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Kenneth Heebner Buys Goldman Sachs, Hertz; Sells BofA, Herbalife

Kenneth Heebner, who once ranked as America’s No. 1 stock picker, took new positions in Goldman Sachs Group Inc. and Hertz Global Holdings Inc., while selling out of Bank of America Corp. and Herbalife Ltd.

Heebner’s Capital Growth Management LP purchased 843,000 shares of Goldman Sachs during the first quarter, based on a filing with the Securities and Exchange Commission. The money manager bought 4.9 million shares of auto-rental chain Hertz Global. Capital Growth sold $152.1 million of Bank of America shares and $110.2 million of Herbalife, a marketer of nutritional supplements, in the three months ended March 31.

Heebner’s CGM Focus Fund topped all diversified U.S. stock mutual funds in the decade through 2007 and has returned 22 percent this year, beating 99 percent of its peers, according to data compiled by Bloomberg. The Boston-based fund’s assets plunged to $1.5 billion at the end of October from the June 2008 peak of $10.3 billion, as it lost an annual 8.9 percent in the past five years, the data show.

Goldman Sachs has surged 22 percent this year compared with the 16 percent gain in the Standard & Poor’s 500 Index. The Wall Street bank, which generates the highest percentage of sales from trading, reported last month that revenue from that business fell more than its rivals during the first quarter.

Bank of America, the second-largest U.S. lender by revenue, has climbed 16 percent in 2013. The Charlotte, North Carolina-based company said in April mortgage banking and trading marred first-quarter results and slowed the company’s turnaround.

Hertz, the largest publicly traded U.S. rental-car operator, is awaiting U.S. antitrust approval for its acquisition of Dollar Thrifty Automotive Group. Shares have surged 54 percent this year.

Heebner’s firm added to its stake in Herbalife in the fourth quarter when shares plunged 31 percent after hedge-fund manager Bill Ackman accused the company of operating a pyramid scheme. Herbalife has surged 37 percent in 2013.

Capital Growth also exited positions in Ford Motor Co. and Foot Locker Inc. during the first quarter. The firm also bought homebuilder NVR Inc. and BlackRock Inc., the world’s largest asset manager. While Heebner’s firm remained bullish on housing stocks, with Lennar Corp. and DR Horton Inc. among the five biggest holdings, the biggest decreases in market value was to PulteGroup Inc., the largest U.S. homebuilder by revenue.

The money manager’s stake in financial companies remained the biggest allocation out of 10 industries. Citigroup Inc. and Morgan Stanley remained the firm’s two largest holdings, accounting for 6 percent and 5.8 percent of its investments, respectively. The firm also boosted its ownership of industrial and energy shares, while trimming holdings of consumer discretionary and staples stocks.

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