Every quarter, fund managers have to disclose what they've bought and sold. Their latest moves can shine a bright light on smart stock picks.
Today let's look at investment management company Avenir. Founded in 1980 and based in Washington, D.C., it oversees accounts for families, individuals, and trusts and also for institutions, foundations, and retirement plans. The investors there seek a margin of safety in their investments, and eat their own cooking, putting their money where their mouths are.
Why should you look at Avenir's moves? Well, according to TickerSpy, Avenir has outperformed the S&P by more than 20 percentage points since the middle of 2007.
Avenir's stock portfolio totaled $637 million in value as of December 31, 2011. The fund's top holdings, representing about a quarter of the portfolio's value, are American Tower, Pioneer Natural Resources, and CarMax.
So what does Avenir's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Antares Pharma (ASE: AIS) and Sprint (NYS: S) . Antares is intriguing as it's a different kind of biotech company, developing drug delivery systems that can work with a wide range of drugs. It's also growing its revenue and has much potential. On the other hand, it's still a small penny stock, and not yet profitable. Sprint is more well known, though many are wary of it. Indeed, my colleague Tim Beyers recommends shorting it, due to rising debt, falling profit margins, and executive actions that smack of desperation. It has also fallen into penny-stock territory.
Among holdings in which Avenir increased its stake was Frontier Communications (NAS: FTR) -- yes, another penny stock. This one has seen its share price get clobbered in the past year, and cut back its once insanely high dividend yield (above 16%) to a recent still-heady 9%. Still, to some it now appears to be a bargain, posting eight years of consecutive profits and strong cash flow. Frontier bought some of Verizon's rural network, and has been alarming many customers with big price hikes.
Meanwhile, Avenir reduced its stake in Clearwire (NAS: CLWR) and Brookfield Infrastructure Partners L.P. (NYS: BIP) . Clearwire, specializing in 4G wireless broadband and partnered with Sprint, has been sold short by many investors who see significant cash burn, plenty of debt, and a dearth of profits. (Wall Street has been more bullish on the company, though.) Google is selling its stake in Clearwire, and the company has recently lost some major wholesale customers in Time Warner Cable and Comcast.
Brookfield seems much more appealing, encompassing a diverse range of infrastructure properties such as port terminals, timber, power plants, coal terminals, and so on. These are generally defensive, too, because people are not going to use much less electricity from year to year. The stock may not be vastly undervalued right now, but it does offer a dividend yield near 5%.
Finally, Avenir unloaded several companies completely, such as KEYW Holding and Reddy Ice Holdings. Reddy is a tiny Texas company in the packaged ice business. KEYW, much bigger at a market cap near $200 million, is still small, and specializes in cyber security.
We should never blindly copy any investor's moves, no matter how talented the investor. But it can be useful to keep an eye on what smart folks are doing. 13-F forms can be great places to find intriguing candidates for our portfolios.
If hefty dividend payers like Brookfield or Frontier appeal to you, check out our free special report, Secure Your Future With 9 Rock-Solid Dividend Stocks to learn about a bunch of compelling companies that can plump up your portfolio while helping you sleep at night.
At the time thisarticle was published LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter here, owns shares of Verizon Communications and Google, but she holds no other position in any company mentioned.Click hereto see her holdings and a short bio. The Motley Fool owns shares of Google and Brookfield Infrastructure Partners.Motley Fool newsletter serviceshave recommended buying shares of Google, American Tower, and Brookfield Infrastructure Partners. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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