This Fund’s Picks Returned 52% In Q1 And You’ve Never Heard Of It

Phongphan/Shutterstock.com

Phongphan/Shutterstock.com

Kite Pharma Inc. (Nasdaq: KITE)

Wildcat Capital is heavily invested in Kite Pharma Inc., which accounts for the bulk of its Q1 success. Kite Pharma’s shares gained 75.04% in the quarter, pushing the value of Wildcat Capital’s position in it to over $185 million. However, in a show of confidence in the stock, the hedge fund did not sell off a single share of it during the period, as it continued to hold 2.36 million shares, even as its 13F portfolio’s exposure to the stock climbed above 58%, an increase of 10 percentage points quarter-over-quarter.

Kite Pharma Inc. shares gradually trended up further in the second quarter until the May 8 revelation that a patient enrolled in the company’s trial of its CAR-T therapy KTE-C19 had died. Despite the fact that the deceased patient was suffering from an aggressive disease and was in poor health before being administered the treatment, the markets reacted harshly to the news, sending shares down by 13% on May 8, and they’ve recovered only slightly since. That creates a potential buying opportunity on weakness, as analysts almost unanimously expressed that the death is unlikely to affect the treatment’s approval. Kite Pharma CEO Arie Beldegrun bought 17,000 shares later that day, and several other insiders followed suit to take advantage of the weakness and show their confidence in the stock and treatment.

CoStar Group Inc. (Nasdaq: CSGP)

Wildcat Capital’s CoStar Group Inc. position also had a strong first-quarter and that has continued and even accelerated in the second-quarter, with shares now being up by 36% year-to-date. Solid first-quarter results and upgraded fiscal 2017 guidance released in late-April led to a surge in the stock.

CoStar Group Inc. announced the acquisition of Landwatch.com for an undisclosed amount earlier this month, after entering into an agreement to buy the rural real estate sales platform in early-April. CoStar Group expects the acquisition to be accretive to the tune of $0.02 in non-GAAP EPS in 2017. Landwatch.com will continue to operate as a standalone site, while its 1.4 million listings will also be distributed to some of CoStar Group’s other relevant sites like Land.com. CoStar Group has built a network of sites that pulls in 7.1 million visitors monthly and plans to build on it further with additional acquisitions in the future.

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