This Billionaire’s Fund Returned 30% This Year; Here Are Some of His Top Stock Picks

Michael Hintze is the founder of multi-strategy asset management firm CQS Cayman. In 2016, Hintze’s CQS Directional Opportunities fund posted a stunning 30% return. This figure is all the more commendable considering that only a few multi-strategy funds managed a double-digit return. 2016 saw interesting twists and turns for the hedge fund industry. Donald Trump victory in USA presidential elections, exchange rate and gold price fluctuations and other macroeconomic trends have all contributed towards a very challenging environment for hedge funds.

With this in mind, let’s take a closer look at some top stock picks from CQS Cayman’s latest 13F filing, including Under Armour Inc (NYSE:UA.C), BHP Billiton Limited (ADR) (NYSE:BHP), Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA), Liberty Interactive Corporation – Series A Liberty Ventures (NASDAQ:LVNTA), and Altisource Portfolio Solutions S.A. (NASDAQ:ASPS).

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

CQS Cayman reported a $57 million position in Under Armour Inc (NYSE:UA.C), which contained 1.69 million shares at the end of September, up by 258,505 shares over the quarter. On the other hand,, D.E Shaw & Co. reduced its holding in Under Armour by 63,054 shares to 1.14 million shares worth $38.8 million. For the quarter ending September, the company reported a net profit margin of 8.7% which was an improvement from 5.87% registered a year earlier. Under Armour Inc (NYSE:UA.C) also posted EPS of $0.29, beating analysts’ estimates of $0.25, while revenue of $1.47 billion was above the consensus estimate of $1.45 billion. The hedge funds that we track became less bullish on the stock, with their number falling to 28 from 31 during the third quarter, while the total value of their holdings also declined to $528 million from $573 million quarter over quarter.

During the third quarter, CQS Cayman increased its stake in BHP Billiton Limited (ADR) (NYSE:BHP) by 445% to 513,170 shares worth $17.8 million. Stanley Druckenmiller’s Duquesne Family Office initiated a new position in the stock and held 325,000 shares worth $11 million at the end of September. The stock of the $89 billion company has a dividend yield of 1.69% and the stock returned a whopping 48% over the last year as metal prices increased. At the end of third quarter, 19 funds from our database held shares of BHP Billiton Limited (ADR) (NYSE:BHP) worth $253 million,  versus 17 funds holding $266 million worth of stock at the end of June.

CQS also sold 119,954 shares of Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA) between July and September, and held over 1.01 million shares worth $13.8 million at the end of the quarter. Another investor bullish on Ariad is Jim Simons’ Renaissance Technologies disclosed ownership of more than 1.3 million shares worth over $18 million in its last 13F filing. The stock has cheered investors by returning an outstanding 98% over the last year. Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA) has an ‘Overweight’ rating from most analysts covering the stock. The company reported a loss of $0.14 per share for the last quarter beating analyst estimates of a loss of $0.19 per share. While the number of smart money managers tracked by us long Ariad Pharmaceuticals, Inc.(NASDAQ:ARIA) inched up by two to 29, the value of their investment increased by more than 70% to $563.76 million during the third quarter.

In Liberty Interactive Corporation – Series A Liberty Ventures (NASDAQ:LVNTA), CQS Cayman held 331,556 shares (down by 58,213 shares over the quarter) worth more than $13 million at the end of September. D. E. Shaw & Co also reported owning 4.48 million shares worth $178 million in its last 13F filing. Liberty Interactive Corporation  (NASDAQ:LVNTA) owns interests in the video and digital commerce industries. The Company’s segments include major websites such as the Lending Tree and Zulily. It holds minority interests in a number of large media, telecommunication and online companies besides having a major televised shopping division. The stock price has inched down by 3% over the last three months, but still remains near its 52-week high. According to our database, 77 funds amassed $3 billion worth of Liberty Interactive Corporation’s stock at the end of the third quarter.

In Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), Hintze’s fund increased its stake by 25,000 shares over the quarter to 375,000 shares worth $12 million at the end of September. Another investor fond of Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) is Leon Cooperman’s Omega Advisors, which held 2.2 million shares worth $71.9 million at the end of the third quarter. Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) operates through three segments: mortgage, financial and technology services. The shares have lost more than 5% over the last year. For the September quarter, the company reported revenue of $252.74 million versus the consensus estimate of $235.67 million. For the current quarter, analyst expect revenue of $212.67 million and earnings of  $0.48 per share. At the end of quarter three, a total of 17 of  funds tracked by Insider Monkey were long Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), up by three funds over the quarter.

Disclosure: None