Capital Growth Takes New Stake in Toll Brothers, Sells Hertz

Kenneth Heebner’s Capital Growth Management LP took a new position in Toll Brothers Inc. last quarter after selling out of it in the previous period, while exiting a stake in Hertz Global Holdings Inc.

The Boston-based firm purchased 6.3 million shares, worth $203.3 million, in the largest U.S. luxury-home builder during the three months ended Sept. 30, according to a filing with the Securities and Exchange Commission released today. Heebner had sold out of his $21.6 million stake in Toll Brothers in the three months ended June 30.

The fund manager, who ranked as America’s No. 1 stock picker before the financial crisis snapped his winning streak, also took a stake in building-products maker Mohawk Industries Inc., worth $106.8 million at the end of September. He added 2.2 million shares to his position in Morgan Stanley (MS), the largest in his portfolio at $353 million.

Capital Growth sold 4.3 million shares of Hertz, which has rallied 47 percent this year, and 5.9 million shares of homebuilder PulteGroup Inc., according to the filing.

Toll accounted for 5.5 percent of the total market value of the firm’s holdings, according to data compiled by Bloomberg. The Horsham, Pennsylvania-based company agreed on Nov. 6 to buy Shapell Industries Inc.’s homebuilding business for about $1.6 billion, more than doubling the number of California lots it controls.

Heebner’s CGM Focus Fund (CGMFX) has returned 27 percent so far this year, beating half of its peers, according to data compiled by Bloomberg.

To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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