If it’s mid-November, it must be time once again for institutional money managers with assets of at least $100 million to update the Securities & Exchange Commission (SEC) on their stock holdings via Schedule 13F.
Back in August – the last time shareholders were required to update their holdings – I discussed David Einhorn’s increased position in hard disk drive manufacturer Seagate Technology (NYSE: STX). When I wrote the article, the stock was trading for $10.00 per share and now trades at $17.52, an astounding 75.2% gain in three months!
Whereas in the May to August quarter only two of the 16 stocks mentioned were winners, this quarter (August to November) 14 out of 16 stocks were winners. Half (8) outperformed the S&P 500’s comparable return of 12.5%. Besides Seagate, other big winners included Bill Ackman’s JC Penney (NYSE: JCP) (33.2%) and David Tepper’s Valero Energy (NYSE: VLO) (33.0%). The only two losers were both courtesy of David Tepper: Mosaic (NYSE: MOS) (-11.4%) and CVR Energy (NYSE: CVI) (-10.3%).
Just goes to show you that mindlessly piggybacking on anybody else’s picks without doing your own research is no sure-fire way to beat the market.
Nevertheless, these quarterly SEC filings are a gold mine of information as to what the smartest investors are buying and selling. A timely review of them can make you money. With that in mind, I thought I would vet the most recent set of SEC filings to see if there are any more hidden gems ready to make big moves.
I’m dumping David Tepper this time around because I can’t forgive him for handing us the only two losers. Replacing Tepper will be growth-fund manager Chuck Akre, who I wrote about in a two-part series last April.
I don’t list all transactions, just ones that I personally find noteworthy. If you also have a voyeuristic streak in you, read on.
1. Seth Klarman
|
Company |
Action |
% Change in Holding |
Average Price Per Share |
Comments |
|
Hewlett-Packard (NYSE: HPQ) |
Buy |
NEW |
$29.45 |
Has faith that new CEO Meg Whitman can turn things around. I’m glad that she decided to keep the PC division. |
|
BP plc (NYSE: BP) |
Buy |
149.8% |
$40.72 |
Continues to buy this troubled stock still suffering a hangover from the April 2010 BP oil spill. Company’s 23% return on equity is attractive and Klarman must feel further litigation risk is overblown. |
|
News Corp. Class B (NYSE: NWS) |
Buy |
NEW (already owned 21 million Class A shares) |
$16.49 |
Scandal-plagued media conglomerate owns some of the best brands in the world, including Dow Jones, Wall Street Journal, New York Post, and Fox TV channels. Very cheap, selling for a PEG ratio of 0.8. |
|
Genworth Financial Class A (NYSE: GNW) |
Buy |
NEW |
$7.26 |
Money-losing 2004 insurance spinoff from General Electric is even cheaper than News Corp. (0.2 PEG) based on forward estimated earnings. |
2. David Einhorn
|
Company |
Action |
% Change in Holding |
Average Price Per Share |
Comments |
|
Marvell Technology (NasdaqGS: MRVL) |
Buy |
NEW |
$14.19 |
Semiconductor company has no debt, $4 per share in cash, five-year annual earnings growth of 21%, and sells for a PEG ratio of 0.6. |
|
General Motors (NYSE: GM) |
Buy |
330.8% |
$25.39 |
Q3 earnings were a disappointment, but the company seized the throne of world’s largest automaker away from Toyota Motor. |
|
Market Vectors Gold Miners ETF (NYSE: GDX) |
Buy |
104.8% |
$60.21 |
Gold mining stocks do well when inflation is higher than U.S. Treasury rates (now). |
|
CBS Class B (NYSE: CBS) |
Buy |
NEW |
$25.10 |
Television network stocks generally do well during presidential election years (2012 is coming up) because of political ad spending. |
3. Bill Ackman
|
Company |
Action |
% Change in Holding |
Average Price Per Share |
Comments |
|
Canadian Pacific Railway (NYSE: CP) |
Buy |
NEW |
$61.90 |
Ackman may be trying to copy Warren Buffett’s success with Burlington Northern up in the great white north. Rail freight is cheaper than sending via trucks, which is important when energy prices are high. |
|
Beam (NYSE: BEAM) and Fortune Brands Home & Security (NYSE: FBHS) |
Buy |
21.2% |
$58.15 (combined price per share prior to Oct. spinoff) |
Fortune Brands, the maker of Jim Beam bourbon whiskey, changed its name to its namesake whiskey brand and spun off its home security division. |
|
Lowes Companies (NYSE: LOW) |
Buy |
NEW |
$20.77 |
This home improvement superstore is second sister to market leader Home Depot, but the stock is cheap and housing may be bottoming. |
|
J.C. Penney (NYSE: JCP) |
Buy |
10.9% |
$35.94 |
Apple veteran Ron Johnson took the reins of CEO on November 1st and may be the man to turn around this Texas-based retailer. |
4. Chuck Akre
|
Company |
Action |
% Change in Holding |
Average Price Per Share |
Comments |
|
Berkshire Hathaway Class B (NYSE: BRK-B) |
Buy |
129.1% |
$72.28 |
Now is a great time to be buying Warren Buffett’s insurance company. |
|
Markel (NYSE: MKL) |
Buy |
18.3% |
384.94 |
Virginia-based property & casualty (P&C) insurer that mimics the business model of Buffett’s Berkshire Hathaway. CIO Tom Gayner is a good investor. |
|
Bank of America (NYSE: BAC) |
Buy |
NEW |
$8.26 |
Does Akre realize that Buffett didn’t invest in the common stock?. |
|
Hartford Financial Services (NYSE: HIG) |
Buy |
NEW |
$20.40 |
1995 spinoff from ITT is another P&C insurer. Does Akre realize that David Tepper dumped his entire stake in the company? |
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