Here's What This Winning Hedge Fund Company Has Bought and Sold
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 GMT Capital, a private investment company founded by Thomas Claugus in 1990 that manages several hedge funds and other accounts. Its reportable stock portfolio totaled $4.1 billion in value as of June 30. You don't generally grow that large without doing some things right. The company's Bay Resource Partners hedge fund was named one of the richest 100 in 2011, by Bloomberg. In its first 15 years, it averaged a 20% annual return, almost twice that of the S&P 500.
So what does GMT Capital's latest quarterly 13F filing tell us? Here are a few interesting details.
The biggest new holdings are priceline.com and MDC Partners. Other new holdings of interest include RF Micro Devices , which specializes in high-performance radio-frequency technology. Its revenue and earnings have been growing very rapidly, with its chips in Nokia, Samsung, and Apple devices, among others. Bulls are hopeful about phone-sale potential in India and China, but bears don't like some recent net income and free cash flow numbers in the red.
Among holdings in which GMT Capital increased its stake were Entropic Communications and Diana Shipping . Home entertainment semiconductor company Entropic saw its shares drop after it posted estimate-topping second-quarter earnings but offered disappointing guidance, because of some delays and slower-than-expected progress. The company is also trimming its workforce by 10%. On a more positive note, though, insiders have been snapping up shares lately.
Diana Shipping, along with its shipping peers, has been suffering through a period of soft demand, in part because of slowing growth in India and China. Despite that, though, it has been effectively working to keep its margins up, while investing in newer ships. Once the economic tide turns, the company is positioned for greater profitability. It has a lower debt burden than many rivals, too, giving it more flexibility.
GMT Capital reduced its stake in lots of companies, including contract electronics manufacturer Flextronics . The company recently acquired some plants from Google's Motorola division and is now Motorola's largest production partner. It's set to manufacture Google's new smartphone, the Moto X. The company also acquired automotive facilities, boosting its capabilities in that sector. In Flextronics' second quarter, both revenue and earnings pulled back a bit, in part due to softness in the telecom industry, but earnings still topped estimates.
Finally, GMT Capital's biggest closed positions included Life Technologies and Lazard. Other closed positions of interest include Corning . Corning's second quarter was solid, with core revenue and earnings rising by double digits. Its Gorilla Glass is selling well, and Corning's partnership with View and its tint-adjusting glass is promising. The company has doubled its dividend in less than three years, and it now yields 2.8%. Meanwhile, Corning has been buying back billions of dollars' worth of shares, which makes sense, as its stock is rather attractively priced, with a forward P/E near 10. Management recently touted the company's solid balance sheet, strong operating cash flow, competitive strength, and growth prospects.
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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The article Here's What This Winning Hedge Fund Company Has Bought and Sold originally appeared on Fool.com.Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter,owns shares of Apple, Google, Corning, and priceline.com. The Motley Fool recommends Apple, Corning, Google, and priceline.com and owns shares of Apple, Corning, Google, Lazard, and priceline.com. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.