What The Smart Money Is Buying Today

Special Report

One of my regular activities in my search for opportunities is reading the 13F filings that are due at the SEC 45 days after the end of every quarter.

Knowing what other smart people are doing with their own and clients' cash has turned up some fantastic opportunities over the years and helped us avoid a few missteps along the way.

I have been reading 13Fs pretty much every quarter since the late 1980s and have learned something and gathered ideas worth further study pretty much every time.

One observation has held true of pretty much all of the more than 120 quarters' examination of the holdings of the nation's money management industry:

There is an enormous amount of money out there that is underperforming the market and paying a higher price for the privilege.

Almost all of those who do outperform the markets seem to be from either the deep value school or the momentum camp.

The superstars seem to mostly be value investors or trend (macro and price) types that use a fair amount of leverage.

Some first quarter 2025 observations:

A lot of the smartest money was buying high-quality high-yield debt and holding firm on stocks.

The top real estate players were buying apartments and casinos while holding firm on everything else.

There is a lot of smart money buying, including the private equity giants like Blackstone and Brookfield, in midstream energy assets.

Bank and financial buyers have been including some of the top-tier commercial mortgage REITs including Ladder Capital $LADR ( ▼ 0.65% ) , Rithm Capital $RITM ( ▼ 0.44% ) , and KKR Real Estate Finance Trust $KREF ( ▲ 0.32% ) .

Increasingly, it feels like although the more emotionally driven equity portion of certain markets will be somewhat volatile, commercial real estate related debt has bottomed out and the strong hands are going to see a huge winning streak get underway.

Seeing a trend follower like Campbell and Company buying AGNC makes me feel even better about owning the residential mortgage REITs.

The bank specialists and activists were not as I might have expected. Those that were buying were buying up some of our favorites.

There is a lot of very smart money from the leveraged finance side of the universe that has been buying shares of Magnera $MAGN ( ▼ 0.78% ) .

These are not household names that attract the attention of the Instant Experts of the Internet but small to midsize firms that are making tons of money for their investors.

You may have never heard of Magnera, but I will bet you dollars to donuts that you have some of their products in your house.

Magnera was created by a merger between Berry Global's Health, Hygiene and Specialties Global Nonwovens and Films business with Glatfelter Corporation late last year.

Magnera is a specialty materials company focused on nonwoven fabrics and engineered films. Think baby diapers, adult incontinence products, feminine care, surgical gowns, air filters, facemasks, wipes, teabag filters, even materials for batteries and agriculture. If it needs to be absorbent, breathable, or form-fitting and is used in bulk around the world, Magnera probably makes it.

Customers include some of the biggest consumer products companies in the world including Clorox, Procter & Gamble, Unilever, and Kimberly-Clark.

Debt was used to close the merger, and Magnera is considered to be a highly leveraged company.

The company produces an enormous amount of cash flow, and this should be a classic private equity style debt paydown growth story. The more debt the company pays off, the more the equity account grows. Debt paydown stories have made me a lot of money over the years, and this appears to have the same type of multi-bagger potential.

Looking into Magnera also caused me to stumble upon a newer firm founded by veterans of some of the most successful activist, private equity, and credit investing firms in the world today.

Irenic invests in public companies where they think they can work with management to unlock changes that build value for the investors in the company.

The firm has only been filing a 13F since 2022, so we only have a short track record, but they have been crushing the market in that time.

Irenic was very busy in the quarter and added some names worth a deeper look:

Couchbase $BASE ( ▼ 0.21% ) provides a high-performance NoSQL cloud database platform designed for enterprise applications requiring flexibility, scalability, and real-time responsiveness. The company is positioning itself to capitalize on digital transformation and edge computing trends, with growing adoption across retail, travel, and financial services.

SITE Centers $SITC ( ▼ 0.75% ) is a REIT focused on managing and redeveloping open-air shopping centers anchored by grocery stores and value retailers in affluent suburban markets. With a streamlined portfolio and emphasis on necessity-based retail, the company is benefiting from resilient tenant demand and low e-commerce disruption.

Aimco $AIV ( ▲ 0.72% ) is a real estate development and redevelopment company spun off from a former multifamily REIT, focusing on opportunistic and high-value urban apartment projects. The firm generates returns primarily through asset appreciation and capital recycling, rather than stabilized rental income, making it more of a real estate investment platform than a traditional REIT.

TriMas $TRS ( ▼ 0.33% ) is a diversified industrial manufacturer serving packaging, aerospace, and engineered components markets with a global footprint and a focus on niche products. The company emphasizes operational efficiency and bolt-on acquisitions to drive long-term earnings and cash flow growth.

TriMas has a defense business that just completed an acquisition of a German company that should see large gains from the increase in defense spending across Europe.

BATRK $BATRK ( ▼ 0.3% ) represents Liberty Media's tracking stock for the Atlanta Braves Major League Baseball franchise and associated real estate development around Truist Park. While tied to team performance and media rights, its valuation is increasingly supported by the underlying land development and growing sports franchise asset values.

Baseball and Real Estate. What is not to like?

Given the outstanding results and high-quality ideas we were able to discover in their portfolio, Irenic goes onto the list of must-read filings every quarter.