Charter Oak Partners Management is a fundamentally driven Long/Short hedge fund that focuses mainly on equity investments. It was founded by Jerrold N. Fine in 1976 and is based in Westport, Connecticut. Fine started his career as a research analyst for Dominick & Dominick. After three years with the firm, Fine quit to become Founder and Managing Partner of Steinhardt, Fine, Berkowitz & Company. He resigned 9 years later to found the investment firm he is running now. Fene is a graduate of the Wharton School of the University of Pennsylvania and holds a B.Sc. degree in Finance. He targets mainly small and middle-market companies and focuses on the following industries: health care, chemicals, consumer products, and industrial manufacturing.
In the latest 13F filing with the Securities and Exchange, Charter Oak has revealed its equity portfolio, with energy, pharmaceutical and insurance companies occupying some of the top positions. Among them are Occidental Petroleum Corporation (NYSE:OXY), Mylan Inc (NASDAQ:MYL) and others. Let’s take a look at Mr. Fine’s top stock picks and the financials behind these companies.
Energy Companies
Top dog is Occidental Petroleum Corporation (NYSE:OXY), with Fine making only a minor adjustment during the previous quarter: 577 shares were disposed of, leaving Charter Oak with roughly 170,900 shares valued at $16.2 million. Occidental Petroleum has a market cap of $74.9 billion and pays an annual dividend of $2.64, which represents a yield of 2.8%. The stock is traded at a trailing Price to Earnings (P/E) ratio of 12.xx, significantly lower than the industry average of 26.80. For the three months ending December 31, 2013, the company posted revenues of $6.19 billion and earnings per share (EPS) of $2.54. Analysts expect Occidental Petroleum to register $6.12 billion in revenues and earnings of $1.72 for the current quarter.
Another energy company among Fine’s top stop picks is Southwestern Energy Company (NYSE:SWN). At the end of 2013 fourth quarter, Charter Oak reported the ownership of approximately 155,400 shares worth $6.11 million. Ken Griffin is, on the other hand, very bullish on this stock with his fund, Citadel Investment Group, reporting a 195% increase in its sake for the same period. Southwestern Energy has a market cap of $16 billion and does not pay a dividend. The stock has been in an uptrend since June 2012 and has made significant progress since the start of 2014: up 16% to a current price of $45.50 per share. For the 2013 fourth quarter, the company announced revenues of $907 million and $0.41 in earnings per share. Current quarter is expected to bring $949 million in revenues and EPS of $0.58. The stock is mainly touted as a Hold.
Pharmaceuticals
Mylan Inc (NASDAQ:MYL) is Charter Oak’s second biggest position and is a pharmaceutical company with global presence. Fine reduced his fund’s stake by just 682 shares during the previous quarter, leaving it with around 231,300 shares valued at a little over $10 million. The billionaire hedge fund manager, John Paulson is also keeping an eye on this stock with his fund, Paulson & Co, owning more than 12 million shares valued at $526 million. Mylan has a market cap of $18.6 billion and does not pay a dividend. For the three months ending December 31, 2013, the company posted $1.8 billion in revenues and earnings of $0.62 per share. Current quarter is expected to bring revenues of $1.82 billion and EPS of $0.69. The stock is traded at a P/E ratio of 31.xx, lower than the industry average of 48.70.
Another pharmaceutical company in Fein’s equity portfolio is Express Scripts Holding Company (NASDAQ:ESRX). In its latest 13F filing, Charter Oak reported the ownership of over 123,200 shares valued at $8.65 million. The company has a market cap of $58.6 billion and does not pay a dividend. The stock trades at a P/E ratio of 33.xx, significantly higher than the industry average of 17.00. The stock has been in an uptrend since the start of the previous decade and has recently reached an all time high of $79.37 per share. Although it has entered a correction, the stock has still advanced 7.8% so far this year. For the previous quarter, Express Scripts Holding Company announced revenues of $25.8 billion and earnings of $1.12 per share. Analysts expect the company to register $23.8 billion in revenues and EPS of $1.01 for the 2014 first quarter.
Insurance
Last but not least is Metlife Inc (NYSE:MET), an insurance company with a presence in over 50 countries around the world. Fine reduced his fund’s exposure to this stock last quarter by 354 shares. As a result, Charter Oak is left with nearly 124,000 shares reportedly worth $6.68. Ken Griffin is particularly bullish on this stock with his fund, Citadel Investment Group, increasing its stake by 247% during the 2013 fourth quarter. Metlife has a market cap of $60.3 billion and pays an annual dividend of $1.1 per share, which transforms into a yield of 2%. Although the stock has been in an uptrend, at the beginning of 2014 it has registered a significant correction, but the price has inched higher and is close to the start-of-the-year value. Shares are trading at $53.74 apiece, giving the stock a P/E ratio of 18.54. For the last quarter of 2013, the company posted revenues of $18.4 billion and EPS of $0.77. Metlife is expected to announce $17.7 billion in revenues and earnings of $1.41 for the current quarter.
Disclosure: none.
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