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Reid Walker and Gordon Stacy Smith founded Dallas-based WS Capital in 1997. Occasionally the duo takes large stakes in small companies. WS Capital did not make a lot of changes in the top 30 holdings of its portfolio during the first quarter of 2011. WS added Sprint Nextel (S), Pioneer Natural Resources (PXD) and Warner Chillcott PLC (WCRX). Sprint Nextel is also favored by Greenlight’s David Einhorn. Walker sold out his Anadarko Petroleum Corp (APC) calls and stocks which he reported as his second largest holding in the previous 13F. He also sold Gamestop (GME) Calls which returned 17.7% since March. His largest activity was on Maratahon Oil Corp (MRO) where he increased his shares by 25.5%. Weighted average of his top 30 holdings lost 7.0% and underperformed the SPY by 3.1% since the end of March.

CompanyName

Ticker

Value

Activity

Return (since 3/31)

MARATHON OIL CORP

(MRO)

141272

25.5

-3.6%

CROWN HOLDINGS INC

(CCK)

50347

-0.1

0.9%

CINEMARK HOLDINGS INC

(CNK)

50020

0.0

0.7%

TENET HEALTHCARE CORP

(THC)

45631

1.0

-17.9%

ISHARES TRUST

(IWM)

42085

0.3

-5.8%

HERTZ GLOBAL HOLDINGS INC

(HTZ)

37668

0.2

-6.7%

EXIDE TECHNOLOGIES

(XIDE)

31555

0.7

-34.1%

N C R CORP NEW

(NCR)

29202

-0.2

-3.1%

GREIF INC

(GEF)

29134

-0.2

1.8%

BRINKS CO

(BCO)

28640

0.0

-15.5%

CAREFUSION CORP

(CFN)

27354

0.2

-0.3%

SPRINT NEXTEL CORP

(S)

26680

New

16.6%

FRONTIER OIL CORP

(FTO)

22283

0.4

-4.3%

NORTHERN DYNASTY MINERALS LTD

(NAK)

21056

-0.1

-33.8%

MEDCATH CORPORATION

(MDTH)

20925

-0.1

-7.5%

PIONEER NATURAL RESOURCES CO

(PXD)

20384

New

-13.3%

STRAYER EDUCATION INC

(STRA)

20357

0.5

1.4%

HOLLY CORP

(HOC)

18836

-0.3

-4.0%

CAPITAL SENIOR LIVING CORP

(CSU)

18427

-0.1

-14.1%

MOLSON COORS BREWING CO

(TAP)

18287

0.3

-3.9%

WARNER CHILCOTT PLC IRELAND

(WCRX)

16282

New

-3.4%

SEASPAN CORP

(SSW)

15560

-0.5

-23.2%

BALLY TECHNOLOGIES INC

(BYI)

15329

0.2

-4.2%

T H Q INC

(THQI)

15116

0.6

-21.1%

H F F INC

(HF)

15040

-0.4

-4.1%

A C C O BRANDS CORP

(ABD)

14739

0.0

-23.5%

LIBERTY MEDIA CORP NEW

(LSTZA)

13968

0.2

-0.5%

COTT CORP QUEBEC

(COT)

11634

-0.1

-5.8%

GRAFTECH INTERNATIONAL LTD

(GTI)

11573

-0.5

-6.0%

Walker reported Marathon Oil (MRO) as his largest new position, upping his stake by 25.5%. The stock lost 3.1% since March, but still outperformed the SPY by 0.8%. MRO has a market cap of $35.7 billion and a P/E ratio of 11.53. The stock recently traded at $50.25 and has a dividend yield of 1.99%. Jeffrey Altman’s Owl Creek Asset Management initiated a new position purchasing 4+ million shares. Eric Mindich’s Eton Park also started a new position in MRO and now owns 3.3 million shares. Michael Karsch’s Karsch Capital Management and Doug Silverman’s Senator Investment Group are the other hedge funds which initiated new positions in MRO.

WS Capital’s Second largest holding is Crown Holdings Inc (CCK) with 1.3+ million shares. The stock has returned 0.9% since the end of March. CCK has a market cap of $5.9 billion and a P/E ratio of 20.47. The stock recently traded at $37.82 and does not pay dividends. Two insiders of the stock sold 18,500 shares in the last 3 months. John Shapiro’s Chieftain Capital is the largest hedge fund owner of the stock, having approximately 4.5 million shares. Shapiro increased his stake by 38% during the first quarter. John Osterweis’ hedge fund, Osterweis Capital Management is the second largest hedge fund owner of the stock. French born Jean-Marie Evellard’s First Eagle Investment Management and Cliff Asness’ AQR Capital Management are the other large hedge fund owners of CCK.

Walker is also bullish on Cinemark Holdings (CNK) which owns and manages movie theatres. Cinemark has gained 0.7% and outperformed SPY since March. Latest 13F filing shows that Walker is still the largest hedge fund owner of the stock. Cinemark recently traded at $19.0 and has a P/E ratio of 15.87. CNK has a market cap of 2.17 billion and has a dividend yield of 4.42%. William Harnisch’s Peconic Partners and Mark Broach’s Manatuck Hill partners are the second and third largest hedge fund owners of CNK. Phill Gross and Robert Atchinson’s Adage Capital Management owns 1.2 million shares. Duke Buchan’s Hunter Global Investors initiated a new position in the stock with 1 million shares.

Walker also doubled his Tellnet Healthcare Corp (THC) stake during the first quarter. THC lost 17.9% and underperformed SPY by more than 14%. The stock recently traded at $5.91 and has P/E ratio of 2.95. THC’s market cap is $2.89 billion. Hedge funds started large positions in THC during the first quarter. The largest position was initiated by Frank Brosens’ Taconic Capital with 9.2+ million shares. Kenneth Mario Garschina’s Mason Capital Management and Richard Perry of Perry Capital started positions in THC during the first quarter of 2011. Jamie Zimmerman’s Litespeed Management holds THC as their largest holding with 5.9 million shares.

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

Source: WS Capital's Favorite Stock Picks