In a recent 13G filing, David Blood and Al Gore’s Generation Investment Management disclosed holding 12.35 million shares of Linear Technology Corporation (NASDAQ:LLTC), accounting for 5.15% of the company’s outstanding common stock. Subsequently, this is an increase of nearly 2.78 million shares from the fund’s previous stake revealed in the 13F filing for the April-June quarter.
Generation Investment Management (GIM) is a London-based investment management firm established by David Blood and Al Gore in 2004, whose investment style resembles the one of a traditional equity research firm, but puts a stronger emphasis on sustainability factors such as social and environmental responsibility and corporate governance. GIM reckons that sustainability and opportunities directly affect the long-term business profitability and prospects of companies, which is the reason why the firm tends to invest only in those companies that are socially and environmentally responsible. As stated by the firm’s most recent 13F filing with the SEC, GIM oversees an equity portfolio worth $7.46 billion as of the end of June.
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Linear Technology Corporation (NASDAQ:LLTC) is a technology company that designs, manufactures, and markets a line of analog integrated circuits worldwide. It had a rough summer, as its stock lost 15% in the last three months and have dropped by 13% year-to-date, which outlines the company’s poor performance. Reportedly, the worsening global macroeconomic conditions have impacted the stock’s performance over the last few months. Aside from GIM, First Eagle Investment Management and Jim Simons’ Renaissance Technologies are among the largest shareholders of the technology company within our database, holding stakes of 12.18 million shares and 8.09 million shares, respectively.
More than a month ago, Jeffries lowered the price target on Linear Technology Corporation (NASDAQ:LLTC) to $46 from $52, while reiterating “Buy” rating. The lower price target was a result of the deteriorating business conditions, which led customers to lower forecasts and push out orders. In July, Drexel Hamilton also downgraded the stock to “Hold” from “Buy” and reduced the price target to $45 from $60. These downgrades surely did not surprise anyone, given that Linear Technology Corporation acknowledged itself that the global macroeconomic conditions had put downward pressure on its operations and financial results. Nevertheless, Citigroup’s semiconductor analyst believes that now is the right time to buy semiconductor stocks, suggesting that the current situation resembles the 2011-2012 industry downturns. The analyst reckons that the risk/reward is very favorable at the moment for the industry stocks. Of course, the recent broader market correction can push the shares of Linear Technology even lower, but the stock might still represent a great buying opportunity for a long-term period.
A little while ago, Linear Technology Corporation (NASDAQ:LLTC) reported its financial results for the fiscal fourth quarter of 2015, ended June 28. The company posted revenues of $379.5 million, compared to $365.4 million a year ago, while its net income advanced by $3.0 million on the year to $132.7 million. It’s also worth noting that Linear Technology is expecting a very difficult first quarter of the current fiscal year, which will most likely result in quarter-over-quarter revenue slump of 7% – 12%. Nevertheless, the current situation in the industry is believed to be transitory, as customers react to global uncertainties and adjust inventories to potential lower customer demand. The company’s performance is set to rebound should the worries about the global economic growth disappear, so investors should not cross out this stock from their watchlists.
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