Here’s New Stock Picks by a Top Fund Manager
Lee Hobson is founder of Highside Capital Management hedge fund, which reported $2.16 Billion total assets in its last 13F filing. Hobson graduated from Princeton University in 1987 with a B.A. degree and received his M.B.A. from Harvard Business School in 1992.
Lee Hobson founded Highside Capital Management in 2003. Prior to forming Highside, Hobson was a Partner of Lee Ainslie’s Maverick Capital from 1994 until 2003. In Maverick, he worked on investments in the consumer sector. He is also specialized in Latin America, which helped him to play an important role in Maverick’s investments in this region. Before joining Maverick Capital, Hobson worked at PepsiCo (NYSE:PEP) Foods International as an associate in the new business development division. Early in his career he worked as an analyst at Goldman Sachs (NYSE:GS) in New York and at Societe Generale in Paris.
According to 13F filings, Lee Hobson’s Highside Capital Management had at least 43 securities in its portfolio as of September 30th 2010. During the third quarter, Hobson bought 13 new stocks.
Here are his five largest new stock picks:
1. Expedia Inc (NASDAQ:EXPE): Lee Hobson had $85 Million in EXPE shares at the end of September. These shares have lost 11.5% since then, underperforming the SPY by 27 percentage points. Roberto Mignone also started buying EXPE during the third quarter.
2. On Semiconductor Corporation (NASDAQ:ONNN): ONNN is one of Lee Hobson’s best performing new stock picks, returning nearly 55%. Hobson has $31 Million invested.
3. Chipotle Mexican Grill Inc (NYSE:CMG): CMG was another good pick from Hobson. CMG outperformed the market by nearly 28 percentage points. Hobson has $29.2 Million invested.
4. J Crew Group Inc (NYSE:JCG): Lee Hobson had $28 Million in JCG stock at the end of September. The stock gained 29.4% since then, beating the SPY by 13.9 percentage points.
5. Yum! Brands Inc (NYSE:YUM): This was a weak performing stock, returning 7% since September. Hobson has $27.6 Million invested. Stephen Mandel also had 15 million shares of YUM valued at nearly $700 Million as of September 30th, 2010.
The value of the 13 new stocks in Hobson’s portfolio was $337 Million at the end of September. The value weighted average performance of his new stock picks during the last 4 months was 11%+, underperforming the market by 4.5 percentage points. These new stocks are still a small proportion of Hobson’s $2.16 Billion 13F portfolio.
Here is how Hobson’s top 10 positions performed during the past four months:
1. SPDR Gold Trust (NYSE:GLD): GLD was Hobson’s biggest investment at the end of September 2010. GLD has gained 2.9% since the end of September, underperforming the SPY’s 15.5% return. Hobson reduced his call option holdings by 30.4% in the third quarter but he still holds $383 Million in these options in his portfolio. There are several other hedge fund managers who also invested in gold.
2. Verisign Inc (NASDAQ:VRSN): Hobson had almost $87 Million of Verisign shares at the end of September. Verisign has gained 11.2% since then. Hobson kept his Verisign holdings the same in the third quarter of 2010.
3. NII Holdings Inc (NASDAQ:NIHD): Hobson had almost $86 Million in NIHD shares at the end of September. He reduced his holding by 4.5% during the third quarter of 2010. NIHD has gained 3.1% since then, underperforming the SPY by 12.4 percentage points.
4. Qualcomm Inc (NASDAQ:QCOM): Hobson’s $86 Million in Qualcomm has gained 21.8% since the end of September. Hobson has increased his stock holdings by 40.7% since the end of June. QCOM is also one of the stocks which insiders are selling like crazy.
5. Expedia Inc (NASDAQ:EXPE): Hobson had $85 Million in EXPE shares at the end of September. These shares lost 11.5% since then, underperforming the SPY by 27 percentage points.
6. NVR Inc (NYSE:NVR): Hobson has returned 16.8% from his NVR investment of $77 Million since the end of September. The stock outperformed the SPY by 1.3 percentage points. Hobson reduced the stock holdings by 4% during the third quarter of 2010.
7. Apple Inc (NASDAQ:AAPL): Hobson increased his Apple stake by 32.5% during the third quarter. This was a timely move. Apple has returned 21.0% since then. Apple is also one of top stocks hedge funds own. Chase Coleman, Stephen Mandel, Barry Rosenstein, and David Einhorn are also among the hedge fund managers with huge Apple investments.
8. Cablevision (NYSE:CVC): The stock had one of the best performances in his porfolio during last four months. CVC has returned almost 35.1% since the end of September, beating the market by a large margin. Hobson has increased stock holdings of CVC 35% since the previous 13F forms were filled at the end of June.
9. Citigroup Inc (NYSE:C): Hobson had $67 Million in C shares at the end of September. This is another stock with 20%+ returns over the past four months. C gained 23.3% in four months, beating the SPY by 7.8 percentage points. C was also one of the 7 stocks insiders were buying like crazy in November.
10. Petsmart Inc (NASDAQ:PETM): PETM has gained 18.5% since September, beating the SPY by 3.0 percentage points. Hobson had nearly $60 Million invested at the end of September.
Six of Hobson’s top 10 positions managed to beat the market. The weighted average return of these stocks was 10.5% since the end of September, underperforming SPY’s 15.5% return. We expected a better performance from Hobson but a 4 month time frame is still too short to judge a hedge fund manager.
This is a guest post written by Insider Monkey.