As we continue to track hedge fund activity, I stumbled upon an interesting fund: Swift Run Capital Management. This financial investment advisory firm headquartered in Charlottesville, Virginia, is managed by Tim Mullen. The fund’s equity portfolio, valued at more than $186 million, is mainly focused on financial stocks, which comprise almost 50% of its total value. The fund also focuses, to a lesser extent, on basic materials (30%) and services (15%) stocks.
Swift Run presented its first Form 13F last February (for Q4 2013). In the filing, the fund declared holding long positions in, at least, 49 publicly traded companies. In its latest Form 13F, the one for the first quarter of the year, it disclosed 70 long stock positions; out of them, 21 represented new positions. In addition, the fund sold out of 18 of its preexisting holdings, and increased its stakes in 24 of them. So, let’s take a look at Mr. Mullen’s top bullish moves for 2014’s first fiscal quarter.
First on our list is Hess Corp. (NYSE:HES), a $28.3 billion market cap Exploration and Production (E&P) company that develops, produces, purchases, transports and sells crude oil and natural gas. During the first quarter, Swift Run upped its stakes by 48% and now owns 275,631 shares – valued at roughly $22 million. This stake accounts for approximately 12% of the total value of its equity portfolio. In addition, other top hedge funds also seem to feel bullish about this company. For instance, Paul Singer’s Elliott Management, the company’s largest hedge fund investor, last reported holding 17.3 million shares –which accounted for roughly 28% of its Q1 equity portfolio. In fact, most of its major hedge fund supporters seem to feel quite bullish about Hess Corp. (NYSE:HES), since the majority of them increased their bets on it.
On the contrary, opinion in relation to Hess Corp. (NYSE:HES) among analysts is quite divided. While many recommend buying this stock, many others recommend holding on it. However, the mean recommendation tends towards a hold. Moreover, the company was recently downgraded by Global Hunter Securities, from a “Accumulate” to a “Neutral” recommendation. Nonetheless, offering returns that comfortably surpass its industry’s average and a valuation way below the industry mean, while boasting a dividend yield of 1.12%, this stock looks quite attractive.
Swift Run’s second largest bet is placed on Colony Financial Inc (NYSE:CLNY), a $2 billion market cap real estate investment and finance company of which the fund owns 666,136 shares. Over the first quarter, Mr. Mullen increased its exposure to Colony Financial Inc (NYSE:CLNY) by 58%; its holdings, valued at roughly $14 million, account for more than 7% of its portfolio’s value. However, the largest hedge fund shareholder at Colony Financial surpasses Mullen by a wide margin: Emanuel J. Friedman’s Ejf Capital owns more than 8.7 million shares of the company, worth more than $191 million. John Brennan’s Sirios Capital Management also seems quite bullish about this stock; his fund owns 3.4 million shares. Both these funds started their positions in Colony Financial Inc (NYSE:CLNY) during the first three months of the year.
Finally, there’s Liberty Media Corp (NASDAQ:LMCA), a $14.6 billion market cap media, communications and entertainment company. Over the first quarter, Swift Run doubled its stakes in this company and now holds 102,121 shares, worth about $13 million. Despite the fact that this holding accounts for nearly 7% of the fund’s equity portfolio, its bets are smaller in comparison with Warren Buffett’s 5.3 million shares ($692 million in stock), or with D E Shaw’s 4.6 million shares, up 51% in relation to Q4 2013.
Disclosure: Javier Hasse holds no position in any stocks mentioned.
