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Buckingham Capital Management’s Top Stock Picks

Sieni Kimalainen

Buckingham Capital Management was launched back in 1985 by David Keidan. Mr. Keidan is the fund’s President and Chief Investment Officer, and also a Trustee at Montefiore Health System Inc. He holds MBA from Harvard Business School, and prior to founding Buckingham Capital Management he gained vast experience in research, trading and asset management. He also founded Buckingham Research Group Incorporated (BRG), and was its President for thirty-six years before launching the fund. Buckingham Capital Management is a multi-strategy hedge fund, employing diversified strategy and RAF strategy, and mainly focuses in the consumer sector.

As for the return, the fund oscillated rapidly during the past several years. Starting off positively in 2014 with the return of 9.1%, the next year brought a drop of -11.2%. The next period was followed by a steady comeback, with 8.96% in 2016 and 25.41% in 2017, which was also the highest figure during the period. However, 2018 proved to be the worst, with the return of -27.93%. Year to date, the return for 2019 was 21.36%, according to the data from June. With an annualized return of 6.4%, the fund seems to be struggling to attract investors.

David Keidan of Buckingham Capital

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 David Keidan to identify the best and worst hedge fund stock picks. In this article we are going to take a look at Buckingham Capital Management’s top stock picks for Q2 2019.

As for the second quarter of 2019, the fifth most valuable position in Buckingham Capital Management’s portfolio was Delta Air Lines, Inc. (NYSE:DAL). Even though David Keidan cut the position by 1%, the company rose from 12th place in the fund’s portfolio since the previous quarter. There were 70 hedge funds interested in investing in Delta Air Lines, Inc. in this period, which is 10 more compared to the previous quarter. However, shareholders seem to have gradually been decreasing interest in this company during the past several years, as you can see here. For Q2 2019, the company’s top shareholder was Berkshire Hathaway holding a stake worth $40.2 billion. The following were Landsowne Partners, PAR Capital Management, and Two Sigma Advisors.

As the fourth top stock pick for the second quarter 2019 was Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), cut by 17% during the period. A total of 35 hedge funds held long positions in this stock, a change of -20% from the previous quarter. The largest stake in Norwegian Cruise Line Holdings Ltd was held by HG Vora Capital Management, which reported holding $171.7 million worth of stock at the end of June. Other investors bullish on the company were Renaissance Technologies, AQR Capital Management, and Two Sigma Advisors.

The third most valuable position in Buckingham Capital Management’s at the end of the second quarter 2019 was Roku Inc (NASDAQ:ROKU), coming from the 8th place despite being cut by 33% during this quarter. A total of 33 hedge funds tracked by Insider Monkey were bullish on the stock, which is 10 hedge funds less since the previous quarter. The company’s top shareholder was Renaissance Technologies, holding $191.6 million worth of stock. Among other hedge funds interested in the company were Whale Rock Capital Management, Millennium Management, and Citadel Investment Group.

PVH Corp. (NYSE:PVH) was the second  most valuable position in Buckingham Capital Management, a clothing company which owns brands like Tommy Hilfiger, Calvin Klein, Van Heusen etc. David Keidan decided to boost the position by 9% during this period. At the end of Q2 2019, a total of 32 hedge funds were interested in the company, a decrease of around 24% from the previous quarter. Among them, Pzena Investment Management held the largest stake in PVH Corp., worth $284 million. Other top shareholders included Renaissance Technologies, D E Shaw, and Citadel Investment Group.

Buckingham Capital Management’s top stock pick for Q2 2019 was Amazon Com Inc (NASDAQ:AMZN), coming up from the seventh position since the previous period. Since the latest update, Amazon was number three among 30 Most Popular Stocks Among hedge funds in Q2 of 2019. Despite being among the favorite stocks, a total of 163 hedge funds were investing in Amazon Com Inc, which is a decrease of 10% compared to the previous quarter. Viking Global was the company’s top shareholder, amassing a stake worth $1.5 billion. The following top shareholders were Tiger Global Management, AQR Capital Management, and Adage Capital Management. Amazon wasn't one of billionaire Lee Cooperman's top stock picks but you can read about the 3 dirt cheap stocks Lee Cooperman can't stop talking about here.

Disclosure: None. This article was originally published at Insider Monkey.