Anand Parekh’s Alyeska Investment Group is known for its diversified investments across different industries. This was confirmed by the fund’s latest 13 filing with the U.S. Securities and Exchange Commission for the reporting period of March 31. The filing showed that the firm has strong interests in healthcare, technology, finance, and services stocks, among several other market segments. At the end of the first quarter, Alyeska Investment Group had a public equity portfolio valued at $6.83 billion, representing a $1.23 billion increase compared to the previous reporting period three months earlier. Parekh founded the fund in 2008 and has been applying a market neutral strategy that incorporates both short and long-term positions ever since. The firm’s growth is quite evident, having risen from the $2.5-$3.0 billion that it managed in 2011 to its current portfolio size. Insider Monkey has had keen interest in this hedge fund, owing to its investment strategy, value, and performance and has thus been monitoring it among the 729 other actively filing hedge funds we currently follow. In this article we’ll focus mainly on the fund’s top small-cap stocks, Vista Outdoor Inc (NYSE:VSTO), Hill-Rom Holdings, Inc. (NYSE:HRC), and West Corp (NASDAQ:WSTC).
Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 84 percentage points, returning over 144% (read the details here). Hence a retail investor needs to isolate himself from the herd and take advantage of the best growth opportunities in the market by concentrating on small-cap stocks.
Follow Anand Parekh's Alyeska Investment Group
The fund’s 13F filing showed that it held a total of 1.41 million shares of Vista Outdoor Inc (NYSE:VSTO) with a market value of $60.38 million, which was also one of its new purchases. The company designs, manufactures, and markets consumer products for the outdoor and recreation sectors. Vista Outdoor Inc (NYSE:VSTO) is on a robust move to expand its portfolio and will be locating its corporate headquarters in Farmington, Utah. The company said that the move will see it create jobs in Utah, being an epicenter for outdoor recreation and business activities. The stock is doing great from analysts’ perspective, having been given a “Buy” recommendation by analysts at Wunderlich. Vista Outdoor Inc (NYSE:VSTO) came short of Thomson Reuters’ consensus estimate, posting $0.47 in earnings, while estimates had it pegged at $0.58. For the current financial year, the stock is expected to post earnings per share of $2.15. 20 hedge funds were invested in the stock, which had its IPO during the first quarter. Those funds had an aggregate investment of $655.32 million and included David Cohen and Harold Levy’s Iridian Asset Management, which held 2.79 million shares.
Alyeska Investment Group held a total of 988,218 shares of Hill-Rom Holdings, Inc. (NYSE:HRC) with a market value of $48.42 million. Investors will be keenly watching the activities of the stock after it reported earnings per share of $0.64 in the previous quarter, which represented a surprise factor of 6.67%. Wall Street analysts are however expecting earnings per share on the stock to drop to $0.61 for the current quarter while its average price target estimate for the current fiscal year has been set to $53.50. On a long-term basis, the stock is expected to grow within the next three years to an estimated $12.61 in annual earnings per share. Hill-Rom Holdings, Inc. (NYSE:HRC) is a provider and manufacturer of healthcare equipment and services. With the sector doing quite well, it’s expected that it will also benefit and realize strong growth. Some of the subsidiaries it has acquired included Germany-based Volker Group, and Aspen Surgical Products. Other hedge funds that had investments in Hill-Rom are Jasper Ridge Partners, which reduced its position in the stock to 523,226 shares worth $23.87 million, and Efrem Kamen‘s Pura Vida Investments, which raised its stake to 60,000 shares valued at $2.94 million.
The final stock we are going to look at is West Corp (NASDAQ:WSTC), in which the fund held a total of 1.12 million shares with a value of $37.64 million. The stock was another one of the fund’s new purchases for the quarter. With the goal of providing its customers with improved services, West Corp (NASDAQ:WSTC) recently announced the finalization of its estimated $19 million acquisition of Intrafinity, Inc., a website and Content Management System company, doing business as SharpSchool. The objective of the acquisition is to integrate its services into West Corp’s SchoolMessenger. West Corp posted earnings per share of $0.78, beating analysts’ consensus estimate of $0.74, which also meant year-over-year improvement of $0.08. The same quarter also saw the company post a 5.7% increase in revenue compared to the same quarter last year. On average, the stock currently boasts a “Buy” rating based on consensus estimates submitted by 11 analysts, while it currently has a 12-month price target of $34.57 based on brokerages that have commented on the stock over the past year, suggesting upside of 12%. Out of the 730 hedge funds that we are monitoring, 26 of them were among the company’s shareholders, including David Rodriguez-Fraile’s BlueMar Capital Management, Roger Ibbotson‘s Zebra Capital Management, and Robert B. Gillam‘s McKinley Capital Management.
Disclosure: None
