Sandler Asset Management was established in 1988. It currently manages over $1 billion in assets under management. Andrew Sandler joined the firm in 1991 as a research analyst and has served as portfolio manager since 1997. He leads the investment team and also serves on the Management Committee. Mr. Sandler has a BS in Finance from University of Wisconsin.
During the second quarter, Sandler reduced his position in iShares Russell 2000 (IWM) puts and MasterCard Inc. (MA) by over 30%. The fund also slightly reduced its position in Coca Cola (KO) by 5%. IWM lost 16.23% vs. -8.47% for SPY since the end of June, which means that IWM puts provided a timely hedge during severe market turmoil. MA and KO had positive returns during the same period. MA even had a double digit return of 17.5%.
Here are Sandler Asset Management’s top stock picks at the end of June:
Company | Ticker | Value (x1000) | Activity | Return since June |
ISHARES RUSSELL 2000 Puts | 41400 | -33% | -16.23% | |
VAIL RESORTS INC | 32178 | 141% | -14.21% | |
TANGER FACTORY OUTLET | 29300 | 72% | 4.14% | |
SEARS HOLDINGS Puts | 28290 | 13% | -18.28% | |
KANSAS CITY SOUTHERN | 26758 | 108% | -12.25% | |
SCRIPPS NETWORKS Calls | 24831 | New | -11.01% | |
ILLUMINA INC | 23875 | New | -40.15% | |
CABLEVISION SYSTEMS | 23414 | 0% | -30.40% | |
PETSMART INC | 22032 | New | -1.66% | |
SCRIPPS NETWORKS | 21984 | 86% | -11.01% | |
ROBBINS & MYERS INC | 21927 | 54% | -15.62% | |
CERNER CORP | 21425 | New | 15.01% | |
BUNGE LTD Puts | 20686 | 49% | -8.43% | |
JOY GLOBAL INC | JOYG | 20105 | 46% | -20.17% |
COCA COLA CO | 19285 | -5% | 5.72% | |
NEOGEN CORP | 19033 | 102% | -24.64% | |
DOVER CORP | 18848 | 178% | -24.64% | |
DISCOVERY COMM | 18666 | 64% | 3.83% | |
FORTINET INC | 18661 | 478% | -36.28% | |
CHECK POINT SOFTWARE | 17930 | New | -0.25% | |
USANA HEALTH SCI Puts | 17138 | New | -13.17% | |
SCHEIN HENRY INC | 17124 | New | -9.18% | |
VIACOM INC NEW | 16789 | 58% | -0.31% | |
MASTERCARD INC | 16182 | -34% | 17.46% | |
BLACKBOARD INC Calls | 15620 | New | 2.12% | |
JB HUNT TRANSPORT | 15502 | 64% | -19.14% |
During the second quarter, Sandler initiated a brand new $25 million position in Scripps Networks calls. SNI lost 11.01% since the end of June. Sandler also added $24 million Illumina Inc., $22 million PetSmart Inc., and $21 million Cerner Corp. to the portfolio. CERN had a double digit positive return of 15.01% since the end of second quarter. Jim Simons also had $42 million in CERN stocks at the end of June (check out Simons’ top stock picks).
The top three largest positions of the fund are IWM puts, Vail Resorts Inc., and Tanger Factory Outlet. These three positions returned about 3% on a weighted average basis since the end of June, outperforming SPY by about 11 percentage points. Another main investor in SKT shares is Ken Heebner, who invested $72 million in the stock (check out Heebner’s top stock picks).
The best performing position in the fund is Sears Holdings puts. It is also the fund’s fourth largest position, with over $28 million in value. Additionally, Sandler increased the position by 13% during the second quarter. SHLD declined by 18.3% since the end of June. Stephen Mandel also had $197 million invested in SHLD puts (check out Mandel’s top stock picks).
Sandler's other profitable large cap positions were KO, MA, and DISCK. We like Andrew Sandler. Three out of his top four positions outperformed the market, and two of them had double digit returns even when SPY declined by over 8%. We believe that by focusing on Sandler’s top stock picks, investors are able to beat the market in the long run.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
