Here's What This $5 Billion Hedge Fund Is 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 $4.9 billion in value as of September 30, 2012.
So what does Eton Park's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Nexen and call options on Viacom . Other new holdings of interest include automotive supplier Visteon and MedicisPharmaceutical . Visteon's shares got a boost recently when it announced a "shareholder value creation program ," which included plans to boost profits via cost-cutting. Its third-quarter revenue was below year-ago levels, but management was pleased nonetheless, considering the effect of weakness in Europe.
Eton Park was not the only one that decided to buy into dermatology specialist Medicis, as Valeant Pharmaceuticals sent shares up 38% on a single day in September, announcing plans to buy the whole company. Valeant's revenue has been growing robustly by double digits over the past few years, though earnings have not followed suit.
Among holdings in which Eton Park increased its stake was Cytec Industries , a chemicals and materials company that has surged more than 50% over the past year. The world's second-largest maker of carbon-fiber materials for airplanes has been focusing more on its core operations, recently selling off its coating resins business for more than a billion dollars. The company has upped its guidance for the rest of 2012, as well, and boosted its share buyback plans.
Eton Park reduced its stake in lots of companies, including eBay , which is up 68% over the past year. The company has been performing well, so the biggest knock against it might be its valuation. The company boasts not only a powerful online marketplace, but also electronic payments giant PayPal, with its 117 million active registered accounts, up 14% over year-ago levels. Its last quarter featured double-digit revenue and earnings growth.
Finally, Eton Park's biggest closed positions included Human Genome Sciences (bought by GlaxoSmithKline ) and Morgan Stanley . Other closed positions of interest include Irish women's health pharmaceutical company Warner Chilcott . The company offers a dividend yield above 4%, but it also has a primary drug, Actonel, that's weakening, though another one may take its place. Competition looms, though, and some see that dividend as threatened. While many doubt the company, its third-quarter earnings more than tripled.
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. Therefore, 13-F forms can be great places to find intriguing candidates for our portfolios.
Profiting from our increasingly global economy can be as easy as investing in your own backyard. Our free report, "3 American Companies Set to Dominate the World," shows you how. Click here to get your free copy before it's gone.
The article Here's What This $5 Billion Hedge Fund Is Buying originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of eBay. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend eBay and GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.