Friday, September 27, 2013

13D Activist Fund is Up 57% Since the Beginning of 2012; Will This Performance Be Sustainable? ($DDDAX)

The 13D Activist Fund ($DDDAX), which is run by Ken Squire, the "founder and principal of 13D Monitor/Activist Database.com" (via Morningstar), owns what large activist hedge funds own in their portfolios. For example, his top ten holdings (39% of total assets) are concentrated in stocks majority owned by Pershing Square, Carl Icahn, ValueAct, Biglari Holdings, Blue Harbour Group, and Horizon Kinetics.
Hedge fund managers are required to file 13Ds with the SEC after they acquire a 5%+ stake in a company's stock within 10 days. Below is a list of the fund's top ten holdings (and the hedge fund managers that own them) as of June 30 and DDDAX's chart since inception. The stocks have all made a killing this year. But will this fund's performance seriously be sustainable in the next bear market? If I recall, activist hedge funds like Pershing Square and Icahn didn't do so hot in the previous bear market. Also, these funds have short positions, own debt and own derivatives which don't have to be reported in SEC filings. It definitely looks like an interesting experiment though.

Source: StockCharts.com

VALEANT PHARMACEUTICALS INTL IN VRX.TO (owned by ValueAct)
Howard Hughes Corporation (The) HHC (owned by Pershing Square, Horizon Kinetics)
CANADIAN PACIFIC RAILWAY LIMITE CP.TO (owned by Pershing Square)
Cracker Barrel Old Country Stor CBRL (owned by Biglari Holdings)
CACI International, Inc. Class CACI (owned by Blue Harbour Group)
Motorola Solutions, Inc. Common MSI (owned by ValueAct, Icahn was involved)
Beam Inc. Common Stock BEAM (owned by Pershing Square)
Adobe Systems Incorporated ADBE (owned by ValueAct)
The Hain Celestial Group, Inc. HAIN (owned by Icahn)
WebMD Health Corp WBMD (owned by Icahn)

Source: http://finance.yahoo.com/q/hl?s=DDDIX+Holdings

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