HypeZero10 Returns 11.5% Last Quarter

For those investors new to HypeZero, I run an automated portfolio of 10 of the best investment ideas from the best hedge funds called HypeZero10.

We take the quarterly holdings of the best hedge funds, and then run our sophisticated algorithm on those holdings to pick the 10 ideas.

This algorithm has returned over 223+% since 2004 exclusive of dividends. A $10,000 investment would be worth almost $32,300 in over 8 years.

For the November 15th, 2012 to May 15th, 2013, HypeZero10 returned 31.2% as compared to 23.9% for the S&P.

This quarter there are two new positions as News Corp (NWSA) and BankUnited (BKU) have been discraded:

  • BP plc (BP)
  • Exco Resources (XCO)

I will have more to say about these companies in future posts.

Disclosure: I am still long AIG

HypeZero10 Returns 17.1% Last Quarter

For those investors new to HypeZero, we run an automated portfolio of 10 of the best investment ideas from the best hedge funds called HypeZero10.

We take the quarterly holdings of the best hedge funds, and then run our sophisticated algorithm on those holdings to pick the 10 ideas.

This algorithm has returned over 199+% since 2004 exclusive of dividends. A $10,000 investment would be worth almost $30,000 in over 8 years.

For the November 15th to February 15th quarter, HypeZero10 returned 17.1% as compared to 12.9% for the S&P.

Here are the results:

Company Price (Nov 15) Price (Feb 15) Hedge Fund 
Apple Inc. (AAPL) $525.62 $460.16 David Einhorn
Sears Holdings Corporation (SHLD) $58.48+spinoffs $47.33 Edward Lampert
AIG (AIG) $31.24  $38.35 Bruce Berkowitz 
Yahoo! Inc. (YHOO) $17.89  $21.02 Dan Loeb
Procter & Gamble Co. (PG) $66.32  $76.54 Warren Buffett 
AutoNation Inc. (AN) $40.28  $46.03 Edward Lampert 
BankUnited, Inc. (BKU) $22.16  $27.57 Wilbur Ross
News Corp. (NWSA) $23.12  $28.90 Donald Yacktman 
Assured Guaranty Ltd. (AGO)  $12.88  $19.61 Wilbur Ross
Canadian Pacific Railway Limited (CP) $90.38 $118.87 William Ackman
Return  S&P Return   12.9%

Check out new holdings for the February 15th quarter at HypeZero10

Disclosure: I am long AIG

HypeZero10 Beats S&P By 3.2%

For those investors new to HypeZero, we run an automated portfolio of 10 of the best investment ideas from the best hedge funds called HypeZero10.

We take the quarterly holdings of the best hedge funds, and then run our sophisticated algorithm on those holdings to pick the 10 ideas.

This algorithm has returned over 170+% since 2004 exclusive of dividends. A $10,000 investment would be worth $27,000 in over 8 years.

For the August 15th to November 15th quarter, HypeZero10 was flat as compared to -3.2% for the S&P.

Here are the results:

Company Price (Aug 15) Price (Nov 15) Hedge Fund 
Apple Inc. (AAPL) $630.83 $525.62 David Einhorn
Sears Holdings Corporation (SHLD) $56.60 $58.48+spinoffs Edward Lampert
AIG (AIG) $34.03 $31.24  Bruce Berkowitz 
Yahoo! Inc. (YHOO) $14.76 $17.89  Dan Loeb
Procter & Gamble Co. (PG) $66.64  $66.32  Warren Buffett 
AutoNation Inc. (AN) $39.53 $40.28  Edward Lampert 
BankUnited, Inc. (BKU) $25.78  $22.16  Wilbur Ross
News Corp. (NWSA) $23.32 $23.12  Donald Yacktman 
Assured Guaranty Ltd. (AGO)  $13.41 $12.88  Wilbur Ross
Canadian Pacific Railway Limited (CP) $84.38 $90.38 William Ackman
Return  +0.0% S&P Return -3.2%

Check out new holdings for the November 15th quarter at HypeZero10. I will have more details, but AIG is the top pick as a number of hedge funds are bullish on the stock.

Disclosure: I am long AIG

Income Securities Watchlist

Currently, I am wary of income producing securities because interest rates are so low. As a result, I’m concentrating on income securities that have adjustable rates or are convertible. However, two of these three securities are neither adjustable or convertible. Here are some securities that are on my watch list.

AVF (AIG $25 denominated 7.70% Junior Debentures)

I have written about this security before, but it is finally at the price ($25.08) that I am comfortable with. Here are the brief details of the security. Read full analysis here.

  • Symbol: AVF
  • Principal Amount: $25
  • Coupon Rate: 7.7% or $1.925 before December 18, 2047. Three-month LIBOR plus 3.616% thereafter.
  • Call Date: December 18, 2012. AIG can redeem all ($1 billion), but not in part  before if a “tax event” happens or a “rating agency event” occurs anytime before December.
  • Mature Date: December 18, 2062, which can be extended to December 18, 2077
  • Distribution Dates: 3/18, 6/18, 9/18 & 12/18
  • Current Price: $25.08
I would buy AVF at any price around $25. 

HAVNP (10.25% capital securities New York Community Bancorp (NYB))

Here are the details of the security:

  • Symbol: HAVNP
  • Principal Amount: $10
  • Coupon Rate: 10.25%
  • Call Date: Currently callable $10.36, in 2013 callable at $10.31, etc..
  • Mature Date: 6/30/2029
  • Distribution Dates: 3/31, 6/30, 9/30 & 12/31
  • Current Price: $11.22

The danger with this security is that it can be called at anytime at $10.36. However, I’m not sure NYB will call it because:

  • NYB gives a dividend of 7% on the common shares.
  • The float is really small for HAVNP ($25.5 million).

To be safe, I would buy these at $10.50 or under. The price does drop to that range once in a while.

 PCC

PMC Commercial Trust (PCC) is a REIT that makes loans to “small businesses collateralized by first liens on the real estate of the related business, primarily in the limited service hospitality industry.” Most of the loans they make are mostly guaranteed by the SBA (Small Business Administration). They sell off the guaranteed portion and keep the rest. 

The reason I am watching this stock is:

  • They are trading at almost half of book value.
  • They pay almost a 9% dividend.
  • There has been inquiry from private equity about the company and it has formed a special committee to study those inquiries.
  • Most of their loans are adjustable rates. Due to the low interest rates, they are really hurting. They are still profitable if you back out the costs for the aforementioned special committee. If interest rates rise, the stock price should rise with it.

There are risks associated with this stock:

  • Their income is not covering dividend payments. So, they could cut the dividend in the future.
  • Their loans are concentrated in the hospitality industry and in one region (Texas).

I have a small position in this stock that I initiated a while back. However, I’m waiting to see what happens before I buy more.

Disclosure: I am long PCC.