Here's What This Huge Hedge Fund Has Been Buying
Every quarter, many money managers have to disclose what they've bought and sold, via 13F filings. Their latest moves can shine a bright light on smart stock picks.
Today let's look at one of the biggest hedge fund companies, Eton Park, founded by Eric Mindich in 2004. Mindich had spent 15 years at Goldman Sachs before that, becoming, at age 27, its youngest partner. Mindich invests in both long and short positions on stocks and in private equity investments, and specializes in merger arbitrage. He reportedly nearly tripled the value of Eton Park in its first seven years, but has posted some bumpy results lately, resulting in some shareholders pulling out.
The company's reportable stock portfolio totaled $7.9 billion in value as of March 31, 2012.
So what does Eton Park's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Cobalt International Energy (NYS: CIE) , an oil exploration company that has been quite volatile in the past year, surging some 53% in early February on promising results at an oil well. But, it then dropped 10% later that month on dilution concerns when the company announced plans to raise money by selling 47 million shares of stock, and then dropped more in April on allegations of wrongdoing. The folks at Eton Park must have a lot of confidence in this company that's been operating in the red for several years running.
Among holdings in which Eton Park increased its stake were E-Commerce Dangdang (NAS: DANG) and YPF Sociedad Anonima (NYS: YPF) . E-Commerce Dangdang claims to be China's largest online book seller, which puts visions of Amazonian greatness in many investors' eyes. On the plus side, it's serving a huge and growing Chinese population, but growth in China seems to be slowing, and Dangdang remains a small player facing some big competitors. It may not be the perfect stock, but after falling by more than half over the past year, some see it as attractive.
YPF Sociedad Anonima, meanwhile, down a whopping 75% over the past year, is an interesting case, as the Argentine government has nationalized the company. Formerly controlled by Spain's Repsol, YPF is a good example of how it can be risky and more complicated for us Americans to invest in some foreign companies.
Eton Park reduced its stake in lots of companies, including Dollar Tree (NAS: DLTR) . It's reasonable to consider selling it, since the stock has surged some 69% over the past year and with the recession finally inching behind us, consumers are will likely shift more of their attention from bargain-basement retailers to more mainstream ones. Bulls like its growing profit margins, but its stock isn't exactly at bargain-basement levels right now.
Finally, Eton Park unloaded several companies, such as Bank of America (NYS: BAC) . The beleaguered company is working on improving its condition by laying off tens of thousands of workers and paying down tens of billions in debt. A recent $3.5 million insider purchase reflects confidence from within the executive suites, but many shareholders remain unhappy, and some in Congress are looking to break up the too-big-to-fail banks.
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.
If you're in the market for some compelling banking stocks but don't like Bank of America, check out our special free report, "The Stocks Only the Smartest Investors Are Buying" -- it will introduce you to some promising financial enterprises.
At the time this article was published LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter, holds no position in any company mentioned.Click hereto see her holdings and a short bio. The Motley Fool owns shares of Bank of America Corporation. 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.