Intermede Investment Partners is a London-based hedge fund that focuses on a single strategy – global equity. The fund was founded by Barry Dargan in 2013 and started managing client money in October 2014, following its joint venture with National Australia Bank in April 2014. Mr. Dargan is a Chartered Accountant and prior to founding Intermede Investment Partners served as a Partner, Managing Director and Portfolio Manager at Artisan Partners. Intermede Investment Partners has submitted its 13F filing with the Securities and Exchange Commission (SEC), revealing a US equity portfolio worth $830.15 million at the end of March. The filing showed that Intermede Investment Partners went on a major buying spree during the first three months of 2016 by initiating a stake in four stocks and increasing its holdings in 23 companies. Though the fund sold off its entire positions in three stocks during the first quarter, it didn’t reduce its holding in any of the stocks it held at the end of 2015. In this post, we will take a look at Intermede Investment Partners’ top five stock picks going into the second quarter, which in aggregate accounted for 27.55% of the value of its equity portfolio at the end of March.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
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#5 TJX Companies Inc (NYSE:TJX)
– Shares Owned by Intermede Investment Partners (as of March 31): 500,266
– Value of Holding (as of March 31): $39.2 million
Let’s start with TJX Companies Inc (NYSE:TJX), in which Intermede Investment Partners increased its stake by 49% during the first quarter. The apparel and home furnishing behemoth has been one of the best-performing stock in the retail universe for quite some time now, generating returns of over 200% in the past five years inclusive of dividends. This year, the stock reached its lifetime high of $79.20 in April and is currently trading up by 3% year-to-date. The company recently increased its quarterly dividend to $0.26 per share from $0.21, which at its current stock price represents an annual dividend yield of 1.43%. However, some of the analysts who track TJX Companies Inc (NYSE:TJX) feel that the stock is fully valued at current levels and has more downside risk, they advise against shorting it. According to them, the fundamentals of the company are solid and investors should rather think about accumulating the stock if it corrects from the current levels. On March 14, analysts at Cowen and Company reiterated their ‘Outperform’ rating on the stock, while upping their price target to $87 from $85. David Keidan‘s Buckingham Capital Management also increased its stake in the company during the first quarter by 65% to 191,495 shares.
