Manatuck Hill Partners is a corporate spin-off of the troubled Pequot Capital Management founded in 2009 by the team that managed the small-cap Pequot Scout Fund. The 10-person team, which is headed by Mark Broach, has produced solid returns since its inception and has outperformed the S&P 500 significantly since the end of the first quarter. While the Manatuck Hill Partners hedge fund has generated a negative return of just over -7%, the S&P 500 produced a 14.89% loss for the same period. This stellar performance has earned Manatuck Hill a spot on our top hedge funds of 2011.
Manatuck Hill bases its investment strategy on buying undervalued stocks and holding them until the market shifts. As such, Manatuck Hill’s hedge fund portfolio is filled with major losses offset by significant gains.
CompanyName | Ticker | Value (x1000) | Return |
CHIPOTLE MEXICAN GRILL INC | 156160 | 10.1% | |
CROCS INC | 44727 | 51.2% | |
VICOR CORPORATION | 33400 | -31.3% | |
REALD INC | 30666 | -56.5% | |
CINEMARK HOLDINGS INC | 30426 | 0.2% | |
TITAN MACHINERY INC | 20897 | -17.5% | |
G P STRATEGIES CORP | 19788 | -14.4% | |
ALCATEL LUCENT | 18458 | -45.4% | |
LULULEMON ATHLETICA INC | 18237 | 13.3% | |
SODASTREAM INTERNATIONAL LTD | 18120 | 57.1% | |
SILICON GRAPHICS INTL CORP | 17120 | -46.1% | |
SONUS NETWORKS INC | 16070 | -40.4% | |
NATIONAL CINEMEDIA INC | 15207 | -29.3% | |
IMAX CORP | 14915 | -50.3% | |
VONAGE HOLDINGS CORP | 14820 | -32.9% | |
S T E C INC | 14551 | -52.8% | |
DEXCOM INC | 14170 | -33.6% | |
VERIFONE SYSTEMS INC | 13540 | -36.8% | |
TEMPUR PEDIC INTERNATIONAL INC | 13121 | 11.8% | |
ACACIA RESEARCH CORP | 12881 | -1.0% |
Manatuck Hill’s top two positions had significant gains since the end of the first quarter. Sodastream gained 57.1% while the shoe company Crocs produced a healthy 51.2%. Sodastream has been in the sights for several major hedge funds, including John Murphy’s Alydar, and Crocs is a recent favorite of Jim Cramer. Other positive returns include a decent 13.3% return via its position in Lululemon Athletica, the famous yoga sportswear clothing company, and its position in Tempur Pedic International returned 11.8%.
Chipotle Mexican Grill has produced an excellent 10.1% return for Manatuck Hill since the end of March despite the double digit decline in the market. It seems Cramer was right when he called bottom for the made-to-order burrito giant three months ago; it has been gaining steadily ever since.
However, with the sweets come the spoils. Manatuck Hill also lost big on several stocks. To be precise, six of its top 20 stock picks (almost one-third) produced negative returns over 40%; these include -56.5% in Reald, -52.8% in STEC, -50.3% Imax, -46.1% in Silicon Graphics, -45.4% in Alcatel Lucent and -40.4% in Sonus Networks.
Time will tell whether these stocks will turn around, but in the meantime investors may consider adopting Manatuck Hill’s top positions. These 20 stocks managed to beat the index funds by 7.7 percentage points since March.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
