Douglas C. Lane & Associates, Inc. is a registered investment advisory firm based in New York City. It manages approximately $4 billion of capital of high net worth families, trusts, pensions, endowments, foundations and institutions.
It disclosed an equity portfolio valued at some $3.8 billion as of the end of the first quarter of 2015. The equity portfolio is mainly invested in Industrials (22.7%), Technology (20.5%) and Consumer Discretionary (17.6%) stocks. Douglas C. Lane’s last 13F filing showed that the fund raised its exposure towards consumer discretionary and energy stocks, but reduced his holdings in the consumer staples sector.
In this article we will look into the top three picks held at the end of the first quarter of 2015. These companies are Delta Air Lines, Inc. (DAL, Financial), United Continental Holdings, Inc. (UAL, Financial) and Illumina Inc. (ILMN, Financial).
Among the ten largest holdings from Douglas C. Lane’s equity portfolio (which amass 20.85% of the total portfolio value), we explore the top three in the next list:
Delta Air Lines (DAL, Financial) represents the first most valuable investment in Douglas C. Lane´s portfolio, which holds 2.51 million shares, down by 3% on the quarter; the value of the stake amounts to a market value of $112.74 million. We must highlight that the stock lost about 8.6% during the first quarter of 2015.
The firm provides scheduled air transportation for passengers and cargo worldwide. It operates in two segments, Airline and Refinery. After reaching a peak in 2008, the crude oil is trading nearly above $54. This, plus more competition and a softer economic recovery, could hurt the company´s profit. However, we believe on an improving global economy, so Delta Airlines should benefit from a higher passenger demand.
For the previous quarter, the fourth quarter of 2014, Delta Air Lines posted revenues of $9.65 billion compared to $9.07 billion for the fourth quarter of 2013. Along with this, earnings per share (EPS) have significantly decreased in the fourth quarter of 2014 to -$0.86 from $9.89 a year earlier. It is scheduled to announce its first quarter earnings tomorrow.
Delta Air Lines is one of the favorite airline stocks among hedge funds as 795 filers held the stock at the end of the year. The largest shareholder of the company was Lansdowne Partners, with 23.11 million shares valued at $1.14 billion, as of the end of 2014.
In second place we found United Continental Holdings, Inc. (UAL, Financial). The fund held about 1.63 million shares valued at $109.54 million at the end of the first quarter of 2015. With a market cap of $23.44 million, United Continental is up only by 0.54% during the quarter. The company provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. In an industry with low barriers to entry, new entrants have lower costs than United and this is a major risk for the firm. David Tepper (Trades, Portfolio) held a stake of 4.92 million shares of the company valued at $328.04 million at the end of the year.
Next in line is Illumina Inc. (ILMN, Financial). The fund held about 426,125 shares valued at $79.1 million at the end of the first quarter of 2015. With a market cap of $27.13 billion, the company is up by only 0.57% during the quarter. Andreas Halvorsen (Trades, Portfolio) held 8.29 million shares valued at $1.53 billion, while Stanley Druckenmiller (Trades, Portfolio) held a stake of 410,100 shares of the firm valued at $75.70 million, at the end of last year.
Disclosure: Omar Venerio holds no position in any stocks or funds mentioned
