Hedge fund Locust Wood Capital Advisers LLC disclosed an equity portfolio valued at some $792 million as of the end of the first quarter of 2015. The equity portfolio is mainly invested in Finance (29%), Consumer Discretionary (27%) and Health Care (17%) stocks. Two of the three main sectors are the same in which it invests Menta Capital LLC.
Locust Wood’s last 13F filing showed that the fund raised its exposure towards health care and industrials stocks, but reduced its holdings in the financial sector. The fund replaced with other holdings in a given year, the turnover ratio was at 55.56%. The fund had 11 new purchases and additional purchases of 19 stocks. On the other hand, it sold out 14 stocks while reducing holdings in 13 stocks.
In this article we will look into the top three picks held at the end of Q1. Among 10 largest holdings from Locust Wood’s equity portfolio (which amass 46.63% of the total portfolio value), the top three positions are: Valeant Pharmaceuticals International, Inc. (VRX, Financial); Liberty Ventures (LVNTA, Financial) and Liberty Global plc (LBTYK, Financial).
In Valeant Pharmaceuticals International, Inc. (VRX, Financial), Locust Wood holds 297,733 shares, up by 42% on the quarter; the value of the stake amounts to $59.14 million. It is important to mention that the stock gained about 38.8% during the first quarter. It is currently trading at an all-time high and considering a five-year period, the stock has rocketed by more than 1200%. Prominent hedge fund manager Bill Ackman (Trades, Portfolio) said his Pershing Square has 20% of its capital into Valeant. This strong bet is based on the successful acquisition´s strategy the company achieved in the past, with more than 100 in the last seven years. In February, Valeant announced the acquisition of Salix Pharmaceuticals (SLXP, Financial), and the stock price jumped by 22% to $196. Diamond Hill Capital (Trades, Portfolio) upped its stake by 4.66% on the quarter to 179,505 shares held as of the end of the first quarter.
The Englewood, Colorado-based company Liberty Ventures (LVNTA, Financial) represents the second most valuable investment in the fund’s portfolio. After a slightly decrease in the company’s stake during the first quarter, the fund amounted 1.12 million shares valued at $47 million. The stock has surged by 11.36% in the first quarter. But last Friday, it has reported a loss of $8 million in its first quarter or $0.06 on a per share basis. As a matter of fact, shares fell 25% in the last 12 months. Howard Marks (Trades, Portfolio) initiated a position with 308,196 shares and Wallace Weitz (Trades, Portfolio) upped its stake by 4.39% to 875,856 shares.
After a 32% increase on the quarter, Liberty Global plc (LBTYK, Financial) represents the third largest holding with some 807,007 shares valued at $40.2 million at the end of the first quarter of 2015. With a market cap of $42.52 billion, the stock is up by 15.63% during the last 52 weeks, but only gained 0.31% year to date. First Eagle Investment, Chris Davis (Trades, Portfolio) and Wallace Weitz (Trades, Portfolio) have taken long positions in the stock.
Disclosure: As of this writing, Omar Venerio did not hold a position in any of the aforementioned stocks
