Schneider Sticks to Investment Strategy in Third Quarter

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Dec 09, 2014
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Arnold Schneider (Trades, Portfolio), president, chief investment officer and principal of Schneider Capital Management Corp., likes to use independent analysis to identify undervalued securities with potential for positive change. It is a strategy that produced a 35.35% return in 2012 and a 32.1% return in 2013.

In the third quarter of 2014, Schneider seldom bought or sold stock that was priced higher than $40 a share.

Schneider added 11 companies to his portfolio – A M Castle & Co (CAS, Financial), Advanced Energy Industries Inc (AEIS, Financial), UTStarcom Holdings Corp (TSI, Financial), Stolt-Nielsen Ltd (SOIEF, Financial), Baltic Trading Ltd (BALT, Financial), Old National Bancorp (ONB, Financial), Scorpio Bulkers Inc (SALT, Financial), Scorpio Tankers Inc (STNG, Financial), TTM Technologies Inc (TTMI, Financial), Market Vectors Etf Trust (GDX, Financial) and Harris & Harris Group, Inc (TINY).

Schneider’s purchase of 283,513 shares of A M Castle, a provider of high-performance metals and supply chain solutions, for an average price of $9.89 per share had an 0.89% impact on Schneider’s portfolio.

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None of the other new additions to his portfolio had an impact of greater than 0.12%.

He expanded his existing holdings in another 10 companies – Northstar Realty Finance Corp (NRF), Peabody Energy Corp (BTU), Hartford Financial Services Group Inc (HIG), Carnival Corp (CCL), Sunstone Hotel Investors Inc (SHO), Rexford Industrial Realty Inc (REXR), Ardmore Shipping Corp (ASC), First American Financial Corp (FAF), Marriott International Inc (MAR) and iShares Russell 2000 Value Index (ETF).

Schneider increased his stake in Northstar Realty Finance, a New York-based real estate company, by purchasing 404,450 shares for an average price of $17.53 per share. The purchase had a 0.83% impact on his portfolio.

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Schneider purchased 483,992 shares of Peabody Energy, a St. Louis-based coal company, for an average price of $15.18 per share. The transaction had a 0.73% impact on his portfolio.

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Schneider bought 142,145 shares of Hartford Financial Services, an investment and insurance company with headquarters in Connecticut, for an average price of $36.19 per share. The buy had a 0.65% impact on his portfolio.

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His purchase of 104,000 shares of Carnival Corp, the world’s largest cruise ship operator with headquarters in Miami and the United Kingdom, for an average price of $37.88 per share had a 0.51% impact on his portfolio.

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The remaining transactions in which Schneider added to his holdings had impacts of 0.4% or less on his portfolio.

Divestitures and reductions

Schneider sold all his holdings in 15 companies – Strategic Hotels & Resorts Inc (BEE), Cloud Peak Energy Inc (CLD), Brookdale Senior Living Inc (BKD), RG Barry Corp (DFZ), WPX Energy Inc (WPX), KeyCorp (KEY), Insight Enterprises Inc (NSIT), United Bancorp MI (UBMI), Seventy Seven Energy Inc (SSE), Terreno Realty Corp (TRNO), Equity Lifestyle Properties Inc (ELS), Magna International Inc (MGA), First BanCorp (FBP), Shore Bancshares Inc (SHBI) and CAE Inc (CAE).

He sold 657,284 shares of Strategic Hotels & Resorts, Chicago-based owner and asset manager of luxury hotels and resorts, for an average price of $11.78. The deal had a -0.83% impact on his portfolio.

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Schneider sold 250,147 shares in Cloud Peak Energy, a Wyoming-based coal company, for an average price of $15.14. The transaction had a -0.5% impact on his portfolio.

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None of Schneider’s other divestitures had an impact of greater than -0.3% on his portfolio.

He reduced his holdings in 26 other companies – MarineMax Inc (HZO), Arch Coal Inc (ACI), Bank of America Corporation (BAC), Consol Energy Inc (CNX), American International Group Inc (AIG), SunTrust Banks Inc (STI), Toll Brothers Inc (TOL), Navistar International Corp (NAV), Meritage Homes Corp (MTH), Office Depot Inc (ODP), Flagstar Bancorp, Inc (FBC), NorthStar Asset Management Group Inc (NSAM), Lennar Corp (LEN), First Horizon National Corp (FHN), Weatherford International PLC (WFT), Swift Energy Co (SFY), Comverse Inc (CNSI), Avid Technology Inc (AVID), Allstate Corp (ALL), Alcoa Inc (AA), MainSource Financial Group Inc (MSFG), International Rectifier (IRF), Boeing Co (BA), Alumina Ltd (AWCMY), Bank of Commerce Holdings Inc (BOCH) and Sussex Bancorp (SBX).

He sold 460,173 shares of MarineMax, a Clearwater, Florida-based recreational boat dealer, for an average price of $17.39 per share. The sale had a -0.84% impact on his portfolio.

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The other reductions in holdings had an impact of -0.42% or less.

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