Was Magnolia Capital Fund Right to Bet on Rush Enterprises, Inc. (RUSHA), Alliance Resource Partners, L.P. (ARLP) & Two Other Stocks?

Adam Peterson‘s Magnolia Capital Fund raised its equity portfolio to $170.61 million at the end of September, from $154.68 million at the end of June. The fund’s five holdings in companies that were worth at least $1 billion delivered a weighted average return of 14.43% in the third quarter, based on the size of those positions at the end of June. During the third quarter, the fund also made a number of changes to its holdings and in this article we’ll take a closer look at changes of the fund’s exposure to Rush Enterprises, Inc. (NASDAQ:RUSHA), Alliance Resource Partners, L.P. (NASDAQ:ARLP), Wells Fargo & Co (NYSE:WFC), and Alliance Holdings GP, L.P. (NASDAQ:AHGP).

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In Rush Enterprises, Inc. (NASDAQ:RUSHA), Magnolia Capital cut its stake by 38% to 933,307 shares worth $22.85 million during the third quarter, as the stock advanced by 13.6% in the same period. Overall, heading into the third quarter of 2016, 10 funds tracked by Insider Monkey held long positions in this stock, down by 17% over the quarter. The largest stake in Rush Enterprises, Inc. (NASDAQ:RUSHA) was held by Ancient Art (Teton Capital), which reported holding $39.2 million worth of stock as of the end of June. Other investors bullish on the company included First Pacific Advisors LLC, Prescott Group Capital Management, and Arrowstreet Capital.

Another company in which Magnolia reduced its stake is Alliance Resource Partners, L.P. (NASDAQ:ARLP), whose stock gained 44.1% during the third quarter. Meanwhile, the fund unloaded 376,968 shares during the same period and reported a $31.82 million stake containing 1.43 million shares as of the end of September. Seven funds from our database held shares of Alliance Resource Partners, L.P. (NASDAQ:ARLP) at the end of June, including Bernard Selz’ Selz Capital, which held a $4 million position. Some other hedge funds and institutional investors with similar optimism contained Mitch Cantor’s Mountain Lake Investment Management, Jim Simons’s Renaissance Technologies and Robert Bishop’s Impala Asset Management.