By: Manisha Sethi Sep. 12, 2018
FJ Capital Management LLC reported its SEC 13F filings for the first quarter of 2018 on May 14. Its portfolio is valued at $812.18 million. The firm invested in 24 new stocks and closed out positions in 20 stocks. Its highest holding is 23,95,300 shares in Veritex Holdings Inc. (VBTX). FJ Capital Management LLC is based in McLean, Virginia, and was founded in 2007 by Martin Friedman and Andrew Jose. The SEC-registered investment advisor majorly invests in the financial sector, with focus on the community and regional banking sector. In addition, it manages client-focused equity portfolios.
According to a study conducted by Raltin, 63% of FJ Capital Management’s new purchases outperform the S&P 500. On the other hand, 15% or about 14 new stock purchases (between Q1 2014 and Q1 2018) underperform the S&P 500 by more than 10%. Only 4 out of 92 new purchases underperform the S&P 500 by more than 20%. A detailed description of Raltin’s methodology can be found here. The following table mentions the various categories of new purchases relative to the performance of S&P 500.
|S&P outperformance category||Number of new stock purchases||Total new purchases (%)|
|10 to 20%||20||21.74|
|0 to 10%||11||11.96|
|-10 to 0%||20||21.74|
|-20 to -10%||10||10.87|
Of the 24 new stocks purchased this quarter, Opus Bank (OPB) accounts for 1% of the portfolio. The table below elaborates on the new purchases as well as the number of shares and holding value.
|Stocks||Number of shares||Holding value ($1,000)|
|Opus Bank (OPB)||317,000||8,175|
|FCB Financial Holdings (FCB)||152,200||7,777|
|CenterState Banks Inc. (CSFL)||222,000||5,591|
|Charter Financial Corp. (CHFN)||270,500||5,337|
|Bridgewater Bancshares, Inc. (BWB)||278,300||3,272|
|SB Financial Group, Inc. (SBFG)||171,300||2,913|
|Kearny Financial Corp (KRNY)||223,100||2,844|
|United Financial Bancorp, Inc. (UBNK)||110,000||1,615|
|OP Bancorp (OPBK)||72,300||830|
|Aspen Insurance Holdings, Inc. (AHL)||6,400||286|
|Comerica, Inc. (CMA)||3,000||286|
|Essent Group Ltd. (ESNT)||6,700||285|
|OneMain Holdings, Inc. (OMF)||9,500||284|
|Health Insurance Innovations, Inc. (HIIQ)||9,600||279|
|Zions Bancorporation (ZION)||5,100||267|
|Heritage Financial Corp. (HFWA)||8,000||245|
|Voya Financial, Inc. (VOYA)||4,700||238|
|Solar Capital Ltd. (SLRC)||11,300||229|
|TPG Specialty Lending, Inc. (TSLX)||12,800||228|
|American Homes 4 Rent (AMH)||10,500||210|
|Artisan Partners Asset Management, Inc. (APAM)||6,,300||210|
|Redwood Trust, Inc. (RWT)||12,800||198|
|Santander Consumer USA Holdings, Inc. (SC)||10,000||164|
The following table presents the investor’s portfolio value for the five quarters starting from Q1 2017 to Q1 2016 and the top holdings in each quarter that outperform S&P 500.
|Period||Total portfolio value ($Mn)||Top holdings (ticker, % of IRR difference from S&P 500)|
|Q1 2017||726.61||Health Insurance Innovations, Inc. (HIIQ, 69.26), Opus Bank (OPB, 27.42), MGIC Investment Corp. (MTG, 16.76)|
|Q4 2016||673.43||Two Harbors Investment Corp. (TWO, 67.34), Tri Pointe Homes, Inc. (TPH, 36.85), First Bancshares, Inc. (The) (FBMS, 5.0)|
|Q3 2016||522.15||FB Financial Corporation (FBK, 71.04), Evans Bancorp, Inc. (EVBN, 41.95), Old Point Financial Corp. (OPOF, 40.82)|
|Q2 2016||504.45||FCB Financial Holdings, Inc. (FCB, 25.01), HomeStreet, Inc. (HMST, 23.48), Old National Bancorp (ONB, 22.24)|
|Q1 2016||504.68||Univest Corp. of Pennsylvania (UVSP, 18.05)|
Clearly, Health Insurance Innovations, Inc.; Two Harbors Investment Corp.; and FB Financial Corporation outperform S&P 500 by more than 50%.