13F Filings: Superstar Investor Buys and Sells

August 28th, 2015
in contributors

Investing Daily Article of the Week

by Chad Fraser, Investing Daily

In investing-as in any pursuit-it pays to keep an eye on what the best players are up to, particularly in tough conditions like we're facing today.

Follow up:

Luckily, we have an easy way to peer into the portfolios of some of the investing world's leading gurus: their 13F filings.

If you're not familiar, Form 13F is how institutional money managers with at least $100 million of assets disclose their stock holdings to the Securities & Exchange Commission. They must turn over this information to the SEC within 45 days of quarter-end. The deadline for the latest round, reflecting holdings as of the end of the second quarter of 2015, fell on August 14.

Aside from being a good source of investment ideas, these 13F filings also give us a chance to stack these investment pros up against one another to see how their picks compare.

On June 3, after these investors last updated their holdings (as of the end of the second quarter of 2015), we highlighted four picks from each of four different investment gurus-Seth Klarman, David Einhorn, Daniel Loeb and Julian Robertson, for a total of 16 buys and sells.

Here's how they've performed since (figures current as of last night's close):

Of the 16 stocks highlighted in our June article, six (37.5%) made a profit (a sold stock is considered profitable if it went down in price). Making a profit is different from outperforming a stock index, however. Of the 10 stocks our gurus bought, just three (30.0%) came out ahead of the S&P 500's comparable loss of 11.7%.

Of the six stocks sold, five (83.3%) underperformed the index, making the gurus better bears than bulls this time around.

"Buy" picks that have kept ahead of the benchmark's plunge included Daniel Loeb's Mohawk Industries, Inc. (NYSE: MHK) (-0.15%), Seth Klarman's Atara Biopharmaceuticals (NYSE: ATRA) (-2.1%) and Julian Robertson's Allergan plc (NYSE: AGN) (-3.8%).

On the sell side, Klarman dodged an 18.0% loss by getting out of Syneron Medical (NasdaqGS: ELOS), and Einhorn likely doesn't regret cutting his stake in Marvell Technologies Corp. (NasdaqGS: MRVL), which fell 26.0%. Loeb's move out of Alibaba Group Holding (NYSE: BABA) was also prudent, as the stock has fallen 24.4% since.

In contrast, Klarman's increased stake in SunEdison Semiconductor Ltd. (NasdaqGS: SEMI) was a big mistake: it plunged 48.9%. Robertson also sharply increased his position in Cirrus Logic, Inc. (NasdaqGS: CRUS), which went on to fall 27.4%.

When you add it all up, none of our contenders deserve much praise for their Q2 moves, with Einhorn, Klarman and Loeb tied at two winning trades out of four, while Robertson had just one (winning trades being buys that outperformed the S&P 500 or sells that went on to be outpaced by the benchmark index).

Just goes to show you how important it is to do your own research and not merely piggyback on anybody else's picks.

You should also keep in mind that these 13F filings are usually out of date by the time they're released and likely don't paint an up-to-the-minute picture of each investor's holdings.

Still, they remain a useful source of information on what the smartest investors are buying and selling. A timely review of them can make you money.

With that in mind, I've gone through the latest picks from the just-released 13F filings of Klarman, Einhorn, Loeb and Robertson. Note that the following isn't a full account of these gurus' transactions, just a few that stand out.

1. Seth Klarman, Baupost Group

Company Action % Change in Holding Average Price Per Share Comments
Frontier Communications Corp. (NasdaqGS: FTR) Buy NEW $6.03 The telco raised its dividend by 5% earlier this year after cutting it twice since 2010. In February, it announced that it would buy Verizon's wireline operations in California, Florida and Texas in a $10.5-billion deal. If regulators approve, it will likely close by mid-2016.
Alon USA Partners LP (NYSE: ALDW) Sell -34%
$19.79
Klarman takes profits as the refiner's stock posts a 36% jump since the end of Q4 2014, when he made his initial investment.
Antero Resources Corp. (NYSE: AR) Sell -14% $34.87 Baupost initiated its position in the shale driller in Q3 2014 and added to it in the two following quarters before pulling back in Q2. Other shale names in the portfolio include Pioneer Natural Resources (increased this quarter) and a new position in Sanchez Energy.
Veritiv Corp. (NYSE: VRTV) Buy +9% $36.46 Klarman bets on a continued US economic rebound by adding to his Veritiv stake for the first time since initiating it in Q3 2014: the company delivers packaging, printing and other supplies to North American businesses.

2. David Einhorn, Greenlight Capital

Company Action % Change in Holding Average Price Per Share Comments
Michael Kors Holdings Ltd. (NYSE: KORS) Buy NEW $53.06 Einhorn bets on a recovery for the fashion retailer, whose shares have plunged 48% year-to-date-though it did turn in a strong performance during Tuesday's rocky session, rising 3.5% on the day, compared to a 1.3% decline for the S&P 500.
Conn's, Inc. (NasdaqGS: CONN) Sell -100% $35.04 Greenlight took its initial stake in the southern furniture and appliance retailer in Q1 2014. Since then, it has fallen as low as $16 before rebounding back above Einhorn's original average purchase price in Q2.
Bank of New York Mellon Corp. (NYSE: BK) Buy +1,109% $41.10 Greenlight boosts its BNY Mellon holding as another hedge fund (and BNY Mellon investor), Marcato Capital Management, says the bank has 10,000 too many employees and calls for a shakeup.
Marvell Technology Group (NasdaqGS: MRVL) Sell -100% $13.92 After chopping his Marvell position by 61% in Q1, Einhorn finishes the job in Q2.

3. Julian Robertson: Tiger Management

Company

Action

% Change in Holding

Average Price Per Share

Comments

Facebook Inc. (NasdaqGS: FB)

Buy

+39%

$84.13

The social network is another stock that held fast during Tuesday's session, rising 1.1%. Fellow tech giant Apple also showed a 0.6% gain.

Baidu Inc. (NasdaqGS: BIDU)

Sell

-100%

$204.61

Robertson exits the Chinese search engine ahead of a 15% plunge in the share price on July 27 following a disappointing earnings report.

Macquarie Infrastructure Corp. (NYSE: MIC)

Buy

NEW

$82.58

Macquarie is a midcap that owns, operates or invests in businesses ranging from natural gas distribution to airport services and solar farms. It has also held up well over the last two days, slipping 3.4%, compared to a 5.3% drop for the S&P 500. It yields 6.07%.

Alnylam Pharmaceuticals, Inc. (NasdaqGS: ALNY)

Sell

-100%

$111.82

Alnylam develops treatments using RNAi therapeutics, which aim to treat diseases by suppressing certain genes. It was Tiger's 14th-biggest holding, at 2.8% of the portfolio.

4. Daniel Loeb: Third Point, LLC

Company

Action

% Change in Holding

Average Price Per Share

Comments

Baxter International Inc. (NYSE: BAX)

Buy

NEW

$37.19

Medical device maker Baxter completed the spinoff of its pharmaceutical subsidiary, called Baxalta Inc. (NYSE: BXLT), on July 1.

Ally Financial (NYSE: ALLY)

Sell

-61%

$21.72

Loeb has been steadily reducing his stake in Ally, GM's former financing arm, since taking an initial position in Q2 2014, when it was his second-biggest holding.

T-Mobile US Inc. (NYSE: TMUS)

Buy

NEW

$35.27

Third Point reinvests in the wireless provider after selling out in Q3 2014. Rumors continue to swirl about a possible takeover by Comcast.

Sealed Air Corp. (NYSE: SEE)

Buy

NEW

$48.38

The maker of packaging for food and consumer goods recently reported adjusted earnings that topped analysts' expectations and increased its full-year earnings guidance to $2.24 to $2.28 a share, up from $2.11 to $2.18.

4 Stocks Buffett Would Love to Buy ... But Can't!

Make no mistake, the Oracle of Omaha wishes he could get his hands on these four stocks, but he can't ... because he's too rich.

That's because these hidden gems are undervalued small caps, and even if Buffett bought every single share and these stocks doubled, it still wouldn't be enough to move the needle on Berkshire Hathaway's performance.

That's too bad for him-but it's great news for average investors like you and me.









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