Here's What These Slow-and-Steady $3 Billion Investors Are 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 money managers Douglas C. Lane & Associates, founded in 1994 and based in New York City. The firm devotes a high-profile section of its website to its unofficial mascot, the turtle, chosen for its willingness to stick its neck out and its perseverance, among other things. A profile in Barron's summarized its investment strategy by noting "the firm invests long-only, aims for low portfolio turnover and takes a long-term view -- typically three to five years -- of securities." Between 1994 and now, the money it manages for clients has grown from $300 million to more than $3 billion, which suggests that the firm is doing something right.
The company's reportable stock portfolio totaled $3 billion in value as of Dec. 31, 2013.
So, what does Douglas C. Lane's latest quarterly 13F filing tell us? Here are a few interesting details:
The biggest new holdings are Symantec Corporation and The Hain Celestial Group. Other new holdings of interest include Sirius XM Radio . Sirius XM Holdings recently posted its fourth-quarter results, pleasing many investors with a 12% revenue jump over year-ago levels -- revenue that crossed the $1 billion line for the first time. The company recently extended a contract with Nissan, is being included in 70% of new cars, and sees an even brighter future in used cars than in new ones. Bulls see paths to international expansion via streaming, while bears worry about competition from free and Internet radio services, such as Pandora.
Among holdings in which Douglas C. Lane & Associates increased its stake was Celgene Corporation . Celgene is a biotech company that has made many long-term investors wealthier, with its stock averaging annual growth of 31% over the past decade. It just posted impressive fourth-quarter results, with revenue up 21% over year-ago levels, thanks in large part to its anemia drug, Revlimid, which now contributes 65% of revenue. Its pancreatic-cancer-treating Abraxane has smaller sales, but they grew briskly. Celgene's future is bright, as it has a promising pipeline and has been investing in other companies' promising drugs, as well.
Douglas C. Lane & Associates reduced its stake in lots of companies, including Nokia Corporation and Altria Group . Finland-based Nokia has surged more than 70% over the past year, in which it sold its handset business to Microsoft. The company still boasts operations in mapping, networking, and more, along with lots of patents. After releasing mixed fourth-quarter results, management maintained optimism, with the chief of networking noting that "we are seeing excellent momentum in Greater China where we believe we are on track to become the leading foreign vendor."
Domestic tobacco titan Altria Group draws attention with its dividend yield of 5.5% and substantial free cash flow. But it's facing challenges from rising taxes, regulations, competition from discount cigarettes, a shrinking smoker base, and even counterfeit cigarettes. Bulls are hopeful about its move into electronic cigarettes -- one analyst even sees them eclipsing regular cigarettes within a decade -- but the FDA might regulate those, too. Altria's fourth-quarter results were disappointing, with Marlboro volume shrinking by 5.7% over year-earlier levels.
Finally, Douglas C. Lane's biggest closed positions included Colonial Properties Trust and Sysco Corporation. Other closed positions of interest include Regions Financial , which is a regional bank focused primarily in the Southeast that emerged from the recent financial crisis in relatively good shape, having repaid its TARP obligation back in 2012. Its fourth quarter was a bit mixed, with earnings down from year-ago levels but full-year earnings are up over the previous year, and loans rising, as well. Management says it's positioned well for long-term growth, and in a conference call pointed to growth in auto loans and the beefing up of its wealth-management division, among other things. Bulls are hopeful about Regions Financial's mobile banking ambitions. Regions tripled its dividend in early 2013, yields 1.2%, and has some expecting further significant increases.
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.
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The article Here's What These Slow-and-Steady $3 Billion Investors Are Buying originally appeared on Fool.com.Selena Maranjian owns shares of Celgene and Microsoft. The Motley Fool recommends Celgene, Hain Celestial, Pandora Media, and Sysco. The Motley Fool owns shares of Hain Celestial, Microsoft, and Sirius XM Radio. 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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