CAS helped Raging Capital Management return an estimated 1.2% for May 2015. RRC did not.
CAS helped Raging Capital Management Llc return an estimated 1.2% for May 2015 - the fully hedged version returns 1.24%
Raging Capital Management Llc generated a 1.18% return on their publicly disclosed long portfolio for the month ending May 2015, outperforming the S&P500 by 117 basis points (bp). On a hedged basis, the portfolio would have returned 1.24% StockAlpha over the same period. Raging's StockAlpha reflects the return of the net return if each security in their portfolio was hedged with a sector ETF, such that the resulting portfolio was market, beta and sector neutral. StockAlpha in the Materials sector contributed the most to StockAlpha during the month.
Positive Contributors to Raging's Returns
Raging’s position in Castle (A.M.) & Co (CAS) contributed the most to the performance of the manager’s long-portfolio during the month. Over the month of May 2015, Raging's 3.1% position in Castle (A.M.) & Co (CAS) increased in value by 57%, contributing 1.74% (3.1%*57%=1.74%)to the long portfolios overall return. Looking at Raging's portfolio through a fully hedged StockAlpha lens, the holding of Castle (A.M.) & Co (CAS) also provided the largest contribution to fully hedged returns. Castle (A.M.) & Co (CAS) returned 57% during the month compared to the Materials sector, which returned 0.4%. As a result, after taking into account Castle (A.M.) & Co (CAS)'s beta relative to its sector, the position contributed 1.7% of StockAlpha to the Raging’s monthly performance.
Negative Contributors to Raging's Returns
Much of the drag on Raging’s long-portfolio during the month can be attributed to the holding of Range Resources Corp. (RRC). Over the month of May 2015, the manager's 12% position in Range Resources Corp. (RRC) returned -15.7%, contributing -1.88% (12%*-15.7%=-1.88%)to the long portfolios overall return. Looking at Raging's portfolio through a fully hedged StockAlpha lens, the holding of Range Resources Corp. (RRC) also provided the most negative contribution to fully hedged returns. Range Resources Corp. (RRC) returned -15.7% during the month compared to the Energy sector, which returned -5.5%. As a result, the position contributed -1.2% of StockAlpha to the manager’s monthly performance.
Overlap with other hedge funds
Raging’s top 10 largest positions, Quanex Building Products (NX) is the name that is owned by most other hedge funds. 1.7% of hedge funds within Symmetric's universe had a position in Quanex Building Products (NX) as of March 31, 2015, making it a contrarian name relative to other stocks, even though it is the most consensus within the manager's top positions. Raging initiated its position in Quanex Building Products (NX) 0.5 years ago. Other hedge funds that have significant ownership stakes in Quanex Building Products (NX) include Mason Hill Advisors Llc (24.8% position initiated 0.3 years ago), Talara Capital Management (13.2% position initiated 0.8 years ago) and Hirzel Capital Management Llc (8.5% position initiated 0 years ago). Overall, Raging's book is contrarian, with the average position held in the portfolio held by 3.7% of hedge funds. So far, Raging Capital’s estimated returns for June are up fifty-three basis points. RRC continues to be a source of weakness, but Global Cash Access Holdings, Inc (GCA) has stepped in to contribute forty-nine bps, month to date. Screen, monitor and bechmark hedge fund managers to identify unique sources of alpha at Symmetric.io
