Here's What This Massive Money Manager 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 Columbia Wanger Asset Management, which sports an overall reportable portfolio valued at $21.1 billion as of June 30, 2012. Founded in 1992, it mainly serves other investment companies, as well as pension and profit-sharing plans. As a subsidiary of Ameriprise Financial, it manages mutual funds and tends to favor small-cap and mid-cap companies.
So what does Columbia Wanger's latest quarterly 13F filing tell us? Here are a few interesting details:
New holdings include Arcos Dorados (NYS: ARCO) , the largest franchisee of McDonald's restaurants in Latin America. Investors are drawn to it by its ability to grow more briskly than McDonald's with its presence in rapidly growing emerging markets. Still, it faces currency fluctuations, and growth in regions such as Brazil and Argentina has slowed lately -- though Mexico and other regions are picking up.
Among holdings in which Columbia Wanger increased its stake were Deckers Outdoor (NAS: DECK) and Cree (NAS: CREE) . Footwear company Deckers has seen its stock fall by about half over the past year, and it's very reliant on just one of its brands, Ugg, which generates more than 80% of its revenue. Still, it's maintained strong sales growth over the past year, and it's making a bold move by opening its own retail locations.
LED lighting specialist Cree is expanding in China and boosting its capacity, as well, leaving it well positioned to profit as LED lighting gains share from incandescent lighting. Still, with trailing and forward P/E ratios well above market averages, the stock isn't offering much margin of safety, even though its free cash flow has been improving. It has faced headwinds due to somewhat sluggish consumer demand for LED products in our weak economic environment, but that won't last forever. Analysts at JPMorgan Chase, for example, think long-term LED prospects are strong, especially for LED lighting.
Columbia Wanger reduced its stake in lots of companies, including Silver Wheaton (NYS: SLW) . Called "the most profitable company in the world," and sporting gross margins above 70%, the company is not simply mining silver like other companies, but instead buying discounted silver from miners and selling it at a profit. It has been hit by relatively low silver prices, but so have its peers. And with a lot of cash in the bank, it's in a position to make some lucrative deals.
Finally, Columbia Wanger unloaded several companies, such as health care information technology specialist Allscripts Healthcare Solutions (NAS: MDRX) . It lost out on some gains, though, as Allscripts popped some 24% recently, on reporting solid second-quarter results and upping its projections for the year. It has also been buying back shares aggressively, which boosts earnings per share -- though not in the most optimal way, via a rapidly growing business.
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. 13F forms can be great places to find intriguing candidates for our portfolios.
Arcos Dorados isn't the only south-of-the-border growth story. The Motley Fool has identified one top stock that could be considered the "Costco of Latin America." But hurry, because the free report is available only for a limited time.
The article Here's What This Massive Money Manager Has Been Buying originally appeared on Fool.com.LongtimeFool contributorSelena Maranjian,whom you canfollow on Twitter, owns shares of McDonald's and JPMorgan Chase, 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 McDonald's, JPMorgan Chase, and Arcos Dorados Holding.Motley Fool newsletter serviceshave recommended buying shares of McDonald's. 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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