First Eagle Investment Management’s Top Stock Picks This Quarter; Oracle Corp Leads the Pack

First Eagle Investment Management LLC, currently overseen by President and Chief Executive Officer Mehdi Mahmud, is an independent asset management firm that oversees roughly $94 billion in assets under management as of March 31. The 152-year-old company focuses on fundamental, flexible and benchmark-agnostic investing, as well as employs strategies that offer downside protection for investors. The New York-based asset manager had an equity portfolio worth $39.34 billion at the end of the March quarter, down from the $40.00 billion figure registered at the end of the final quarter of 2015. First Eagle Investment Management strongly values its legacy as a patient, thoughtful, long-term investor; therefore, retail investors could benefit from having a look at the firm’s top equity positions and major moves made each quarter. Thus, this article will lay out and discuss the five largest equity positions within First Eagle’s equity portfolio as of the end of March.

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#5. Omnicom Group Inc. (NYSE:OMC)

– Number of shares held by First Eagle as of March 31: 12.72 Million

– Value of First Eagle’s holding as of March 31: $1.06 Billion

First Eagle upped its position in Omnicom Group Inc. (NYSE:OMC) by 119,010 shares during the March quarter, ending the first three-month period of 2016 with 12.72 million shares valued at $1.06 billion. The New York-based asset manager initiated a position in the provider of advertising, marketing and corporate communications services during the fourth quarter of 2008; an investment that has returned 224% since the end of 2008. Omnicom shares aren’t doing too badly this year either as they are nearly 11% in the green year-to-date. Earlier this month, Omnicom Health Group, a healthcare marketing and communications group that is part of Omnicom Group, sealed an agreement to acquire BioPharm Communications. The target operates as a communications agency specialized in proprietary, multichannel marketing programs for pharmaceutical and biotechnology clients, serving 17 of the 25 largest pharmaceutical companies across the globe. Richard S. Pzena’s Pzena Investment Management owns 4.66 million shares of Omnicom Group Inc. (NYSE:OMC) as of March 31.

#4. Weyerhaeuser Co (NYSE:WY)

– Number of shares held by First Eagle as of March 31: 36.10 Million

– Value of First Eagle’s holding as of March 31: $1.12 Billion

The New York-based asset management firm has significantly increased its exposure to Weyerhaeuser Co (NYSE:WY), as it boosted the stake in the company by a whopping 20.84 million shares during the first quarter to 36.10 million. First Eagle might have decided to boost its stake in the timberlands-focused REIT following the sharp drop in its share price since early January through mid-February. Weyerhaeuser shares are up 43% from their 52-week low of $22.06 reached in February and are 5% in the green year-to-date. In early May, Weyerhaeuser inked a deal to sell its Cellulose Fiber pulp mills to International Paper for $2.2 billion in cash. The deal involves five pulp mills and two modified fiber mills that produce pulp used to make various products such as diapers and tissues. The $2.2 billion deal, which is subject to regulatory approval, is anticipated to close during the final quarter of this year. Charles Paquelet’s Skylands Capital acquired a new stake of 74,340 shares of Weyerhaeuser Co (NYSE:WY) during the March quarter.

#3. Microsoft Corporation (NASDAQ:MSFT)

– Number of shares held by First Eagle as of March 31: 23.62 Million

– Value of First Eagle’s holding as of March 31: $1.30 Billion

First Eagle Investment Management trimmed its position in Microsoft Corporation (NASDAQ:MSFT) by a massive 6.40 million shares during the January-to-March quarter to 23.62 million shares. Microsoft, once the largest equity position in First Eagle’s equity portfolio, was the third-largest equity holding in the firm’s portfolio at the end of March with a value of $1.30 billion. The $94 billion-asset manager initiated a position in the software maker during the second quarter of 2006, which makes us believe that First Eagle is taking some profits off the table given the ten-year return (excluding dividends) of 116%. Earlier this month, the giant software company announced the acquisition of an Italian start-up, called Solair, as part of its strategy to expand the reach and credibility of its Microsoft Azure computing platform. The five-year-old company specializes in delivering Internet of Things services that connect devices in workplace settings to customers in various industries. For instance, the company’s services enabled an Italian manufacturer to remotely monitor espresso machines, which helped the user boost revenue and reduce costs. Ken Fisher’s Fisher Asset Management reported ownership of 18.22 million shares of Microsoft Corporation (NASDAQ:MSFT) through the latest round of 13Fs.

#2. Comcast Corporation (NASDAQ:CMCSA)

– Number of shares held by First Eagle as of March 31: 25.83 Million

– Value of First Eagle’s holding as of March 31: $1.56 Billion

The multi-billion-dollar asset manager increased its stake in Comcast Corporation (NASDAQ:CMCSA) by 1.78 million shares during the first quarter of this year to 25.83 million shares, which were valued at $1.56 billion at the end of March. At the end of April, Comcast Corporation agreed to acquire Dreamworks Animation Skg Inc. (NASDAQ:DWA) at a price of $41 in cash for each share of DreamWorks. The soon-to-be completed acquisition is set to expand the reach of Comcast’s NBCUniveral by leveraging the kids and family entertainment space of DreamWorks Animation. The deal is also expected to deliver cost synergies through overhead reductions, as well as lower costs associated with film distribution channels. Shares of Comcast are up 8% since the beginning of 2016 and currently change hands at a forward PE multiple of 15.7, versus the forward PE ratio of 18.0 for the Nasdaq 100 Index. Donald Yacktman’s Yacktman Asset Management owns 2.20 million shares of Comcast Corporation (NASDAQ:CMCSA) as of the end of the March quarter.

#1. Oracle Corporation (NYSE:ORCL)

– Number of shares held by First Eagle as of March 31: 39.80 Million

– Value of First Eagle’s holding as of March 31: $1.63 Billion

First Eagle owned 39.80 million shares of Oracle Corporation (NYSE:ORCL) on March 31, representing an increase of 403,425 shares quarter-on-quarter. The $1.63 billion-position constituted 4.14% of the asset manager’s equity portfolio at the end of March. Just recently, Oracle announced that it had agreed to acquire utilities cloud-services provider Opower Inc. (NYSE:OPWR), which would create the largest provider of cloud services to utilities. Under the terms of the agreement, Opower shareholders will receive $10.30 in cash per share, which values the target at approximately $532 million. Oracle’s revenue from cloud software reached $1.52 billion for the nine months that ended February 29, which marked an increase of 42% year-on-year. The Opower acquisition seems to play a key role in Oracle’s strategy to expand its cloud-computing business. Oracle shares are 7% in the green year-to-date, but are down 10% in the past 12 months. Pzena Investment Management had 10.41 million shares of Oracle Corporation (NYSE:ORCL) in its equity portfolio at the end of March.

Disclosure: None