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Chieftain Capital Management is an investment advisor that was formed in January 2010 when the original Chieftain Capital was split into two separate firms. The firm was originally founded in 1984 by John Shapiro and Glenn Greenberg. In late 2009, the firm split in two, due to personality conflicts, dividing into Chieftain Capital Management and Brave Warrior Advisors. Mr. Shapiro and partners Tom Stern and Joshua Slocum formed the new Chieftain Capital Management, leaving Greenberg who now heads up Brave Warrior Advisors. Chieftain Capital focuses on value investing for institutions and individuals.

John Shapiro has a very concentrated portfolio, which we like a lot. During the first quarter, Shapiro sold his entire stake in XTXI. Unfortunately, the stock kept going up, returning 14.6% since the end of March. Here are Shapiro’s favorite stocks and the activities in each stock during the first quarter:

CompanyName

Ticker

Value

Activity

Return

CROSSTEX ENERGY INC

(XTXI)

Sold Out

14.6%

CROSSTEX ENERGY LP

(XTEX)

2057

-79%

10.0%

RYANAIR HOLDINGS PLC

(NASDAQ:RYAAY)

79121

-17%

5.8%

U S BANCORP DEL

(NYSE:USB)

135597

-16%

-3.1%

LABORATORY CORP AMERICA HLDGS

(NYSE:LH)

147341

-10%

9.4%

TIME WARNER CABLE INC

(NYSE:TWC)

252765

-6%

8.9%

LOCKHEED MARTIN CORP

(NYSE:LMT)

232252

5%

-2.2%

ABBOTT LABORATORIES

(NYSE:ABT)

115908

5%

7.5%

AON CORP

(NYSE:AON)

149704

22%

-1.5%

CROWN HOLDINGS INC

(NYSE:CCK)

173508

38%

5.3%

TEMPUR PEDIC INTERNATIONAL INC

(NYSE:TPX)

223404

137%

28.4%

The weighted average return of Shapiro’s portfolio is 7.3% since the end of March, vs. 1.7% gain for the S&P 500 index. Shapiro increased his TPX holdings by 137% during the first quarter. That was a very shrewd move. TPX gained 28% since the end of March. Patrick Degorce’s Theleme Partners, Duke Buchan’s Hunter Global Investors, and Alexander Mitchell’s Scopus Asset Management are also among the hedge funds with large TPX holdings.

Shapiro’s largest holding was Time Warner Cable (TWC) which returned 8.9% since the end of March. Andreas Halvorsen’s Viking Global and Sandy Nairn’s Edinburgh Partners had large positions in TWC as well. Shapiro reduced his bets in XTEX and RYAAY significantly. Both of these stocks managed to beat the market during the past 2 months.

We like Shapiro’s concentrated portfolio and value investing approach. We believe investors can benefit significantly be following Chieftain’s stock picks and imitating its portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Chieftain Capital's Favorite Stock Picks