In May, billionaire Julian Robertson- well known as the founder of Tiger Management and mentor to several “Tiger Cubs” who have since become successful hedge fund managers themselves- filed his 13F for the first quarter of 2013 with the SEC. We track 13F filings from hundreds of hedge funds and notable investors such as Robertson, using the included information to help us develop investing strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year). It’s also interesting to look back at our database and see which stocks top managers added to their portfolio in the previous quarter, so that investors can do more research on any interesting stocks in this category. Read on for our quick take on Robertson’s five largest new positions from the 13F or see the full list of stocks he reported owning.
H&R Block, Inc. (NYSE:HRB) was the legendary investor’s largest new pick, with the filing disclosing ownership of about 850,000 shares. The tax preparation company is expected to report a large percentage increase in earnings per share for the fiscal quarter that ended in April (the fourth of its fiscal year). This is partly due to delayed tax filings from the previous quarter but analysts are also expecting significant organic growth. This would bring the trailing P/E multiple to 18. Billionaire- and Tiger Cub- Stephen Mandel’s Lone Pine Capital reported a position of 6.8 million shares as of the end of March (check out Mandel’s stock picks).
McGraw Hill Financial Inc (NYSE:MHFI) wasn’t the only financial information stock Robertson liked; he also bought about 390,000 shares of Moody’s Corporation (NYSE:MCO). After rising over 80% in the last year, Moody’s trades at 21 times trailing earnings. The company has been growing nicely, however: in the first quarter of 2013, revenue rose by 13% and while net margins did come down a bit Moody’s still experienced 9% growth on the bottom line. Warren Buffett’s Berkshire Hathaway had over $1.5 billion invested in Moody’s at the beginning of April, or over 28 million shares (research more stocks Buffett likes).
Robertson purchased over 190,000 shares of Monsanto Company (NYSE:MON) between January and March. The $57 billion market cap agricultural technology company delivered 23% net income growth in its most recent quarter compared to the same period in the previous fiscal year, and sales were up 15%. Markets have already priced in continued high growth, with a trailing earnings multiple of 23, but Monsanto Company (NYSE:MON) might still be worth investigating as a potential growth stock. Blue Ridge Capital– a hedge fund managed by another Tiger Cub, John Griffin- owned over 3 million shares according to its own 13F.
Dunkin Brands Group Inc (NASDAQ:DNKN), which is primarily known for its expanding coffee and donut shop but also owns Baskin-Robbins, rounds out our list of Robertson’s largest new picks. Recent financial results actually haven’t been that good, with earnings actually down a bit, yet investors are quite optimistic given the respective trailing and forward P/Es of 44 and 23. We would avoid the stock at least until business picks up enough to justify the current valuation. The stock is up nearly 50% from its levels shortly after its IPO almost two years ago.
Disclosure: I own no shares of any stocks mentioned in this article.
