Bronson Point Partners is a hedge fund founded by Larry Foley and Paul Farrell in 2009. Prior to establishing Bronson Point, Larry Foley was a senior portfolio manager at SAC Capital and Paul Farrell was at Pequot co-managing the firm’s Scout Fund Group. Bronson Point combines fundamental research with active portfolio management and makes long/short equity investments in U.S. stocks.
Bronson Point reduced its portfolio from $244 million at the end of June to only $135 million at the end of the third quarter. Bronson Point also cut almost half of its positions. It had had 88 positions at the end of the second quarter, and now it only holds 49 positions. The company has sold out a number of stocks. For instance, it sold out Conagra Inc (CAG). CAG was a new position in Bronson Point’s portfolio in the second quarter. CAG returned 3.96% since the end of September, underperforming the market by almost 8%. Bronson Point also sold out Newmont Mining Corp (NEM), which was also a new position of the fund in the second quarter. NEM returned 10.63% since the end of the third quarter, underperforming the market by 1%. In addition to CAG and NEM, Bronson Point also sold out Royal Caribbean Cruises Ltd (RCL), Lowes Companies Inc (LOW), Xerox Corp (XRX), International Game Technology (IGT), American Science & Energy Inc (ASEI), and Procter & Gamble Co (PG).
Bronson Point doubled its holding in RAH to $5.4 million. RAH returned 7.13% since the end of September. Besides RAH, Bronson also doubled its position in Imax Corp (IMAX) to $2.6 million. IMAX returned 32.9% since the end of September, beating the market by over 20 percentage points. Bronson Point increased its stake in Abovenet Inc (ABVT), Wells Fargo & Co (WFC), International Flavors & Fragrances (IFF) and Knology Inc (KNOL) as well.
Bronson Point bought new stakes in Consol Energy Inc (CNX). The fund initiated a brand new $4.92 million position in CNX over the third quarter. The energy company reported net income of $167.33 million for the third quarter of 2011, up from $75.38 million last year. CNX returned 23.41% since the end of September, beating the SPY by about 12 percentage points.
Bronson Point is also bullish about Kraft Foods Inc (KFT) and General Electric Co (GE). The fund opened new positions in these two stocks. It reported to own $4.2 million worth of KFT and $3.4 million worth of GE at the end of September. KFT returned 5.66% and GE returned 6.44% since the end of September. Though both stocks underperformed the market during the same period, they were quite popular among hedge funds tracked by Insider Monkey. Warren Buffett had $3.5 billion invested in KFT and $147 million invested in GE. Other fund managers bullish about these two stocks include Ken Fisher and Cliff Asness.
We like Bronson Point Partners. Although it is a new hedge fund, its two founders, Larry Foley and Paul Farrell, had years of experience in portfolio management and combined their experiences from different hedge fund firms to open Bronson. We believe that by focusing on the best stock picks of Bronson Point Partners, investors are more likely to beat the market in the long term.
Disclosure: I am long SPY.