Here's What This $4 Billion 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 billionin value as of March 31, 2013. 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 Diana Shipping and Newport. Other new holdings of interest include energy concern Magnum Hunter Resources . The stock is has significant short interest, with many concerned about its significant debt and a delay in the filing of its year-end report (which is expected to be filed by the end of June). Meanwhile, the company has been shifting attention from low-priced natural gas toward oil and liquids, and is diversifying across several promising shale fields, such as the Utica.
Among holdings in which GMT Capital increased its stake was Canada-based uranium specialist Cameco . The company's business is expected to improve as gas and coal prices eventually rise, and also due to new nuclear plants being built. My colleague Sean Williams likes Cameco's transparency, expects higher uranium prices, and notes that China is also expected to demand more uranium over time. Some see the stock having a fair chance to appreciate substantially.
GMT Capital reduced its stake in lots of companies, including Corning , which has struggled in recent years, in part due to low prices and demand for LCD substrates. The stock has pulled back a bit from a 52-week high and sports a P/E ratio of 13. Some worry that Corning's acclaimed Gorilla Glass is threatened by growing interest in sapphire, while others argue that it's clearly a bargain at recent levels, with a forward P/E around 10 and a 2.6% dividend yield, to boot. It's worth noting its major presence in the fiber-optics world, too.
Finally, GMT Capital's biggest closed positions included Harris and NIIHoldings. Other closed positions of interest include Sequenom and QuestCor Pharmaceuticals . Sequenom, which makes molecular and genetic diagnostic tests, is a relatively small concern, with a market cap near $500 million. One of the company's tests checks for Down syndrome in a non-invasive manner, which should be of interest to many older women. Future tests might address conditions such as macular degeneration. Meanwhile, the company is expanding its reach abroad, but it's still posting widening losses along with strong revenue growth.
QuestCor is largely known for its multiple-sclerosis (MS) drug, Acthar, that has sold well in the past, and is being evaluated for many more indications. The stock yields 2.8%, and its dividend was hiked by 25% earlier this year. Questcor has its risks, though, such as an investigation into its marketing practices as well as competition. The stock is heavily shorted, but some see it as a bargain.
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. 13-F forms can be great places to find intriguing candidates for our portfolios.
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The article Here's What This $4 Billion 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 Corning. The Motley Fool recommends Corning and owns shares of it. 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.
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