Home Depot Inc (NYSE:HD) was enjoying a strong year until late April when it gave up a good chunk of its yearly gains to close the month. Still, shares have appreciated by 3% this year and several analysts believe the stock’s run isn’t necessarily over just yet, despite a nearly 50% gain between August of last year and March of this year. In particular, the flooring controversy that has embroiled its rivals in that space: Lowe’s Companies, Inc. (NYSE:LOW) and Lumber Liquidators Holdings Inc (NYSE:LL), can only benefit Home Depot Inc (NYSE:HD), already the U.S market leader in that segment, further. Home Depot is also a stock that insiders are bullish on (along with billionaire Ken Fisher), a metric which has proven in the past to be correlated to better stock performance. Gabalex’s position consists of 300,000 shares which held a value of $34.08 million, with exposure of 12%. Fisher’s position stands at 8.30 million shares through the end of the first quarter.
Microsoft Corporation (NASDAQ:MSFT) may not be as flush with cash as Apple Inc. (NASDAQ:AAPL), one of the most profitable businesses ever, but it does have nearly $100 billion in cash and equivalents to play with, raising a nearly limitless number of possibilities for what it could buy with that money, be it a company or even a country. Gabalex holds 800,000 shares of Microsoft, up from 700,000 at the end of 2014, with them being valued at $32.52 million. It’s been a tale of two earnings reports for Microsoft Corporation (NASDAQ:MSFT) in 2015, with shares slumping nearly 15% in late January following its Q2 2015 earnings results, and gaining more than 10% following its Q3 2015 earnings report in late April. The latter report featured revenue of $21.73 billion that blew past estimates by $670 million and which were up by 6.5% year-over-year. Among its segments, Microsoft Corporation (NASDAQ:MSFT)’s commercial cloud revenue doubled to $6.3 billion, and the Seattle company is poised to be an Internet of Things leader through Azure. All of which is great news for Gabalex and Jeffrey Ubben’s ValueAct Capital, the latter of which has 21.6% exposure to Microsoft through a 74.24 million share position.
Gabalex Capital is just one of more than 700 hedge funds that we have in our database here at Insider Monkey, whose equity portfolios just like this one we collate quarterly as part of our small-cap strategy. Even though most investors believe that tracking 13F filings is a fruitless endeavor because they are filed with a delay of a maximum of 45 days after the end of a calendar quarter, the results of our research prove that is not the case. To be on the safe side, we used a delay of 60 days in our backtests that involved the 13F filings of funds between 1999 and 2012 and we still managed to gain an annual alpha in the double digits. Moreover, since the official launch of our strategy in August 2012, our small-cap strategy has obtained returns of 135%, beating the S&P 500 Total Return Index by 79 percentage points through the end of April (see the details).
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