Sandy Nairn’s Edinburgh Partners has filed its 13F with the SEC for the reporting period of June 30, 2015. At Insider Monkey, we keep an eye out for major changes in the public equity portfolios of hedge fund managers. Mr. Nairn has an equity portfolio valued at $907.33 million as of the end of the second quarter, with his primary investment sector being information technology and consumer discretionary. During the second quarter, Edinburgh Partners trimmed many of its top positions (nine out of its top ten positions as of June 30 were reduced during the previous quarter, and those positions accounted for 95% of the fund’s portfolio), including Carnival Corp (NYSE:CCL) and Microsoft Corporation (NASDAQ:MSFT), which happened to be two of his better performing stocks last quarter. The fund manager initiated two new stock positions during the second quarter in PerkinElmer, Inc. (NYSE:PKI) and Allergan PLC (NYSE:AGN). The fund manager has struggled in 2015 according to our returns metric, particularly in the second quarter. His 37 long positions as of March 31 in stocks with a market cap of $1 billion or more, delivered a weighted average returns loss of 2.6%. For the first half of the year, that figure stands at a loss of 3.3%. It should be noted that these calculations exclude bonds and options, and positions in micro- or nano-cap companies, so the actual returns may be very different from our approximations.
We don’t just track the latest moves of funds. We are, in fact, more interested in their 13F filings, which we use to determine the top 15 small-cap stocks held by the funds we track. We gather and share this information based on 16 years of research, with backtests for the period between 1999 and 2012 and forward testing for the last 2.5 years. The results of our analysis show that these 15 most popular small-cap picks have a great potential to outperform the market, beating the S&P 500 Total Return Index by nearly one percentage point per month in backtests. Moreover, since the beginning of forward testing in August 2012, the strategy worked brilliantly, outperforming the market every year and returning 135%, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
Carnival Corp (NYSE:CCL) is the largest equity investment of Edinburgh Partners, which owns 2.23 million shares valued at $111.39 million, the position trimmed by 2% during the second quarter. The shares of the cruise vacation company have actually bucked the Edinburgh trend, having grown by 15.19% year-to-date and offered returns of 3.24% in the second quarter. Carnival Corp had an excellent second quarter, with reported GAAP net income of $222 million against its net income of $98 million from a year ago. Its quarterly revenue was in line with the prior year period at $3.6 billion. The shares of Carnival Corp (NYSE:CCL) have received an average analyst rating of ‘Buy’ from 22 analysts. The carnival company received approval for setting limited sales to Cuba from the U.S. government starting in May 2016. Carnival Corp plans to use its social-impact brand, Fathom, for the visits, and these tours differ from traditional tour offerings in terms of their emphasis over cultural exchange and immersion. Kerr Neilson’s Platinum Asset Management was the largest shareholder of Carnival Corp (NYSE:CCL) among the funds we track as of March 31, with a holding valued at $453.62 million from ownership of 9.48 million shares.
Follow Sandy Nairn's Edinburgh Partners
Edinburgh Partners reduced its investment in its second-largest equity holding, Microsoft Corporation (NASDAQ:MSFT), by 3% during the second quarter, with the investment manager holding 2.50 million shares valued at $111.18 million at the end of the period. During the second quarter, the shares of the tech giant witnessed growth of 8.6%. The Windows operating system company is focusing towards creating a Windows ecosystem while pulling itself out from other endeavors. The CEO of Microsoft Corporation, Satya Nadella, sent an email to his employees recently indicating more job cuts in the near future, with the expected figure being 7,800 and the majority of these job cuts target the phone division of the company. Along with these job cuts, the company will bear impairment charges of $7.6 billion in addition to a restructuring charge of $750 million to $850 million associated with the acquisition of Nokia’s device and service division. The shares of Microsoft Corporation (NASDAQ:MSFT) are down by 1.79% year-to-date despite their strong second quarter. Jeffrey Ubben of ValueAct Capital was among the primary investors of the technology company, with an investment of $3.06 billion consisting of 75.27 million shares as of March 31.
PerkinElmer, Inc. (NYSE:PKI) is the top new stock pick of Mr. Nairn, who owned 1.76 million shares of the company, with a market value of $91.86 million at the end of the second quarter. The shares of the environmental and human health company are up by 15.74% in 2015 and gained 2.93% in the quarter ending June 30. PerkinElmer reported excellent first quarter financial results, with earnings per share of $0.50 against consensus estimates of $0.46 from ten analysts. Its revenue was lower than the expected revenue of $537 million however, as the company announced net revenue of $526.9 million. PerkinElmer, Inc. (NYSE:PKI) is expecting earnings per share of $2.54 to $2.60 for the current fiscal year. Chuck Royce’s Royce & Associates held a large position in the company of 2.74 million shares valued at $140.13 million on March 31.
Disclosure: None
