GDS Investments Shares Bullish Theses on FMC, GM, Mosaic, More

GDS Investments, a premier investment management firm headed by Glenn D. Surowiec, recently released a letter in which the firm talked about various stocks such as FMC Corp (NYSE:FMC), General Motors Company (NYSE:GM), Mosaic Co (NYSE:MOS), BP plc (ADR) (NYSE:BP), and Abbott Laboratories (NYSE:ABT).

Given that GDS’ client portfolios have averaged 14.41% annualized returns since inception (in 2008), we took a closer look at the letter and cover the relevant excerpts concerning the five companies below:

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As it pertains to FMC Corp (NYSE:FMC), GDS Investments likes the stock and believes the company ‘enjoys additional leverage to cyclical improvement in crop nutrients suppliers, a decrease in the company’s reliance on the corn and soybean markets, and opportunities within the more attractive “niche” coffee, cotton, and rice markets’. In addition, the fund likes how FMC Corp has a sizable and growing business selling to the pharmaceutical and food industries. Needless to say, the firm feels that FMC Corp (NYSE:FMC) is materially undervalued. Of the 742 elite funds that Insider Monkey tracks, many also feel the same way. According to our data, 31 elite funds had a bullish position in FMC Corp (NYSE:FMC) at the end of December, up 3 funds from the previous quarter.

In relation to General Motors Company (NYSE:GM), GDS Investments notes that the icon has a solid financial profile — with $20 billion in cash, $10 billion in free cash flow per year, and a large multi-billion dollar buy back program. In addition, GM has $50 billion in NOL’s and a well-covered dividend. Given that strong profile, GM is a ‘stalwart’ in client-advised portfolios. GDS isn’t the only firm that likes General Motors Company (NYSE:GM). According to 13F filings, Warren Buffett’s Berkshire Hathaway owned 50 million shares at the end of December.

On the next page, we examine GDS Investments’ comments on Mosaic Co, BP plc (ADR), and Abbott Laboratories.

Another favorite for GDS Investments is Mosaic Co (NYSE:MOS). The firm notes that demand for potash crop nutrient is accelerating and supply rationalizing is underway, with 6 to 7 million tons of potash capacity leaving the market over the last two years. With that being the case, GDS feels that ‘the Mosaic Company is now spring-loaded for enhanced profitability when demand for phosphate and potash crop nutrient improves’. 16 top funds had a bullish position in Mosaic Co (NYSE:MOS) at the end of the fourth quarter, down 8 funds from the previous quarter.

When it comes to the energy patch, GDS Investments prefers more global integrated companies such as BP plc (ADR) (NYSE:BP) as opposed to strict E&P’s. GDS notes that “energy tends to outperform in an environment of rising interest rates, as evidenced by its massive outperformance in the 1970’s”, and that many parts of the oil producing world face great political and security instability. 26 elite funds were long BP plc (ADR) (NYSE:BP) at the end of the fourth quarter, down 4 funds from the previous quarter.

Last but not least, GDS likes Abbott Laboratories (NYSE:ABT) CEO Miles White, who the firm notes ‘has consistently made very large purchases of the Abbott Laboratories’ stock’ and who was also instrumental in the company’s merger with St. Jude Medical. GDS believes the merger will make Abbot more competitive in the growing medical device sector. 54 elite funds were long Abbott Laboratories (NYSE:ABT) at the end of December, up 2 funds from the previous quarter.

Disclosure:None