Here's What This Big Gainer Is Buying

Every quarter, many money 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 Kleinheinz Capital Partners, founded in 1996 by John Kleinheinz. Kleinheinz considers himself a contrarian, opportunistic, and value-oriented investor, and is most savvy about the telecom, health care, and energy industries. Kleinheinz has reportedly averaged 22% annual gains since 1996, which is a strong performance.

Kleinheinz Capital's stock portfolio totaled about $1.43 billion in value as of Dec. 31, 2011. Its top three holdings, representing about 28% of the portfolio's overall value, were Apple, Google, and Monsanto.

Interesting developments
So what does Kleinheinz Capital's latest quarterly 13F filing tell us? Here are a few interesting details:

New holdings include Level 3 Communications (NAS: LVLT) . The company has struggled in recent years, and many are waiting to see how well it digests Global Crossing. The acquisition was made with the expectation of great cost savings, but they haven't materialized quite yet. In the meantime, gross margins have been growing, but the company still features a lot of red numbers in its results and many have low expectations.

Among holdings in which Kleinheinz Capital increased its stake were Sirius XM Radio (NAS: SIRI) and oil exploration concern Hyperdynamics (NYS: HDY) . Sirius has seen its revenue growth slow, but its profitability and cash flow have been growing well, and it sports a subscribership well above 20 million. Some think that a deep-pocketed tech company will buy Sirius, but my colleague Rick Munarriz doubts that. He also notes that Sirius is moving into used cars, which may not be as lucrative as new ones, but is still a worthwhile move.

Hyperdynamics sports a very dynamic stock, which can react strongly to news. It recently plunged more than 25% on news that a well was found to be nearly dry. The folks at Kleinheinz are clearly bullish on the company, but others are skittish about its rising costs and the dilutive effect of additional stock offerings.

Kleinheinz Capital reduced its stake in a lot of companies, including Research In Motion (NAS: RIMM) . The once-successful maker of the BlackBerry smartphone has fallen on hard times and tough competition, with some speculating that it may go out of business. The BlackBerry used to be the standard in the business world, but competitors have been aggressively tackling that segment.

Finally, Kleinheinz Capital unloaded several companies entirely, such as Chinese search engine specialist (NAS: BIDU) . Its future seems promising, though, especially since Google has not become dominant in China, and Baidu is rolling out cloud storage and applications to consumers.

If the rapid growth in cloud computing has you intrigued, check out our special free report, "The Next Trillion Dollar Revolution," to meet a company involved in the cloud and poised to profit handsomely from the smartphone revolution.

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, and 13-F forms can be great places to find intriguing candidates for our portfolios.

At the time thisarticle was published LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter, owns shares of Apple 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 Apple and Google.Motley Fool newsletter serviceshave recommended buying shares of Apple, Google, and Baidu, as well as creating a bull call spread position in Apple and a synthetic long position in Monsanto. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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