By: Manisha Sethi Oct. 11, 2018

On August 7, 2018, Cottage Street Advisors LLC disclosed its SEC 13F filings for Q2 2018 and reported a portfolio value of $170.07 million, of which its top 10 holdings account for 37.37%. The top holdings include SPDR Portfolio Short Term Corporate Bond ETF (SPSB), Magellan Midstream Partners, L.P. (MMP), iShares S&P SmallCap 600 Growth ETF (IJT), Apple, Inc. (AAPL), and iShares Edge MSCI Min Vol Global Currency Hedged ETF (HACV). The firm invests across various sectors with a majority of its investments  (48.44%) in the financial sector.

Cottage Street Advisors LLC is a privately held company in Marion, MA, and is a single location business. The company was established in 1985 and incorporated in Massachusetts. Cottage Street Advisors is a Multi-Family Office focused on managing all aspects of families’ financial affairs including: asset management, investment due diligence, estate creation and guidance, foundation management, and business succession.

According to a Raltin study, 19% of Cottage Street Advisors’ new purchases outperform S&P 500 by more than 20%, whereas only 8.51% or 8 new stocks underperform by more than 20%. Overall, 52.13% of the new purchases (between Q1 2014 and Q1 2018) outperform the index. A detailed description of Raltin’s methodology can be found here. The following table mentions the number of new purchases relative to S&P 500 performance.

S&P outperformance category Number of new stock purchases Total new purchases (% )
>20% 1819.15
10 to 20%66.38
0 to 10%2526.6
-10 to 0%2324.47
-20 to -10%1414.89
<-20%88.51
Total stocks94

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In Q2 2018, the firm bought 8 new stocks across sectors including real estate, consumer discretionary, IT, communications, industrials, and energy. The following table lists new purchases by the firm as well as their holding value and the number of shares purchased.

StocksNumber of sharesHolding value ($1,000)
Sotherly Hotels Inc. (SOHO)1,99,8001,395
Yum China Holdings, Inc. (YUMC)33,3501,281
Lam Research Corp. (LRCX)3,400588
Netflix, Inc. (NFLX)1,100431
Caterpillar, Inc. (CAT)2,800379
Amazon.com, Inc. (AMZN)217369
Royal Dutch Shell plc (RDS.A)2,950204
American Transportation Holdings, Inc. (ATHI)20,000128

The next table lists the investor’s portfolio value for 5 quarters, from Q1 2017 to Q1 2016 and the top holdings in each quarter that outperform S&P 500 IRR. Notably, Applied Materials, Inc. (AMAT), Rockwell Collins, Inc. (COL), Netflix, Inc. (NFLX), and Adobe Systems, Inc. (ADBE) outperform the index by more than 20%.

PeriodTotal portfolio value ($Mn)Top holdings (ticker, % IRR difference from S&P 500)
Q1 2017140.38Applied Materials, Inc. (AMAT, 31.44), Rockwell Collins, Inc. (COL, 27.26), SPDR Technology Select Sector ETF (XLK, 11.12)
Q4 2016131.12Rockwell Automation, Inc. (ROK, 26.8), Yum! Brands, Inc. (YUM, 9.51)
Q3 2016129.84Netflix, Inc. (NFLX, 68.13), Adobe Systems, Inc. (ADBE, 21.37), VirnetX Holding Corp. (VHC, 11.34)
Q2 2016123.48Amazon.com, Inc. (AMZN, 19.84)
Q1 2016114.48