Here's What Eminence Capital Is Buying and Selling
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 the Eminence Capital hedge fund company, with a stock portfolio valued at about $3 billion as of Dec. 31, 2011. The portfolio's top holdings, representing 21% of its value, are Novellus Systems, Google, and CME Group.
So what does Eminence's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include MAKO Surgical (NAS: MAKO) and Qualcomm (NAS: QCOM) . MAKO's robotic surgical equipment business has been on a tear recently, with few signs of letting up. It recently posted revenue up 122% along with shrinking losses, and as new procedures are performed with its machines, new revenue streams will grow. Qualcomm is a more familiar name, raking in lots of money from the valuable patents it holds and profiting from its chips' presence in both iPhones and Android devices. It's been spending billions on research and development, and is poised to profit from growth in emerging markets, as well.
Among holdings in which Eminence increased its stake was NetApp (NAS: NTAP) , a specialist in network storage. Some think it can't compete well against much bigger rival EMC, but it's been growing more briskly than EMC. It's grabbing more market share, too, and can benefit as cloud computing grows.
Eminence reduced its stake in lots of companies, including paint giant Sherwin-Williams (NYS: SHW) . That move might be tied more to the stock's valuation than to the company's worth. Shares advanced more than 30% over the past year, after all. The company has been facing rising costs for its raw materials, and has been able to raise prices to compensate, but there's only so much that prices can be hiked without hurting the top line.
Finally, Eminence unloaded several companies, such as Oracle (NAS: ORCL) . Some Wall Street analysts have waxed negative on the company, pointing out its growing competition from the likes of SAP, salesforce.com, and even Amazon.com. Even my colleague Tim Beyers decided to sell, seeing Oracle threatened by competition in cloud computing. But Oracle still sports solid growth rates and massive cash generation.
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.
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At the time this article was published LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter, owns shares of Google, QUALCOMM, Amazon.com, and MAKO Surgical, 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 QUALCOMM, MAKO Surgical, EMC, CME Group, Amazon.com, Google, and Oracle.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com, salesforce.com, Sherwin-Williams, MAKO Surgical, and Google. A separateMotley Fool service has recommended shorting salesforce.com. Try any of our Foolish newsletter services free 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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