{"id":82324,"date":"2015-12-11T14:05:10","date_gmt":"2015-12-11T19:05:10","guid":{"rendered":"http:\/\/countingpips.com\/?p=82324"},"modified":"2015-12-11T06:52:31","modified_gmt":"2015-12-11T11:52:31","slug":"hitch-a-ride-on-the-hedge-fund-express","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/12\/hitch-a-ride-on-the-hedge-fund-express\/","title":{"rendered":"Hitch a Ride on the Hedge Fund Express"},"content":{"rendered":"
December 11, 2015<\/div>
\r\n<\/div><\/div>

By WallStreetDaily.com<\/u><\/a> \"iBillionaire<\/p>\n

By Jonathan Rodriguez<\/a>, Senior Analyst<\/em><\/p>\n

Over the last few weeks, we\u2019ve taken an in-depth look at hedge funds.<\/p>\n

You\u2019ve learned how to see what the billionaires are buying and how to decrypt their elusive trading strategies through their 13F filings<\/a>.<\/p>\n

But, as you know, not all hedge funds<\/a> are created equal.<\/p>\n

Direxion Investments tracks 16 of the nation\u2019s top-performing funds in its iBillionaire Index, and the vast majority posted negative one-year returns.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

However, two of them did manage to beat the market this year \u2013 and they may have the blueprint for success in 2016.<\/p>\n

The two outperforming iBillionaire funds are Appaloosa Management (3.8% gain) and Trian Fund Management (2.6% gain). Their winning formula for 2015?<\/p>\n

Consumer discretionary and staples plays.<\/p>\n

As Americans pocketed big savings at the pump, these funds cashed in on increased consumer spending. But let\u2019s take a closer look at where they\u2019re putting their money for next <\/em>year.<\/p>\n

Follow the Leaders<\/h2>\n

Appaloosa Management\u2019s biggest third-quarter buy was Delta Air Lines Inc.<\/strong> (DAL<\/a>).<\/p>\n

David Tepper\u2019s fund scooped up 1.8 million shares of Delta, effectively doubling its holding. Delta now makes up 9.6% of Appaloosa\u2019s total long equity portfolio.<\/p>\n

The company trades at just nine times forward earnings \u2013 a 22% discount to the industry. Currently, Delta has a price-to-sales ratio of 1.0 times \u2013 a 44% discount to the S&P 500 Index (1.8 times).<\/p>\n

But what separates Delta most from competitors is outsized earnings growth.<\/p>\n

Delta projects a 26% increase in year-over-year earnings for 2016, thanks to record-low oil prices. Analysts expect its closest competitor, JetBlue Airways Corp.<\/strong> (JBLU<\/a>), to grow at 15%, barely more than half of Delta\u2019s projection.<\/p>\n

From a technical perspective, shares are trending upward with strength. In September, Delta\u2019s chart produced a \u201cgolden cross\u201d \u2013 a cross of the 50-day moving average over the 200-day moving average.<\/p>\n

This is a typically bullish indicator for traders. And shares are pounding at the door of their 52-week high. Time to get on board.<\/p>\n

Distributing the Goods<\/h2>\n

Trian Management\u2019s largest buy in the third quarter was Sysco Corp.<\/strong> (SYY<\/a>). Nelson Peltz\u2019s firm tripled its existing position, adding more than 31 million shares to the portfolio. At present, the Sysco position comprises 13.8% of Trian\u2019s portfolio.<\/p>\n

Sysco is North America\u2019s largest distributor of food and related products, and the company provides goods and services to 425,000 customers across the continent.<\/p>\n

Over the last five years, the company has lagged in earnings per share, revenue, and share price growth versus the industry.<\/p>\n

But Trian, a well-known activist hedge fund, specializes in turning around underperforming companies \u2013 particularly food services. And Sysco certainly fits the bill.<\/p>\n

Peltz advocates deep cost-cutting and innovative solutions to boost revenue growth. He\u2019s also not afraid to suggest unpopular spinoffs or outright sales to rivals.<\/p>\n

Now, shares currently trade at 37 times trailing earnings \u2013 a hefty premium to both the food industry and the S&P 500.<\/p>\n

But while Sysco isn\u2019t the best bargain, investors love Peltz\u2019s boardroom prowess. Since announcing his stake in August and his election to the board of directors, the stock has gained 15%.<\/p>\n

Sysco is a solid turnaround play for aggressive investors who are willing to exercise patience to get paid big.<\/p>\n

On the hunt,<\/p>\n

Jonathan Rodriguez<\/p>\n

The post Hitch a Ride on the Hedge Fund Express<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Jonathan Rodriguez, Senior Analyst Over the last few weeks, we\u2019ve taken an in-depth look at hedge funds. You\u2019ve learned how to see what the billionaires are buying and how to decrypt their elusive trading strategies through their 13F filings. But, as you know, not all hedge funds are created equal. Direxion Investments […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-82324","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/82324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=82324"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/82324\/revisions"}],"predecessor-version":[{"id":82352,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/82324\/revisions\/82352"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=82324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=82324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=82324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}