In more than three decades since its founding, Caxton Associates (Trades, Portfolio), a New York City hedge fund, has established a reputation for identifying investment opportunities based on research of world markets and economic trends.
In the third quarter, Caxton showed more of an interest in acquiring stock in companies that are new to its portfolio than reinforcing holdings it already has. In some ways, it could be described as something of an all-or-nothing investment strategy.
Caxton added stock in 89 companies to its portfolio and expanded existing stakes in 23 others in the third quarter. Similarly, it sold all its shares in 68 companies and reduced its holdings in 19 others.
Of the new stocks Caxton purchased, the greatest impact on its portfolio was made by the acquisition of 7,464,200 shares of Petroleo Brasileiro SA Petrobras (PBR, Financial), an energy company based in Rio de Janeiro, for an average price of $16.81. That transaction had a 3.5% impact on Caxton’s portfolio.
Caxton also acquired 2,719,300 shares of The Michaels Companies Inc (MIK, Financial), an arts and crafts chain based in Dallas, for an average price of $16.45 a share. The deal had a 1.6% impact on the fund’s portfolio.
None of Caxton’s other new acquisitions in the third quarter had an impact of 1% or higher on the portfolio. Among the stocks that are new to Caxton’s portfolio are Polaris Industries Inc (PII, Financial), Royal Caribbean Cruises Ltd (RCL, Financial), The Hershey Co (HSY, Financial), Alibaba Group Holding Ltd (BABA, Financial), Union Pacific Corp (UNP, Financial), Buffalo Wild Wings Inc (BWLD, Financial), Chipotle Mexican Grill Inc (CMG, Financial), Time Warner Inc (TWX, Financial), Citigroup Inc (C, Financial), Yahoo! Inc (YHOO, Financial), Starbucks Corp (SBUX) and Lockheed Martin Corp (LMT).
Of the companies in which Caxton expanded its stakes, the purchase of 872,178 shares of Time Warner Cable (TWC), a New York-based telecommunications company, for an average price of $148.67 had the greatest impact on Caxton’s portfolio (4.13%).
Caxton increased its holdings in Best Buy Co Inc (BBY), a Minnesota-based consumer electronics company, by nearly 80%. Caxton purchased 785,000 shares at an average price of $31.4. The transaction had a 0.89% impact on the portfolio.
Caxton raised its stake in DISH Network Corp (DISH), a Colorado-based satellite TV provider, by two-thirds, acquiring 400,000 shares for an average price of $64.59. The acquisition had a 0.84% impact on Caxton’s portfolio.
Among the other companies in which Caxton added to its existing stakes in the third quarter were Charles Schwab Corp (SCHW), TD Ameritrade Holding Corp (AMTD), Bank of America Corporation (BAC), Facebook Inc (FB) and E*Trade Financial Corp (ETFC).
Divestitures and reductions
Caxton divested itself of holdings in five companies whose divestitures each had an impact of 1% or greater on Caxton’s portfolio – Hertz Global Holdings Inc (HTZ), Liberty Global PLC (LBTYA), Live Nation Entertainment Inc (LYV), Aramark (ARMK) and Directv (DTV).
Caxton sold its 1,075,000-share stake in Hertz, a Florida-based car rental and leasing company, for an average price of $28.09. The sale had a -1.6% impact on Caxton’s portfolio.
Caxton held 700,000 shares in Liberty Global, a London-based telecommunications and television company, which it sold for an average price of $43.2. That transaction also had a -1.6% impact on Caxton’s portfolio.
Heading into the third quarter, the fund held 1 million shares of Live Nation Entertainment, a California-based entertainment company, which it sold for an average price of $23.11. The deal had a -1.3% impact on the portfolio.
Caxton sold its 800,000 shares in Aramark, a Philadelphia-based food service, facilities and clothing provider, for an average price of $26.75. The transaction had a -1.1% impact on Caxton’s portfolio.
Caxton’s divestiture of Directv, a California-based satellite TV provider, meant selling 243,500 shares for an average price of $86.01. That transaction also had a -1.1% impact on Caxton’s portfolio.
Some of the other companies from which Caxton divested itself were Ulta Salon Cosmetics & Fragrances Inc (ULTA), Michael Kors Holdings Ltd (KORS), Jack In The Box Inc (JACK), Yum! Brands Inc (YUM), Walgreen Co (WAG), Sirius XM Holdings Inc (SIRI), MGM Resorts International (MGM), Home Depot Inc (HD) and Anheuser-Busch Inbev SA (BUD).
Caxton reduced its stake in Hilton Worldwide Holdings Inc (HLT), a Virginia-based hospitality company, by about 9%, selling 4,842,597 shares for an average price of $24.77. That transaction had a 5.86% impact on Caxton’s portfolio. No other reduction in holdings had an impact of 1% or greater on Caxton’s portfolio.
Among the other companies in which Caxton reduced its holdings were MGIC Investment Corp (MTG), Gaming and Leisure Properties, Inc. (GLPI), Howard Hughes Corp (HHC), Walt Disney Co (DIS), McDonald's Corp (MCD), Google Inc (GOOGL) and Tyson Foods Inc (TSN).
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