Pegasus Fund is turning some magic this year, Clareville Capital’s flagship fund is up almost 16 percent in the first two months of this year. Pegasus returned 6.5 percent in February, these more than brilliant returns are in stark contrast from how the fund performed in last year. Pegasus was up only 1 percent in last year. The Equity Long/Short hedge fund has been doing really well into 2013 and the managers are inclined to stick to their holdings rather than sell them to realize actual profits. The HFRI Equity Hedge Index was up 3.8 percent over the same period.
Pegasus has a very bullish view of The Weir Group PLC (LON:WEIR) and John Wood Group PLC (LON:WG), both positions make up a large portion, 9.1 and 8.5 percent, of the fund’s portfolio and have contributed +1.61 and +1.96 percent to fund’s NAV as of the end of February. The stocks of both companies rose as each gave out positive guidance for 2013. David Yarrow and Angus Donaldson, managers of Pegasus, have particular confidence in Bob Keiller’s leadership at Wood Group. The company has a trail of strong acquisitions and handsome cash flow and despite of a turbulent 2012, the future for Wood Group looks bright. Pegasus is very satisfied that they did not join the panic last year and held onto the Scottish oil and gas company.
As for The Weir Group PLC (LON:WEIR), we have noted several times that the bears have been highly focused on the company and a number of hedge funds have a short bet in the stock (see all European Hedge Fund Short Positions). Famous names like Blue Ridge Capital, Steadfast Capital and Lansdowne Partners have a negative position in the company. Pegasus’ portfolio managers have also noted the short sellers’ interest in Weir Group (highest in FTSE 350) and comment that this is a difficult time for them as the stock is up 30 percent YTD and has been touching record highs in the past weeks. The Weir Group PLC (LON:WEIR) is involved in several industries related to the mining, distribution of oil and gas and also manufactures equipment used in the oil and gas sector.
What does value investing really mean? Q1 2021 hedge fund letters, conferences and more Some investors might argue value investing means buying stocks trading at a discount to net asset value or book value. This is the sort of value investing Benjamin Graham pioneered in the early 1920s and 1930s. Other investors might argue value Read More
Pegasus has also been profitable on its positions in Thomas Cook Group plc (LON:TCG), incidentally the stock is up almost 20 percent today so Pegasus is gaining further on the position in March. Booker Group Plc (LON:BOK), Lancashire Holdings Limited (LON:LRE), Paragon Group of Companies PLC (LON:PAG), Shaftesbury plc (LON:SHB) were also positive movers in the long portfolio.
Overall Pegasus has lost in Britvic Plc (LON:BVIC), Stagecoach Group plc (LON:SGC), Cairn Energy PLC (LON:CNE) and Lamprell Plc (LON:LAM).