Tudor Investment Corporation, the brainchild of Paul Tudor Jones, is a Greenwich, Connecticut-based hedge fund that uses a mix of fundamental and quantitative analysis accompanied by a combination of the bottom-up and top-down stock picking approaches in managing its portfolio. Paul Tudor Jones has gained a reputation of one of the most successful traders in history and is also well-known as a reputable macro trader who attempts to make successful bets on macroeconomic changes in different economies. One of Jones’ most successful bets was the short strategy during the Black Monday of 1987, which allowed him to triple his money during the event. Despite the fact that Jones’ performance has diminished throughout the recent years as he started to invest more conservatively, he still remains one of the most successful traders ever. The latest 13F filing of Tudor Investment Corporation reveals that the value of the equity portfolio managed by Paul Tudor Jones is estimated at $3.13 billion, while his largest holdings are represented by Automatic Data Processing Inc. (NASDAQ:ADP), NCR Corporation (NYSE:NCR), Pfizer Inc. (NYSE:PFE) and Visa Inc. (NYSE:V).
Most investors can’t outperform the stock market by individually picking stocks because stock returns aren’t evenly distributed. A randomly picked stock has only a 35% to 45% chance (depending on the investment horizon) to outperform the market. There are a few exceptions, one of which is when it comes to purchases made by corporate insiders. Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012 and they have returned more than 144% over the ensuing 32 months, outperforming the S&P 500 Index by nearly 85 percentage points (read the details here). The trick is focusing only on the best small-cap stock picks of funds, not their large-cap stock picks which are extensively covered by analysts and followed by almost everybody.
Tudor Investment Corporation reported the acquisition of a 502,292-share stake in Automatic Data Processing Inc. (NASDAQ:ADP), which is valued at $43.02 million as of the end of the first quarter. The stock is up more than 3% since the beginning of the year as the company has been successful in delivering improvements to its cloud-based human capital management (HCM) platforms. Automatic Data Processing Inc. (NASDAQ:ADP) has a clear and defined goal of simplifying human resources by assisting organizations in managing their most essential asset – the people. The company has designed 30 apps that are currently functional and the number keeps growing, which signals that the company’s future performance looks relatively bright. In the meantime, Andy Brown’s Cedar Rock Capital remains bullish on Automatic Data Processing Inc. (NASDAQ:ADP), owning 4.48 million shares as of March 31.
Tudor Investment Corporation increased its stake in NCR Corporation (NYSE:NCR) by nearly 1.38 million shares to 1.43 million shares worth $42.28 million at the end of the quarter. Of late, NCR Corporation has cooperated with Wells Fargo & Company (NYSE:WFC) to design and create the first weatherized ATM for exterior walk-up environments. A global leader in consumer transaction technologies, NCR Corporation will indubitably benefit from this cooperation as Well Fargo, the American banking company, has already installed more 50 ATM units in California. NCR Corporation’s shares inched up by 2.80% year-to-date, although over the last 52 weeks it declined by more than 8%. Activist investor Richard “Mick” McGuire’s Marcato Capital Management holds around 10.85 million shares of NCR as of the end of March and last year he was nominated to the company’s board of directors.
Paul Tudor Jones’ hedge fund also increased its stake in Pfizer Inc. (NYSE:PFE) by 753,085 shares to 1.14 million shares valued at $39.61 million. Despite the fact that the stock has increased by slightly more than 10% since the beginning of 2015, it still has more room to run as the company is stipulated to make new acquisitions that would assist in maintaining its growth levels. Recently, the company announced the acquisition of Hospira Inc. (NYSE:HSP) for $17 billion, which will help them enhance the future profit and sales figures as well as increase the savings from resulting synergies. Moreover, analysts have been speculating that Pfizer is looking for new targets even though the company is still in the process of acquiring Hospira. Meanwhile, Kahn Brothers, co-founded by the late Irving Kahn, is one of the many hedge funds that still remain bullish on Pfizer Inc. (NYSE:PFE).
The latest 13F filing also reveals that Tudor Investment Corporation has initiated a long position in Visa Inc. (NYSE:V) during the January-March period. The hedge fund acquired 534,640 shares worth $34.97 million. Just recently, Visa, which is one of FIFA’s biggest sponsors, declared that the company intends to withdraw its funding and put an end to its agreement with FIFA as the soccer organization’s recent corruption scandal spurred. Thus, Visa’s announcement may result in increased brand image as the message surely conveys the fact that this company fights fearlessly against all forms of injustice and corruption. Visa’s stock is up by more than 6% in 2015 and the recent corruption scandal at FIFA did not hurt the stock at all as it seized a strong uptrend lately. Ken Fisher’s Fisher Asset Management, currently the largest shareholder of Visa Inc. (NYSE: V) among the funds we track, increased its already substantial holding to 14.32 million shares held as of the end of March.
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