 7 that it had won a similar contract worth $12.26 million to supply its proprietary SCADA to Lanzhou Subway Line 1. Hollysys Automation Technologies Ltd (NASDAQ:HOLI) will be reporting its fiscal 2015 fourth quarter results on August 13. Analysts expect the company to report a 10% year-over-year increase in EPS to $0.41. At the end of June, Chuck Royce‘s Royce & Associates owned 405,982 shares of the company.
