Signpost Capital Advisors was launched as recently as 2012 by Siddharth Thacker and Brandon Weber, previously of Citadel Investment Group. The fund tends to carry fairly low net exposure, and recently filed its Q1 13F with the SEC, describing some of its main investments for the first three months of 2013. A quick look at the top 5 equity positions of this hedge fund might be a good starting point for your own research, as retail investors can benefit from watching hedge fund sentiment; discover the details of this strategy.
Old world
According to the 13F, the fund’s largest holding is in Chicago Bridge & Iron Company N.V. (NYSE:CBI), the construction and engineering company, with 331,608 shares held worth about $20.6 million. This position seems to have been initiated during this quarter, as no holding is stated in the 13F of the prior quarter. Price action has been bullish over the past month or so, with the current price being about $57, rising from a low of just over $50 in mid-April.
Revenue for the engineering and construction service provider was up 87% (yoy) in its latest financials, and the future is bright. Chicago Bridge & Iron Company N.V. (NYSE:CBI) is expected to have a major role in the LNG export terminal construction business, as well as services related to natural gas processing facilities.
The next largest holding described in the Signpost 13F is food company Post Holdings Inc (NYSE:POST), with a stake of 438,915 shares of common stock, worth approximately $18.843 million. The stake was considerably smaller in the prior 13F, with 291,410 shares held. Shares of the cereal-centric holding company are up 30% year-to-date, and a recent acquisition of the organic and natural cereal business of Hearthside Food Solutions might be one reason why Signpost is bullish. Organic is one of the higher-growth areas in cereal at the moment, and Post Holdings Inc (NYSE:POST) still trades at a book multiple below parity.
Next we have the petrochemical company Valero Energy Corporation (NYSE:VLO). Signpost currently has a 394,642-share stake in Valero Energy Corporation (NYSE:VLO), worth about $17.952 million at the time of the 13F filing. This is a slight reduction from the end of 2012, and shares are down more than 10% since the beginning of March, but Valero Energy Corporation (NYSE:VLO)’s long-term potential in the gasoline export marketplace—it presently has the highest oil refining capacity in the U.S., 25% more than Exxon Mobil Corporation (NYSE:XOM) and 65% more than Marathon Petroleum Corp (NYSE:MPC).
New World Companies
The NASDAQ-listed online travel provider Priceline.com Inc (NASDAQ:PCLN) is the next largest holding described in the 13F, with 25,923 shares held, worth $17.839 million at the time of filing. This is an increase in stake from the prior quarter, when 22,779 shares were held. Priceline.com Inc (NASDAQ:PCLN) has had impressive price action during 2013, currently trading near its 52-week high at $788.79, and a forward earnings multiple near 21 times year-ahead EPS indicates there’s not much of an overvaluation here.
Priceline’s high-growth potential in the future hinges its aggressive global expansion, where markets such as Europe and China are severely under-penetrated in comparison to the U.S. It appears that Signpost is a big believer in Priceline’s ability to use its sheer size to corner these markets.
Rounding out the top five is online search giant Google Inc (NASDAQ:GOOG), with the 13F stating the fund held 22,276 Class A shares during the quarter, worth approximately $17.691 million at the time of filing. This is a slight increase from the previous quarter. Assuming attitudes in the tech market remain relatively bullish, Google Inc (NASDAQ:GOOG)’s journey toward the much-hyped $1,000 share price-mark seems to rest on two things: (1) currently unfolding product launches, and (2) the stimulation of shareholder value.
Regarding the latter, the most logical choice Google can use to stimulate shareholder value is by way of a dividend, and with nearly $50 billion in cash and cash equivalents, this isn’t out of the question. Google’s also in the midst of releasing its much-anticipated Spotify-like streaming music service, and rumors of an internally produced “X Phone” haven’t died yet. We’ll continue to watch both of these potentially profit-boosting products moving forward.
Conclusion
Signpost is tackling markets that are at an all-time high in a unique way, by investing heavily in both old world and new world companies. The five holdings of this new hedge fund player are an intriguing mix of old and new world companies. Chicago Bridge and Iron and Valero Energy Corporation (NYSE:VLO) are two solid plays on natural gas and oil moving forward, while Post Holdings, Priceline and Google each have their own growth drivers as well, all of which are very attractive. Continue preparing for 13F-filing season here.
Disclosure: none
