AQR Capital Management is an investment management firm founded in 1998 by former Goldman Sachs portfolio manager Clifford Asness along with partners David Kabiller, John Liew, and Robert Krail. According to its website, it has over $90.2 billion in assets under management (as of September 30, 2013) for institutional investors, including pensions, insurance companies, endowments, foundations, and sovereign wealth funds, as well as registered investment advisors. The company is based in Greenwich, Connecticut.
Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).
The firm started new positions in Twenty-First Century Fox (FOXA) and Mako Surgical Corp (MAKO) and sold positions in Aeropostale Inc. (ARO), Greenhill & Co. Inc. (GHL), PBF Energy Inc. (PBF), and Ebix Inc. (EBIX).
Why buy Twenty-First Century Fox (FOXA)?
Overall, the company performed very well this quarter, and it could still have potential upside in 2Q14. It said it saw strong revenues across all of its businesses despite making significant investments in its channels businesses, and facing headwinds in the form of unfavorable foreign currency movements and challenging film comparison in terms of last year’s success Ice Age: Continental Drift.
Twenty-First Century Fox reported Q1 2014 revenue of $7.1 billion—up 18% year-over-year, and EBITDA of $1.62 billion—up 2% year-over-year. The performance was driven by its four divisions, Television, DBS Television, Cable Networks, and Filmed Entertainment. Television reported revenue of $1.05 billion, up 8% year-over-year. DBS Television reported revenue of $1.4 billion, up 68% year-over-year. Cable Networks reported revenue of $2.8 billion, up 12% year-over-year. Finally, Filmed Entertainment reported revenue of $2.12 billion, up 9% year-over-year.
In terms of EBITDA, Television reported $231 million (up 30% year-over-year), DBS Television reported $190 million (up 100% year-over-year), Cable Networks reported $991 million (down 2% year-over-year), and Filmed Entertainment reported $330 million (down 24% year-over-year).
Specifically, Fox’s new sports channel on cable helped the Cable Network Results, driving affiliate revenues higher. Plus, The Wolverine, which grossed $400 million globally, and The Heat, which grossed $230 million globally, made the quarter for Filmed Entertainment.
AQR manages a wide array of investments, spanning from aggressive high-volatility market-neutral hedge funds to benchmark-driven traditional equity funds. It makes investment decisions across all funds using a series of global asset allocation, arbitrage, and security selection models and implements them using proprietary trading and risk-management systems. Both the traditional benchmark and market-neutral strategies are managed by the same portfolio teams and driven by the same underlying research. The firm began with a quantitative equity hedge fund and today offers a variety of quantitatively driven hedge fund and traditional investment vehicles to both institutional clients and financial advisors.