ACK Asset Management was founded back in 2005 by Richard S. Meisenberg and John Henry Reilly III, who are also the fund’s co-portfolio managers. Prior to founding ACK Asset Management, Richard Meisenberg worked as an analyst at Oppenheimer & Co. and Smith Barney, and he was a founding partner at Palisade Capital Management. John Henry Reilly III worked as Managing Director and Senior Equity Analyst at CJS Securities, Inc. Working on these positions, both partners were focused on small- and mid-cap companies, which also influenced the fund’s investment strategy. The fund focuses on long strategy and cyclical analysis, which has proved to have been a good choice.
The fund has been returning positively and steadily during the past period. As for 2013, the fund returned 22.72%, followed by 5.37% in 2014, 5.06% in 2015, 5.77% in 2016, and 9.92% in 2017. In 2018 the return was 0.70%, but the fund got back on the usual track returning 12.70% this year through June. The compound annual return is 11.9%.
[caption id="attachment_565788" align="aligncenter" width="750"] Phongphan/Shutterstock.com[/caption]
Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. Our long strategy is based on the consensus picks of the 100 best performing hedge funds. This strategy was launched 5 years ago and generated a cumulative return of 115%. You can think of it as a mutual fund that returned 16.2% annually over the last 5 years, vs. 11.1% annual gain for the S&P 500 ETF (SPY). Basically we outperform the S&P 500 Index by 5 percentage points annually by identifying the top stock picks of the best hedge fund managers (see the details here).
Our short strategy is based on shorting hedge fund hotels that are likely to experience large hedge fund sales during market weaknesses. We launched this strategy in February 2017. It’s been almost 2.5 years and the stock picks of this strategy lost a cumulative 24.7% vs. a cumulative gain of 30.8% for the S&P 500 ETF. This is an absolutely mind blowing performance. The annualized return of our short picks is -11.2%, vs. 11.8% annualized gain for the S&P 500 Index during the same period. The annual alpha of this strategy is 23 percentage points. Jim Chanos doesn’t generate this kind of performance. The best thing about this short strategy is that it provides an excellent hedge during market meltdowns. For example, in Q4 of 2018 when the S&P 500 Index lost nearly 14%, this strategy’s picks lost 25% protecting our premium subscribers from large losses.
Our newsletters are successful because we follow hedge fund managers like Richard S. Meisenberg and John Henry Reilly III to identify the best and worst hedge fund stock picks. In this article we are going to take a look at ACK Asset Management’s top stock picks.
A new addition, Science Application International Corp (NYSE:SAIC), was the fifth most valuable position in ACK Asset Management’s equity portfolio at the end of the first quarter of 2019. A total of 28 hedge funds were tracked by Insider Monkey were investing in the stock, which is an increase of 8 hedge funds compared to the previous quarter. The company’s largest shareholder in this period was Rubric Capital Management, holding a stake worth $ 49.41 million. Horizon Asset Management, Millennium Management and AQR Capital Management were also among the company’s top shareholders for Q1 2019.
At the fourth place in the fund’s portfolio was Quanta Services Inc (NYSE:PWR), which was a new addition during the previous quarter. At the end of the Q1 2019, 24 hedge funds were bullish on the company, which is a decrease of 11% compared to the last quarter of 2018. The most valuable stake was held by Peconic Partners LLC, amassing $435.7 million. Following it were Greenhaven Associates, D E Shaw, Millennium Management, and AQR Capital Management as you can read more in detail here.
ACK Asset Management’s managers boosted interest in Wms Industries Inc (NYSE:WMS) by 4% during Q1 2019, which brought it from the fifth to the third place in the fund’s portfolio. A total of 17 hedge funds were investing in the company, as it was the case one quarter before. The top shareholder at the end of the first quarter of 2019 was Stockbridge Partners, holding shares of total value of $96.8 million. Impax Asset Management was the company’s second largest investor, followed by ACK Asset Management, holding 1.27 million shares worth $26.87 million. Marshall Wace LLP and D E Shaw were among other interested investors, as you can read more about it here.
The second most valuable position in ACK Asset Management’s portfolio at the end of Q1 2019 was Rogers Corp (NYSE:ROG), boosted by 94% during this period. The fund was also the company’s top shareholder, holding $27.10 million worth stock at the end of the March. Apart from ACK Asset Management, 8 other hedge funds were interested in the company, which is by 3 hedge funds more compared to the previous quarter. Among other funds bullish on the company were Shellback Capital, Winton Capital Management, and Royce & Associates.
ACK Asset Management’s top stock pick for the first quarter of 2019 was Astronics Corp (NASDAQ:ATRO). The company was in total of 13 hedge fund’s portfolios, which is an increase of 86% compared to the previous quarter. International Value Advisers held the most valuable stake worth $52.4 million. Right behind it was ACK Asset Management, holding shares of total value of $31.9 million. Other investors investing in the company included Millennium Management, Royce & Associates, and Citadel Investment Group, as you can see more here.